Risk management profesional presentation
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Transcript of Risk management profesional presentation
I N T R O D U C E D B Y
PROF. KARIM EL-DASHP H D ; P M P ; R M P ; C C E ; A V S
RISK MANAGEMENT PROFESSIONAL PMI-RMP®
06/10 - 10/10 /2012
1
Prof. Karim El-Dash www.projacs.com
PMP Eligibility /Requirements
Educational Background
Project Risk Management Experience
Project Risk Management Education
High school diploma, associate’s degree or global equivalent
4,500 hours experience within the last five years
40 contact hours of formal education
Bachelor’s degree or global equivalent
3,000 hours experience within the last five years
30 contact hours of formal education
06/10 -10/10 /20122
Prof. Karim El-Dash www.projacs.com
PMP Eligibility /Requirements
Exam 170 questions
Time 3.5 hours
Fees CBT USD 520/ 670
Fees PBT USD 415/ 565
06/10 -10/10 /20123
Prof. Karim El-Dash www.projacs.com
Human Resources
Risk
Project Management
Cost
Time Quality
Procurement Communication
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Definition of a Project5
Any work that:
1. Has a temporary endeavor with a beginning and an end.
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Start Process Finish
Definition of a Project6
2. Creates a unique product , service or result.
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
What Is Project Management?7
Project Management
is the application of
knowledge, skills,
tools, and techniques
to project activities to
meet project
requirements.
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Projects & Products
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
8
Role of a Project Manager9
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Enterprise Environmental Factors10
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Organizational Process Assets11
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
OPA
Manuals
Procedures
Templates
Guidelines
Policies
Lessons Learned
Historical Info
Project Life Cycle12
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Cost & staffing levels across PLC
06/10 - 10/10 /2012
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Prof. Karim El-Dash www.projacs.com
Time
Start the project
Organizing & preparing
Carrying out work Closing the project
Project Charter
Project Management Plan
Accepted deliverables
Archived project documents
Impact of variables based on project time14
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
cost
Influence / risk
Time
Project Governance Across the Life Cycle15
Project governance provides a comprehensive, consistent method of controlling the project
It should be described in the project plan
It must fit within the context of the program or performing organization
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Stakeholders16
A stakeholders are persons and
organizations that are actively
involved in the project, or whose
interests may be affected as a result
of project performance or project
completion.
+ve & -ve stakeholders
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
17 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Functional Organization18
CEO
Technical Manager
Ahmad
Maram
Abdullah
Contract Manager
Aly
Marwa
Abdulaziz
Finance Manager
Adam
Manal
Abdussalam
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Projectized Organization19
CEO
PM Jamal
Ahmad
Maram
Abdullah
PMJone
Aly
Marwa
Abdulaziz
PMJoda
Adam
Manal
Abdussalam
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Project Management Process Groups20
1. Initiating
2. Planning
3. Executing
4. Monitoring & controlling
5. Closing
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Process Groups Interact in a Phase or Project21
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Time
Initiating Planning Executing Monitoring & Controlling
Closing
Project Management Process Group Triangle22
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Executingprocesses
Closing processes
Planning processes
Initiating processes
Monitoring & controlling processes
Executingprocesses
Closing processes
Planning processes
Initiating processes
Monitoring & controlling processes
Executingprocesses
Closing processes
Planning processes
Initiating processes
Monitoring & controlling processes
Executingprocesses
Closing processes
Planning processes
Initiating processes
Monitoring & controlling processes
Phase 1 Phase 2 Phase 3 Phase 4
Project Life Cycle
Executingprocesses
Closing processes
Planning processes
Initiating processes
Monitoring & controlling processes
Project Charter23
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
1. Project authorization
2. PM authorization
Project Scope Statement
Includes: Product scope description.
Product acceptance criteria.
Project deliverables.
Project exclusions
Project constraints
Project assumptions.
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Sample WBS
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Prof. Karim El-Dash www.projacs.com
Decomposition - 100% Rule26
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WBS vs. OBS27
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Schedule Management Plan
Approach
Milestone
Critical activities
Responsibilities
Prioritization
Analyzing
Documentation
Change process
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Is a form of progressive
elaboration planning.
Work to be accomplished in the
near term is planned in detail at a
low level of the WBS
Work far in the future is planned
for WBS components that are at a
relatively high level of the WBS.
