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Project Risk Assessment by Derek Hendrikz

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Project management risk assessment by Derek Hendrikz works with probability, impact, mitigation, contingency ratios as well as risk remedies and quantification techniques.

Project Risk Assessment by Derek Hendrikz

  1. 1. Project Risk Assessment derek hendrikz www.derekhendrikz.com
  2. 2. Copyright © 2014 Derek Hendrikz Consulting www.derekhendrikz.com
  3. 3. Risk… www.derekhendrikz.com
  4. 4. …the absence of certainty in a future or current event defines the risk of such event… www.derekhendrikz.com
  5. 5. Level of Risk = Level of Uncertainty
  6. 6. Project Risk… www.derekhendrikz.com
  7. 7. An event or situation which can endanger all or part of the project. www.derekhendrikz.com
  8. 8. Risks can be both internal – arising from within the project – and external – arising from the context or environment of the project.
  9. 9. ▪ It definitely will happen. ▪ It probably won’t happen. ▪ It doesn’t matter anyway. ▪ Disaster if it happens. www.derekhendrikz.com
  10. 10. Disaster Doesn’t matter Probably won’t happen Definitely will happen 1 2 3 4 5 1 2 3 4 5 Impact Event Probability www.derekhendrikz.com
  11. 11. Probability Impact www.derekhendrikz.com
  12. 12. Contingency Plan Mitigation Plan Probability Impact www.derekhendrikz.com
  13. 13.  What can we do to mitigate (lessen the harshness) the risk in terms of frequency and severity...  Mitigation plans are mostly part of a risk management initiative. www.derekhendrikz.com
  14. 14.  What can we do to manage an unplanned event or occurrence when it happens or how we can deal with it once it has happened...  Contingency plans are mostly part of a disaster management initiative. www.derekhendrikz.com
  15. 15. Mitigation Contingency www.derekhendrikz.com
  16. 16. The Risk Management Process: Step 1: Risk Identification Analyse the project to identify sources of risk Step 2: Risk Assessment Assess risk in terms of:  Severity of impact  Likelihood of occurring  Controllability Step 4: Risk Response Control  Implement risk strategy  Monitor and adjust plan for new risks  Change management Step 3: Risk Response Development  Develop a strategy to reduce possible damage  Develop contingency plans Known Risks Quantified Risk Managed Risk New Risks New Risks New Risks www.derekhendrikz.com
  17. 17. Understand Quantify Manage www.derekhendrikz.com
  18. 18. Level 1Triggers =We are warned before the event!!! Level 2Triggers =We are warned during the event!! Level 3 Triggers =We are warned after the event! www.derekhendrikz.com
  19. 19. Take the RISK or Don’t take the Risk!!! www.derekhendrikz.com
  20. 20. Risk Management Take the Risk Retain Mitigate Don’t take the Risk Transfer Avoid www.derekhendrikz.com
  21. 21. Failure Mode and Effects Analysis FMEA Impact x Probability x Detection = Risk Value www.derekhendrikz.com
  22. 22.  Risk = Probability x Impact (scale of the threat).  Reduction = Mitigation x Contingency (ability to manage the threat).  Exposure = Risk – Reduction (the amount of risk that you simply cannot avoid). www.derekhendrikz.com