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RISK MANAGEMENT
A Short Course
Risk & Risk Management
• A risk is "an uncertain event or condition
that, if it occurs, has a positive or negative
effect ...
Project Risk
• An uncertain event or condition that if it
occurs has a positive or negative effect on
at least one project...
“Risk Speak”
• As a result of:
• a [DEFINITIVE CAUSE],
• an [UNCERTAIN EVENT (Risk)] may
occur,
• which would lead to [EFF...
Project Management Areas
Risk is Perception
Risk is often in the eye of the beholder and
is a personnel perception.
This is linked to the following...
Risk Spectrum
Neutral
Reasonable Behavoiur
Extreme Behaviour
Risk Taker Risk Averse
Increasing Potential
Profitability
Inc...
Risk Response and Comfort
ISO 31000/ ANZ Code
• Establish context
• Identify
• Analyse
• Evaluate
• Treat
• PLUS Monitor, Review & Communicate
YES
What can happen?
When & where?
How & why?
TREAT RISKS
COMMUNICATE&CONSULT
MONITOR&REVIEW
Internal Context
External Con...
Essential Questions
• WHAT
• WHY
• WHEN
• HOW
• WHERE
• WHO
I keep six wise serving men.
(They taught me all I knew).
Ther...
PMI Process Group
PLANNING
• Establishing the Context;
• Deciding ‘how’ to approach & conduct risk
management.
RISK PLANNING - WHAT
• Enterprise Environmental Factors – structure, culture,
resources, market conditions, PMIS
• Organis...
RISK PLANNING -WHY
• Identifies who has to do what and when
and at what cost (budget for risk required).
• Enables focused...
RISK PLANNING -WHEN
• Prior to commencement and ongoing as
part of monitoring & control.
• New situations or changes durin...
RISK PLANNING -HOW
• Approach to be adopted – new, existing
registers. Depends on size, complexity
‘newness’ of project an...
PLANNING -WHERE
• Location of initial meetings, internal and
external reviews.
• On or off site
• Consider Client and cont...
RISK PLANNING -WHO
• Participants required, stakeholders or
stakeholder needs.
• Based on knowledge, experience,
expertise...
RISK PLANNING - DELIVERABLES
• RISK MANAGEMENT PLAN
• RISK BREAKDOWN STRUCTURE (RBS).
• Definitions of probability (likeli...
Risk Management Plan (Contents)
• Introduction – project background and description; philosophy
• Risk Methodology (Tools ...
RISK IDENTIFICATION
Identification of risks affecting, or that may
affect the project, in a systematic manner.
Identificat...
RISK IDENTIFICATION - WHAT
• What can happen - the effect – the RISK.
Use of EFFECT & CONSEQUENCE to
define RISK rather th...
RISK IDENTIFICATION - WHY
• Enables ‘definitions’ to be established so
risks are described properly and not
repeated in di...
RISK IDENTIFICATION - WHEN
• During initial planning once the plan has
been formulated.
• Plus when risks can happen durin...
Sequential & Continuous
RISK IDENTIFICATION - HOW
Tools & Techniques based on:
• Information Gathering Techniques:
• Brainstorming
• Comprehensive...
RISK IDENTIFICATION - HOW
Checklist Analysis
Assumptions Analysis
Diagramming
• Cause & Effect
• Flow Charts
• Influence d...
TEMPLATE
RISK IDENTIFICATION - WHERE
• Off site, agenda and time / location,
workshop environment time bound
• Where will risk occu...
RISK IDENTIFICATION - WHO
• Project Manager,
• Stakeholders
• Subject MatterSpecialists, experts
• ‘Three Wise Men’
• Proj...
RISK IDENTIFICATION -
DELIVERABLES
• RISK REGISTER
• List of ID’d Risks
• Definitions
• Root Cause
• Risk categories
• Pot...
QUALITATIVE ANALYSIS
To develop an understanding and a
prioritisation of risks so that decisions may
be made regarding the...
Evaluation / Ranking
LIKELIHOOD CONSEQUENCE
Insignificant Minor Moderate Major Catastrophic
Almost Certain Significant Ris...
QUALITATIVE ANALYSIS - WHAT
• Determine the negative consequences of IDd
risks in the context of likelihood and probabilit...
QUALITATIVE ANALYSIS - WHY
• So informed decisions may be made.
• Initial screening of risks to identify ‘High
Risks’ and ...
QUALITATIVE ANALYSIS - WHEN
•At commencement of the Project
•As part of prioritising risk prior to
Quantitative Analysis.