Rolling Wave Planning29
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Dependencies
Mandatory dependency inherent in the nature of the work being done / contractually required (hard logic)
Discretionarydependency determined by project team (soft logic)
External
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Cost Management Plan
Level of accuracy
Units of measure
Organizational procedures links (ex. control account, CA)
Control thresholds
Rules of performance measurement (EVM)
Reporting formats
Process descriptions
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Estimate Activity Resources
Activity resource requirements Resource breakdown structure (RBS) Project documents update: Activity list
Activity attributes
Resource calendar
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Estimate Activity Duration
Tools Expert judgment:
Analogous estimating
Parametric estimating
3-point estimate
Reserve analysis
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Estimate Activity Duration
Tools Expert judgment
Analogous estimating: also called top-down estimating, means using the actual duration of a previous, similar activity as the basis for estimating the duration of a future activity based on specific parameters like duration, budget, size, weight
Parametric estimating 3-point estimate Reserve analysis
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Estimate Activity Duration
Tools Expert judgment Analogous estimating
Parametric estimatinguses statistical relationship between historical data and other variables to estimate for activities, such as multiplying quantity of work by productivity rate 3-point estimate Reserve analysis
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Estimate Activity Duration
Tools Expert judgment Analogous estimating Parametric estimating 3-point estimateOptimistic, most likely, pessimistic
and
64 pMo
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6op tt
t
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
PERT37
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Estimate Cost
• Activity Cost Estimates• Bases of estimates how it was developed assumptions constraints range of possible estimates
(±15%, 8-10) Confidence level
• Project document updates
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Schedule Compression
1- Crashing
2- Fast tracking
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Crashing40
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Fast Tracking41
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Variable & Fixed Costs
Variable Costs that change with the amount of production.
Fixed Costs that do not change as production changes.
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Direct and Indirect Cost
Indirect costs are the necessary costs of doing business that
cannot be related to a particular activity and in some cases
cannot be related to a specific project.
general overhead
project overhead.
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Quality Management Plan
Quality implementation
Quality assurance
Quality control
Continuous improvement
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Project Quality Management
Precision is consistency that the value of repeated measurements are clustered and have little scatterAccuracy iscorrectness that the measured value is very close to the true value
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Plan Quality
Cost-Benefit Analysis less rework
higher productivity
lower costs
increased satisfaction
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Cost of Quality (COQ)
Quality costs are:
Conformance =
prevention + appraisal
Non-conformance =
internal + external
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Force Field Analysis48
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Communication49
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Communication Management Plan
Stakeholder requirements
Information, format, content, and level of detail
Reasons
Time frame
Responsible person
Who will receive the information
Technologies used
Escalation process
Updating communications management plan
Constraints
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Project Communication Plan (sample)51
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What Who/Target Purpose When/Frequency Type/Method(s)
Initiation Meeting
All stakeholders*
Gather information for Initiation Plan
FIRST Before Project Start Date
Meeting
Distribute Project Initiation Plan
All stakeholders*
Distribute Plan to alert stakeholders of project scope and to gain buy in.
Before Kick Off MeetingBefore Project Start Date
Document distributed via hardcopy or electronically. May be posted on project website or OIT Blackboard site.
Project Kick Off
All stakeholders*
Communicate plans and stakeholder roles/responsibilities.
At or near Project Start Date
Meeting
Status Reports
All stakeholders and Project Office
Update stakeholders on progress of the project.
Regularly Scheduled.
Distribute electronically and post via web/OIT Blackboard site.
Prof. Karim El-Dash www.projacs.com
Communication Skills52
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Power / Interest Grid for Stakeholder Prioritization
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53
Key Players (Manage Closely)
Important Players (Keep Satisfied)
Affected Players (Keep Informed)
Other Players (Monitor)
HighLow
High
Low
Interest
Power
Prof. Karim El-Dash www.projacs.com
Communication Technology
Urgency of the need for
information
Availability of technology
Expected project staffing
Duration of the project
Project environment
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Communication Methods55
1. Interactive communication; meeting2. Push communication; letter3. Pull communication; e-learning
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Execution & ControlProcesses
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Work Performance Information57
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Distribute Information
Sender-receiver model
Choice of media
Writing styles
Meeting management
techniques
Presentation techniques
Facilitation techniques
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Performance Report
Analysis of past performance
Current status of risks and issues
Work completed
Work to be completed
Summary of changes
Results of variance analysis
Forecast project completion
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Report Performance (T&T)
Variance analysis
Forecasting methods
Communication
methods
Reporting systems
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Cost Performance Baseline
It is an authorized time-phased budget at completion (BAC) that is used as a basis against which to measure, monitor, and control overall cost performance on the project.
