Bost university
Faculty of computer
science
Week#2
Course code:cs713 semester: 7th
Lecturer : Faizullah Ehsas
This week lectures topics
The Risk Management Process in Project
Management
What Is Risk Management on Projects?
How to Manage Risk?
What Is Positive Risk?
What Is Positive Risk?
The Risk Management Process in
Project Management
When you start the planning process for a project,
one of the first things you need to think about is:
what can go wrong?
It sounds negative, but pragmatic project managers
know this type of thinking is preventative.
Issues will inevitably come up, and you need a
mitigation strategy in place to know how to manage
risks when project planning.
What Is Risk Management on
Projects?
Project risk management is the process of
identifying, analyzing and responding to any risk
that arises over the life cycle of a project to help
the project remain on track and meet its goal.
Risk management isn’t reactive only; it should be
part of the planning process to figure out the risk
that might happen in the project and how to
control that risk if it in fact occurs.
How to Manage Risk
To begin managing risk, it’s crucial to start with a
clear and precise definition of what your project has
been tasked to deliver.
In other words, write a very detailed project charter
, with your project vision, objectives, scope and
deliverables.
This way risks can be identified at every stage of
the project.
Then you’ll want to engage your team early in
identifying any and all risks.
How to Manage Risk
Don’t be afraid to get more than just your team involved
to identify and prioritize risks, too.
Many project managers simply email their project team and
ask to send them things they think might go wrong on the
project.
But to better plot project risk, you should get the entire
project team, your client’s representatives, and vendors into
a room together and do a risk identification session.
How to Manage Risk
With every risk you define, you’ll want to log it
somewhere—using a risk tracking template helps
you prioritize the level of risk.
Then, create a risk management plan to capture
the negative and positive impacts of the project
and what actions you will take to deal with them.
You’ll want to set up regular meetings to monitor
risk while your project is ongoing.
What Is Positive Risk?
Not all risk is created equally.
Risk can be either positive or negative, though
most people assume risks are inherently the
latter.
Where negative risk implies something unwanted
that has the potential to irreparably damage a
project, positive risks are opportunities that can
affect the project in beneficial ways.
What Is Positive Risk?
Negative risks are part of your risk management
plan, just as positive risks should be, but the
difference is in approach.
You manage and account for known negative risks
to neuter their impact, but positive risks can also
be managed to take full advantage of them.
What Is Positive Risk?
There are many examples of positive risks in
projects:
you could complete the project early;
you could acquire more customers than you
accounted for;
you could imagine how a delay in shipping might
open up a potential window for better marketing
opportunities, etc.
Positive risk can quickly turn to negative risk and
vice versa, so you must be sure to plan for all
eventualities with your team.
How to Respond to Positive Risk
Like everything else on a project, you’re going to
want to strategize and have the mechanisms in
place to reap the rewards that may be seeded in
positive risk.
Use these three tips to guide your way:
How to Respond to Positive Risk
1. The first thing you’ll want to know is if the risk is
something you can exploit.
That means figuring out ways to increase the
likelihood of that risk occurring.
How to Respond to Positive Risk
2. Next, you may want to share the risk.
Sometimes you alone are not equipped to take
full advantage of the risk, and by involving others
you increase the opportunity of yielding the most
positive outcome from the risk.
How to Respond to Positive Risk
3. Finally, there may be nothing to do at all, and
that’s exactly what you should do. Nothing.
You can apply this to negative risk as well, for not
doing something is sometimes the best thing you
can do when confronted with a specific risk in the
context of your project.
Managing Risk throughout
the Organization
So, how do you handle something as seemingly
elusive as project risk management?
You make a risk management plan. It’s all about
the process.
Turn disadvantages into an advantage by
following these six steps.
1 Identify the Risk
You can’t resolve a risk if you don’t know what it
is. There are many ways to identify risk. As you do
go through this step, you’ll want to collect the
data in a risk register.
One way is brainstorming with your team,
colleagues or stakeholders.
1 Identify the Risk
Find the individuals with relevant experience and
set up interviews so you can gather the
information you’ll need to both identify and
resolve the risks.
Think of the many things that can go wrong. Note
them.
Do the same with historical data on past projects.
Now your list of potential risk has grown.
1 Identify the Risk
Make sure the risks are rooted in the cause of a
problem.
Basically, drill down to the root cause to see if the
risk is one that will have the kind of impact on
your project that needs identifying.
1 Identify the Risk
When trying to minimize risk, it’s good to trust
your intuition.
This can point you to unlikely scenarios that you
just assume couldn’t happen.
Use a risk breakdown structure process to weed
out risks from non-risks.
2 Analyze the Risk
Analyzing risk is hard.
There is never enough information you can
gather.
Of course, a lot of that data is complex, but most
industries have best practices, which can help you
with your risk analysis.