...
QUALITATIVE ANALYSIS - HOW
• INFORMATION / RISK REGISTER
• ID TEAM TO ANALYSE RISKS
• ASSUMPTIONS RECORDED
• PROBABILITY /...
QUALITATIVE ANALYSIS - HOW
• Structured Interviews with Experts.
• Multi – disciplinary groups
• Questionnaires
• Models &...
QUALITATIVE ANALYSIS - WHERE
• Off site to create a working environment to
focus on risks.
• On site during specific focus...
QUALITATIVE ANALYSIS - WHO
• Project Manager
• Experts
• All involved disciplines and those involved
with interfaces etc.
...
QUALITATIVE ANALYSIS
• “I know my business” does not make the risks low;
Firms / individuals with a greater risk appetite ...
QUALITATIVE ANALYSIS –TREATMENT
QUANTITATIVE ANALYSIS
Numerical analysis of risk with probability
expressed as a number or percentage and
impact as a defi...
Quantitative Analysis
Cost Probability
Total cost Cumulative FrequencyLine Graph
-
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80...
QUANTITATIVE ANALYSIS -WHAT
• Decide upon which risks which require a
response.
• Risk Register indicates ‘high priority’ ...
QUANTITATIVE ANALYSIS - WHY
• Determining risk exposure in tangible and
business terms so that management time
and effort ...
QUANTITATIVE ANALYSIS - WHEN
• During planning phase following
qualitative.
QUANTITATIVE ANALYSIS - HOW
• Convert probability and impacts into numerical values.
Use of expert judgement, guesstimates...
QUANTITATIVE ANALYSIS - WHERE
• As required
• Specialist activity – off site
QUANTITATIVE ANALYSIS - WHO
• Expert input for input parameters and
review of outputs.
• Specialist software users.
QUANTITATIVE ANALYSIS
• Semi quantitative can be carried out if
cost/time not known exactly.
• Probability / Impact is bas...
RISK RESPONSE PLANNING -
• Determining strategy(s) and techniques for
dealing with risk.
• Evaluate estimated risk levels ...
RISK RESPONSE PLANNING - WHAT
• Prioritised risks ranking. Identification of risks
within Risk thresholds, Risk Owners and...
RISK RESPONSE PLANNING - WHY
• So that appropriate plans can be made in
advance and sufficient funds etc may be
made avail...
RISK RESPONSE PLANNING - WHEN
• Prior to awarding contracts.
• Prior to execution
• Prior to new activities
RISK RESPONSE PLANNING - HOW
• Four main methods are adopted depending on
risk rating:
• TERMINATE / AVOID - Activity is n...
RISK RESPONSE PLANNING - WHERE
• As required
RISK RESPONSE PLANNING - WHO
• Management
• Financial Controllers
• Insurance specialists
• Project Manager
• Construction...
RISK RESPONSE PLANNING
PMI Process Group
MONITORING & CONTROL
RISK MONITORING & CONTROL
Monitor the effectiveness of all steps of Risk
Management Process so that risks are
treated effe...
RISK MONITORING & CONTROL - WHAT
• Assess – Treat – Monitor - Assure
• Monitoring physical execution of a project,
identif...
RISK MONITORING & CONTROL - WHY
• Early identification of trends.
• Avoidance of risk
• Time implementation of a risk resp...
RISK MONITORING & CONTROL - WHEN
• Continuous to monthly to quarterly
depending on circumstances.
• At Project Phase Compl...
RISK MONITORING & CONTROL - HOW
• Monitoring and measurement of key metrics.
(Rates of progress, EVM – not just money but
...
RISK MONITORING & CONTROL - WHERE
• On site
• Off site
• Project Retreats
• Corporate reviews
RISK MONITORING & CONTROL – WHO
• Project Team
• Project Controls
• Project Manager
• PM Office
• CEO/CFO
RISK CLOSE OUT
PMI Process Group
Not Indicated
Closure of risk register and review of
effectiveness of Risk Management Pla...
RISK CLOSE OUT
• WHAT – Risks were realised and which
controls were effective
• WHY - Lessons learnt and knowledge
• WHEN ...
Value of Risk
• Return on Risk – 12.5 to 1
• Ounce of prevention is a one pound of
cure
• Stitch in time saves 9.
• (16 +9...
Risk Sayings:
• If it can go wrong…it will (Murphy’s Law)
• Ignoring a risk does not make it go away.
• You pay for your r...
