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Lecture 5

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Lecture 5

Uploaded by

kaungmyat.th
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Project

Management
Creating the Project Risk Plan

Dr. Tianyi Wu 2024-11-25


• Defining Project Risks
• The Six-Step Process

CONTENTS
• Establishing Reserves
• Managing Multiproject Risks
• Useful Tools in Risk Management
• Conclusion
01

Defining Project Risks


What is Risks Management

• A systematic process to identify, analyze, and respond to project risks.

• Handling risks casually or without planning invites failure or even disaster.

• Enables proactive responses to potential issues.

• Helps address problems before they arise.

• More expensive and time-consuming.

• Adds discipline and efficiency to risk management efforts.


Defining Project Risks

• Discussion: What could be potential project risks?


Defining Project Risks

• Discussion: What could be potential project risks?

Lost key member Bad weather Technical failure


Defining Project Risks

• Typical Trap: Wait too long to assess risk factors and delay the risk plan
Defining Project Risks

• Typical Trap: Wait too long to assess risk factors and delay the risk plan
Defining Project Risks

• Meaning: The process of

conducting risk management

planning, identification,

analysis, response planning,

and monitoring and control

on a project.
02

The Six-Step Process


The Six-Step Process
The Six-Step Process

• Step 1: Make a List

1. Brainstorming for Risk Identification

2. Avoiding Solo Efforts:

3. Utilizing Team Expertise

4. Incorporating Informal Collaboration

5. Engaging Departmental Support

6. Holistic Approach
The Six-Step Process

• Steps 2 & 3: Determine the Probability of

Risk Occurrence and Negative Impact

These two steps allow you to

prioritize all identified threats to the project

and help you determine how much time,

effort, staff, and money should be devoted

to preventing or mitigating each.


The Six-Step Process

Steps 2 & 3: Determine the Probability of Risk Occurrence and Negative Impact
The Six-Step Process

Steps 2 & 3: Determine the Probability of Risk Occurrence and Negative Impact
The Six-Step Process

• Step 4: Prevent or Mitigate the Risk

Some risks can be prevented (bad

weather, forget to contact with key person);

others can only be mitigated (Earthquake,

key person’s retirement).


The Six-Step Process

• Step 5: Consider Contingencies

Preventive measures are those

steps taken before the risk becomes reality.

Contingencies represent the specific actions

that will be taken if the risk occurs. Here, you

answer the question “If the risk becomes

reality, what will we do”?


The Six-Step Process

• Step 6: Establish the Trigger Point

Preventive measures are those

steps taken before the risk becomes reality.

Contingencies represent the specific actions

that will be taken if the risk occurs. Here, you

answer the question “If the risk becomes

reality, what will we do”?


The Six-Step Process

B C
03

Establishing Reserves
Establishing Reserves

The most comprehensive


risk plan can be compromised if
you realize that you do not have
the time or means to take
appropriate action. Establishing
reserves enables you to leverage the
plan to its fullest potential. The best-
laid plans are impotent without the
time and/or budget to allow for
effective implementation. As a result,
you need to establish contingency
and management reserves.
Establishing Reserves

Management reserves are

designated amounts of time and/or

budget included in your plan to

account for risks to the project that

cannot be predicted.
04
Managing Multiproject
Risks
Managing Multi-project Risks

• First, you must focus on the individual


project and the associated risks for each.
• Then, you must assess your entire
portfolio and determine the nature of the
relationship of these projects.
Managing Multi-project Risks
A program typically involves
multiple projects working toward the
completion of a single deliverable. These
projects must all be properly integrated
toward this end. In the portfolio environment,
you must identify where the projects
coincide or overlap with regard to any
project work. You then determine what might
go wrong in these areas where the projects
“touch.”
Coordination Points

In multi-project management, the areas where projects overlap


or connect are called coordination points. These are critical to identify
because they’re where potential risks can arise. Once you’ve pinpointed
these points, you can create a standard multi-project risk plan.
The key here is to focus specifically on the coordination points
when applying the Six-Step process. First, you should create a risk plan
for each project individually to handle the risks within that project. Then,
shift your attention to the coordination points and follow the same
process to manage the risks between projects.
05
Useful Tools in Risk
Management
Useful Tools in Risk Management

1. Risk Matrix

2. Risk Register
Useful Tools in Risk Management
Useful Tools in Risk Management
06
Conclusion
Conclusion
1. Key Takeaways
• Risk management is essential for project success, enabling
proactive responses and minimizing negative impacts.
• A systematic approach, like the Six-Step process, provides
structure and efficiency in identifying and addressing risks.
2. Critical Insights
• Avoid delays in risk planning; start early to build a solid
foundation.
• Collaboration across the team ensures comprehensive risk
identification.
Conclusion
3. Tools and Techniques
• Leverage tools such as risk matrices and registers to prioritize
and monitor risks effectively.
4. Final Thoughts
• Effective risk management enhances project outcomes and
strengthens coordination in multi-project environments.
• Remember, proactive planning always outweighs reactive
responses.
THE END

THANKS

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