You might be surprised to discover that your
company already has a framework for this
process.
2 Analyze the Risk
When you assess project risk you can ultimately
and proactively address many impacts, such as
avoiding potential litigation, addressing regulatory
issues, complying with new legislation, reducing
your exposure and minimizing impact
3 Prioritize Risks & Issues
Not all risks are created equally.
You need to evaluate the risk to know what
resources you’re going to assemble towards
resolving it when and if it occurs.
3 Prioritize Risks & Issues
Having a large list of risks can be daunting.
But you can manage this by simply categorizing
risks as high, medium or low.
Now there’s a horizon line and you can see the
risk in context.
3 Prioritize Risks & Issues
With this perspective, you can begin to plan for
how and when you’ll address these risks.
Then, if risks become issues, it’s advisable to
keep an issue log so you can keep track of each of
them and implement corrective actions
3 Prioritize Risks & Issues
Some risks are going to require immediate
attention.
These are the risks that can derail your project.
Failure isn’t an option.
3 Prioritize Risks & Issues
Other risks are important, but perhaps do not
threaten the success of your project.
You can act accordingly.
Then there are those risks that have little to no
impact on the overall project’s schedule and
budget.
Some of these low-priority risks might be
important, but not enough to waste time on.
4 Assign an Owner to the Risk
All your hard work identifying and evaluating risk
is for naught if you don’t assign someone to
oversee the risk.
In fact, this is something that you should do when
listing the risks.
Who is the person who is responsible for that risk,
identifying it when and if it should occur and then
leading the work towards resolving it?
4 Assign an Owner to the Risk
That determination is up to you.
There might be a team member who is more
skilled or experienced in the risk.
Then that person should lead the charge to
resolve it. Or it might just be an arbitrary choice.
Of course, it’s better to assign the task to the
right person, but equally important in making sure
that every risk has a person responsible for it.
4 Assign an Owner to the Risk
Think about it. If you don’t give each risk a person
tasked with watching out for it, and then dealing
with resolving it when and if it should arise, you’re
opening yourself up to more risk.
It’s one thing to identify risk, but if you don’t
manage it then you’re not protecting the project.
5 Respond to the Risk
All that planning you’ve done is going to be put to
use.
First you need to know if this is a positive or
negative risk.
Is it something you could exploit for the
betterment of the project? If not you need to
deploy a risk mitigation strategy.
5 Respond to the Risk
A risk mitigation strategy is simply a
contingency plan to minimize the impact of a
project risk.
You then act on the risk by how you prioritized it.
You have communications with the risk owner
and, together, decide on which of the plans you
created to implement to resolve the risk.
6 Monitor the Risk
You can’t just set forces against risk without
tracking the progress of that initiative.
That’s where the monitoring comes in. Whoever
owns the risk will be responsible for tracking its
progress towards resolution.
6 Monitor the Risk
But you will need to stay updated to have an
accurate picture of the project’s overall progress
to identify and monitor new risks.
You’ll want to set up a series of meetings to
manage the risks.
Make sure you’ve already decided on the means
of communication to do this.
It’s best to have various channels dedicated to
communication.
6 Monitor the Risk
Whatever you choose to do, remember: always be
transparent.
It’s best if everyone in the project knows what is
going on, so they know what to be on the lookout
for and help manage the process.
6 Monitor the Risk
Whatever you choose to do, remember: always be
transparent.
It’s best if everyone in the project knows what is
going on, so they know what to be on the lookout
for and help manage the process.
Risk Management Templates
We’ve created dozens of free
project management templates for Excel and
Word to help you manage projects. Here are some
of our risk management templates to help you as
you go through the process of identifying,
analyzing, prioritizing and responding to risks.
Risk Management Templates
Risk Management Plan Template
Risk Register Template
Risk Matrix Template
Risk Management Plan Tem
plate
A risk management plan is a document that
describes the potential risks that might affect a
project, how those risks will be mitigated and the
various risk management guidelines and
procedures that will be followed by a project
team.
Risk management plans compile other risk
management documents such as a risk register,
risk breakdown structure and a risk response plan.
Risk Register Template
A risk register is a risk management document
that allows project managers to identify and keep
track of potential project risks.
Using a risk register to list down project risks is
one of the first steps in the risk management
process and one of the most important because it
sets the stage for future risk management
activities.
Risk Matrix Template
A risk matrix is a project management tool that
allows project managers to analyze the likelihood
and potential impact of project risks.
This helps them prioritize project risks and build a
risk mitigation plan to respond to those risks if
they were to occur.
Managing Risk with Project Manager
Using a risk tracking template is a start, but to
gain even more control over your project risks
you’ll want to use project management software.
ProjectManager has a number of tools including
risk management that let you address risks at
every phase of a project.
Thank you