More Sayings…
• Risks vs Issue – Risk – you can smell it, Issue –
your standing in it
• A little bit of risk management ca...
Conclusion
• Risk is a perception
• Risk can happen to everybody
• Risk management allows a sensible and
pragmatic approac...
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Risk management - A short course

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Short course - PMI. ISO31000, Kipling's Six Wise Men

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Risk management - A short course

  1. 1. RISK MANAGEMENT A Short Course
  2. 2. Risk & Risk Management • A risk is "an uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives." • Risk management includes for identification of risks, assessment of risks in terms of likelihood and consequences / impacts, and defining responses to issues.
  3. 3. Project Risk • An uncertain event or condition that if it occurs has a positive or negative effect on at least one project objective such as time, cost, scope, quality (safety). • Risks have a cause and an impact.
  4. 4. “Risk Speak” • As a result of: • a [DEFINITIVE CAUSE], • an [UNCERTAIN EVENT (Risk)] may occur, • which would lead to [EFFECT/IMPACT ON OBJECTIVES].
  5. 5. Project Management Areas
  6. 6. Risk is Perception Risk is often in the eye of the beholder and is a personnel perception. This is linked to the following: • Attitude (which drives) • Behaviour (which leads to) • Consequences and the risk ‘appetite’ of a firm/individual
  7. 7. Risk Spectrum Neutral Reasonable Behavoiur Extreme Behaviour Risk Taker Risk Averse Increasing Potential Profitability Increasing Potential Liability Fair' apportionment of risk
  8. 8. Risk Response and Comfort
  9. 9. ISO 31000/ ANZ Code • Establish context • Identify • Analyse • Evaluate • Treat • PLUS Monitor, Review & Communicate
  10. 10. YES What can happen? When & where? How & why? TREAT RISKS COMMUNICATE&CONSULT MONITOR&REVIEW Internal Context External Context Risk Management Context Develop Criteria Define Structure ESTABLISH THE CONTEXT IDENTIFY RISKS ANALYSE RISKS Compare against Criteria Set Pririties NO Identify existing controls Determine Consequences Determine Likelihood Determine Level of Risk EVALUATE RISKS Identify options Assess Options Prepare & Implement Plans Analyse / evaluate residual risk Treat Risks
  11. 11. Essential Questions • WHAT • WHY • WHEN • HOW • WHERE • WHO I keep six wise serving men. (They taught me all I knew). There names are What & Why & When, and How & Where & Who (Rudyard Kipling 1902)
  12. 12. PMI Process Group PLANNING • Establishing the Context; • Deciding ‘how’ to approach & conduct risk management.
  13. 13. RISK PLANNING - WHAT • Enterprise Environmental Factors – structure, culture, resources, market conditions, PMIS • Organisational Processes – Assets, Policies & Procedures. • Scope & any legal regulatory, physical, time, constraints. • Consider business needs for the project. • WHYIdentifies who has to what and when and at what cost (budget for risk required). Enables focused rational communication with others. Describes and approach to be made
  14. 14. RISK PLANNING -WHY • Identifies who has to do what and when and at what cost (budget for risk required). • Enables focused rational communication with others. • Describes risk management and approach to be made
  15. 15. RISK PLANNING -WHEN • Prior to commencement and ongoing as part of monitoring & control. • New situations or changes during project. • Risk plan for formal risk review/risk activities through project lifecycle.
  16. 16. RISK PLANNING -HOW • Approach to be adopted – new, existing registers. Depends on size, complexity ‘newness’ of project and project team. Tools and techniques to be used. • Definitions of probability and impact to be used in RM. • Communication and consultation with Stakeholders.
  17. 17. PLANNING -WHERE • Location of initial meetings, internal and external reviews. • On or off site • Consider Client and contractors who either input direct or through documents, joint workshops etc .depending on situation.
  18. 18. RISK PLANNING -WHO • Participants required, stakeholders or stakeholder needs. • Based on knowledge, experience, expertise, • Client and contractors to either input direct or through documents, joint workshops etc.
  19. 19. RISK PLANNING - DELIVERABLES • RISK MANAGEMENT PLAN • RISK BREAKDOWN STRUCTURE (RBS). • Definitions of probability (likelihood) and Impact (consequences). • Risk Context :Client / Contractor / Consultant etc, Internal / External • Risk categories : Technical, External, Organisational, Project Management (Estimates of Time / Cost), Legal/Contract, Reputation, Safety, Quality, Environmental as per RBS. • Organisation Risk Manual so set ‘policy’/ protocol/ organisation rules, roles & responsibilities.
  20. 20. Risk Management Plan (Contents) • Introduction – project background and description; philosophy • Risk Methodology (Tools & Techniques) • Roles & Responsibilities • Information & Communication protocols • Training required • Budget • Timing (Schedule) • Risk Categories – RBS • Definitions of probability & impact • Probability / Impact Matrix & High, Medium, Low definition • Tolerances with respect to risk categories and any predefined actions required. • Report Formats – registers, tracking, reports, change.
  21. 21. RISK IDENTIFICATION Identification of risks affecting, or that may affect the project, in a systematic manner. Identification of what, where, when, why and how events could prevent, delay or enhance the achievement of the objectives.
  22. 22. RISK IDENTIFICATION - WHAT • What can happen - the effect – the RISK. Use of EFFECT & CONSEQUENCE to define RISK rather than risk definition first. • Definition is important so that it is clear and not ambiguous.
  23. 23. RISK IDENTIFICATION - WHY • Enables ‘definitions’ to be established so risks are described properly and not repeated in different guises using different descriptors. • Beware that a rsik is confused with cause.
  24. 24. RISK IDENTIFICATION - WHEN • During initial planning once the plan has been formulated. • Plus when risks can happen during the project life cycle (project phases, construction, O&M, factory, delivery, handover etc).
  25. 25. Sequential & Continuous
  26. 26. RISK IDENTIFICATION - HOW Tools & Techniques based on: • Information Gathering Techniques: • Brainstorming • Comprehensive Listings • Delphi • Interview • Root Cause determination • SWOT • Historical records Checklists • Questionnaires • Pre Mortem • Affinity diagram • Nominal group Technique
  27. 27. RISK IDENTIFICATION - HOW Checklist Analysis Assumptions Analysis Diagramming • Cause & Effect • Flow Charts • Influence diagrams
  28. 28. TEMPLATE
  29. 29. RISK IDENTIFICATION - WHERE • Off site, agenda and time / location, workshop environment time bound • Where will risk occur (On site/offsite etc)
  30. 30. RISK IDENTIFICATION - WHO • Project Manager, • Stakeholders • Subject MatterSpecialists, experts • ‘Three Wise Men’ • Project Team • Historical Records - Advisors
  31. 31. RISK IDENTIFICATION - DELIVERABLES • RISK REGISTER • List of ID’d Risks • Definitions • Root Cause • Risk categories • Potential response (?)
  32. 32. QUALITATIVE ANALYSIS To develop an understanding and a prioritisation of risks so that decisions may be made regarding the acceptance of risks, or actions to be taken to mitigate such risks. ID and evaluate existing controls. Determine consequences & likelihood of risk plus range of potential consequences (sensitivity).
  33. 33. Evaluation / Ranking LIKELIHOOD CONSEQUENCE Insignificant Minor Moderate Major Catastrophic Almost Certain Significant Risk Significant Risk High Risk High Risk High Risk Likely Moderate Risk Significant Risk Significant Risk High Risk High Risk Moderate Low Risk Moderate Risk Significant Risk High Risk High Risk Unlikely Low Risk Low Risk Moderate Risk Significant Risk High Risk Rare Low Risk Low Risk Moderate Risk Significant Risk Significant Risk
  34. 34. QUALITATIVE ANALYSIS - WHAT • Determine the negative consequences of IDd risks in the context of likelihood and probability with respect to the Project and its Scope. • Use of past records, experience, research, prototypes, assumptions, ‘tailored’ scales and matrices of probability & impact. • Information and records are key – Market factors, industry norms and range, experience of others, public consultation, economics and economic trends, government legislation /planning, etc
  35. 35. QUALITATIVE ANALYSIS - WHY • So informed decisions may be made. • Initial screening of risks to identify ‘High Risks’ and allow management to focus on higher risks and allocate appropriate resource. • WHENAt commencement.Initial part of prioritising risk prior to qualitative Analysis.If there are no hard and fast data regarding time / cost.
  36. 36. QUALITATIVE ANALYSIS - WHEN •At commencement of the Project •As part of prioritising risk prior to Quantitative Analysis. •If there are no hard and fast data regarding time / cost thereby obviating any quantitative analysis.
  37. 37. QUALITATIVE ANALYSIS - HOW • INFORMATION / RISK REGISTER • ID TEAM TO ANALYSE RISKS • ASSUMPTIONS RECORDED • PROBABILITY / IMPACT SCALES • CARRY OUT ANALYSIS • DETERMINE RISKS AND CATEGORIES • DOCUMENT ANALYSIS • IDENTIFY ANY TRENDS • DECISIONS AND CATEGORISATION • INPUT TO QUANTITATIVE ANALYSIS
  38. 38. QUALITATIVE ANALYSIS - HOW • Structured Interviews with Experts. • Multi – disciplinary groups • Questionnaires • Models & Simulations • 3x3 and 5X5 or 10x10 matrices. • Thresholds, risk ranking / scoring
  39. 39. QUALITATIVE ANALYSIS - WHERE • Off site to create a working environment to focus on risks. • On site during specific focussed workshops
  40. 40. QUALITATIVE ANALYSIS - WHO • Project Manager • Experts • All involved disciplines and those involved with interfaces etc. • IDd Risk Owners / Managers • Team Members / Contributors • Facilitators.
  41. 41. QUALITATIVE ANALYSIS • “I know my business” does not make the risks low; Firms / individuals with a greater risk appetite still need to be aware of risk and at least take a pragmatic / realistic approach so appropriate reaction may be made in a timely manner. • It can’t happen to me. Bad things happen to others. • Pushing through bids to win work – site will sort it out – we have experienced people. • ID Impact / Severity and Probability / Likelihood rather than High, Medium, Low to move away from group think as to LOW (optimistic) or HIGH (pessimistic)
  42. 42. QUALITATIVE ANALYSIS –TREATMENT
  43. 43. QUANTITATIVE ANALYSIS Numerical analysis of risk with probability expressed as a number or percentage and impact as a definitive cost/delay A means of prioritising risks that have been categorised qualitatively.
  44. 44. Quantitative Analysis Cost Probability Total cost Cumulative FrequencyLine Graph - 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 405 410 415 420 425 430 435 440 445 Total cost (value) Probability Total cost frequency distribution - 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20 407.33 409.68 412.04 414.39 416.74 419.10 421.45 423.80 426.16 428.51 430.86 433.22 435.57 437.92 440.28 442.63 444.98 447.34 449.69 452.04 Total Cost (value) Probability
  45. 45. QUANTITATIVE ANALYSIS -WHAT • Decide upon which risks which require a response. • Risk Register indicates ‘high priority’ risks based on ranking. • Focus can be on commercial / business exposure and ranking projects on basis of risk. • OR schedule • OR performance
  46. 46. QUANTITATIVE ANALYSIS - WHY • Determining risk exposure in tangible and business terms so that management time and effort is focussed on areas of greatest risk (Business / Commercial) in order to decrease overall project risk.
  47. 47. QUANTITATIVE ANALYSIS - WHEN • During planning phase following qualitative.
  48. 48. QUANTITATIVE ANALYSIS - HOW • Convert probability and impacts into numerical values. Use of expert judgement, guesstimates (educated guesses) based on experience, historical data, industry data, corporate knowledge. • Tools include 1. Monte Carlo Analysis (Cost & Time) 2. Risk Management Software (Cost & Time) 3. Precedence Diagram (Time) • Also use interviews, sensitivity analyses, EMV and decision trees. • Tornado Diagram
  49. 49. QUANTITATIVE ANALYSIS - WHERE • As required • Specialist activity – off site
  50. 50. QUANTITATIVE ANALYSIS - WHO • Expert input for input parameters and review of outputs. • Specialist software users.
  51. 51. QUANTITATIVE ANALYSIS • Semi quantitative can be carried out if cost/time not known exactly. • Probability / Impact is based on time frequency ranges and impacts in terms of money/accident time etc. • Accident severity is linked to financial loss. • Monte Carlo simulations aid semi- quantitative analysis when ranges ID’d/guessed
  52. 52. RISK RESPONSE PLANNING - • Determining strategy(s) and techniques for dealing with risk. • Evaluate estimated risk levels against pre- established criteria and consider balance between potential benefit vs adverse outcome so decisions as to extent and nature of treatment required and priorities. • Plan for implementation of specific cost-effective strategy and action plans to increase benefit/reduce costs.
  53. 53. RISK RESPONSE PLANNING - WHAT • Prioritised risks ranking. Identification of risks within Risk thresholds, Risk Owners and allocation of management responsibility, financial authority. • Contingency plans, fallback positions. Secondary risks. • Creation of reserves (time, cost, resources (just in case) • Go / No Go decisions with respect to certain risks and action required.
  54. 54. RISK RESPONSE PLANNING - WHY • So that appropriate plans can be made in advance and sufficient funds etc may be made available to respond to risk. • Appropriate insurances or methodologies may be adopted to reduce risk exposure. • Selection of the appropriate choice to deal with risks.
  55. 55. RISK RESPONSE PLANNING - WHEN • Prior to awarding contracts. • Prior to execution • Prior to new activities
  56. 56. RISK RESPONSE PLANNING - HOW • Four main methods are adopted depending on risk rating: • TERMINATE / AVOID - Activity is not carried out. • TRANSFER / ALLOCATE - Insurance, warranty, guarantees • TREAT / MITIGATE - Choose a specialist supplier, build in redundancy, adopt a JV partner • TAKE / ACCEPT - As part of regular operations and dealt with through organisational capability or specific operating procedures
  57. 57. RISK RESPONSE PLANNING - WHERE • As required
  58. 58. RISK RESPONSE PLANNING - WHO • Management • Financial Controllers • Insurance specialists • Project Manager • Construction / Technical Specialists • Contract Specialists
  59. 59. RISK RESPONSE PLANNING
  60. 60. PMI Process Group MONITORING & CONTROL
  61. 61. RISK MONITORING & CONTROL Monitor the effectiveness of all steps of Risk Management Process so that risks are treated effectively. Any underestimates/overestimate of risk may be identified and appropriate changes to the plan implemented.
  62. 62. RISK MONITORING & CONTROL - WHAT • Assess – Treat – Monitor - Assure • Monitoring physical execution of a project, identification of any adverse trends. • ID of key metrics. “Cannot manage what you don’t measure”. • Trends – emerging issues and change ID • Reviews of risk handling
  63. 63. RISK MONITORING & CONTROL - WHY • Early identification of trends. • Avoidance of risk • Time implementation of a risk response plan prior to risk becoming an issue
  64. 64. RISK MONITORING & CONTROL - WHEN • Continuous to monthly to quarterly depending on circumstances. • At Project Phase Completion /Gateways • On commencement of new activities (utilising lessons learnt for repeat activities)
  65. 65. RISK MONITORING & CONTROL - HOW • Monitoring and measurement of key metrics. (Rates of progress, EVM – not just money but drawings/recruitment/materials placement etc, NCRs) • Definition of Trigger Levels, Thresholds, Variance, Delays, “Drop Dead Dates”, trends. • Audits – not blame and error but opportunity to correct and improve; correct errors before they become mistakes • AVOIDING NEGLECT AND SUBSEQUENT NEGLIGENCE
  66. 66. RISK MONITORING & CONTROL - WHERE • On site • Off site • Project Retreats • Corporate reviews
  67. 67. RISK MONITORING & CONTROL – WHO • Project Team • Project Controls • Project Manager • PM Office • CEO/CFO
  68. 68. RISK CLOSE OUT PMI Process Group Not Indicated Closure of risk register and review of effectiveness of Risk Management Plan, Risk ID and Risk Response Planning / Execution. Opportunity for lessons learnt being includd into corporate knowledge
  69. 69. RISK CLOSE OUT • WHAT – Risks were realised and which controls were effective • WHY - Lessons learnt and knowledge • WHEN -During execution, end of stages / partial completion • HOW - Records / Reports / Close out Report / Interviews • WHERE - On site, corporate HQ • WHO - Project Team / Facilitator
  70. 70. Value of Risk • Return on Risk – 12.5 to 1 • Ounce of prevention is a one pound of cure • Stitch in time saves 9. • (16 +9)/2 = 12.5
  71. 71. Risk Sayings: • If it can go wrong…it will (Murphy’s Law) • Ignoring a risk does not make it go away. • You pay for your risk management if you do it or not…unfortunately it may cost you more to cure than prevent. (An ounce of prevention is worth more than a pound of cure) • Risk is the mind of the beholder and all too often people believe their own hype - Optimism Bias
  72. 72. More Sayings… • Risks vs Issue – Risk – you can smell it, Issue – your standing in it • A little bit of risk management can prevent a lot of fan cleaning • Risk...isn’t that something that to happens to other people/projects/companies? • …but it’s on the Risk Register…but nobody was assigned to own/monitor/act • Risk clusters at interfaces, junctions, boundaries
  73. 73. Conclusion • Risk is a perception • Risk can happen to everybody • Risk management allows a sensible and pragmatic approach to be taken to executing projects • Risk management can help avoid project failure • Risk management can help promote project success.

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