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Cost Baseline62
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Performance Measurement
Cost Variance (CV)CV = EV – AC
Cost Performance Index (CPI)CPI = EV / AC
Schedule Variance (SV)SV = EV – PV
Schedule Performance Index (SPI)SPI = EV / PV
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Earned Value
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Earned Value
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Earned Value Analysis66
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Forecast Estimate
1. EAC = AC + ETC
2. EAC = AC + BAC – EV
ETC = (BAC-EV)
3. EAC = (AC + (BAC – EV)/CPI)
ETC = (BAC-EV) / CPI
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
To-Complete Performance Index (TCPI)68
ACBACEVBACTCPI
ACEACEVBACTCPI
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Perform Quality Assurance
Is the process of auditing
the quality requirements
and the results from quality
control measurements to
ensure appropriate quality
standards and operational
definitions are used
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Perform Quality Assurance
Quality audit
Is a structured, independent review to determine
whether project activities comply with
organizational and project policies, processes, and
procedures
70
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Develop Project Team71
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
HR Management Information System72
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Team Development
Observation and Conversation
Project Performance Appraisals
Formal or informal
360 degree
Conflict Management
Withdrawing / smoothing / compromising / forcing / collaborating / confronting
Issue Log
Interpersonal skills
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Team Performance Assessment74
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Behaviors/Process Measures Results Measures
Individual Level:An employee’scontribution to theteam
Whether or how well the employee: cooperates with team members, communicates ideas during meetings, participates in the team’s decision-making processes.
The quality of the written report, the turnaround time for the individual’s product, the accuracy of the advice supplied to the team, the status of the employee’s case backlog.
Team Level:The team’sperformance
Whether or how well the team: runs effective meetings, communicates well as a group; allows all opinions to be heard, comes to consensus on decisions.
The customer satisfaction rate with the team’s product, the percent decline of the case backlog, the cycle time for the team’s entire work process.
Prof. Karim El-Dash www.projacs.com
Decision Making
Problem definition
Problem solutions
generation
Evaluation criteria
Solution action planning
Solution evaluation
planning
Evaluation of outcome
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
76
PROJECT RISK MANAGEMENT
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Project Risk Management
Planning,
identification,
analysis (qualitative + quantitative),
responses, and
monitoring and control on a project
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Project Risk Management
Objectives are to:
increase the probability and impact of
positive events, and
decrease the probability and impact of
events adverse to the project
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Project Risk
Project risk is an uncertain event or condition that, if it occurs, has an effect on a project objective.
Objective : Scope / time / cost / quality
A risk has a cause or more and, if it occurs, an impact or more.
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Known & Unknown
Known risks are those that
have been identified and
analyzed
Unknown risks cannot be
managed, may be addressed by
contingency plan
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Project Risk Management Processes81
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Plan Risk Management11-1
1. Project scope statement2. Cost management plan3. Schedule management plan4. Communications
management plan5. Enterprise environmental
factors6. Organizational process
assets
Inputs
1. Planning meetings & analysis
Tools & Techniques
1. Risk management plan
Outputs
06/10 - 10/10 /201282Prof. Karim El-Dash www.projacs.com
Plan Risk Management (T&T)
Planning Meetings & Analysis
Project manager
Selected team members and stakeholders
Anyone with responsibility to manage the risk
planning and execution activities
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Management Plan
Methodology
Roles and responsibilities
Budgeting
Timing
Categories
Probability & Impact A relative scale “very unlikely” to “almost certainty” could be
used. Numerical probabilities on a general scale (e.g., 0.1, 0.3, 0.5,
0.7, 0.9)
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Risk Responsibility ChartTop
managementPM
Management Team
Risk Owner
Plan Risk Management X X X
Identify Risk X X
Perform Qualitative Risk Management X X X
Perform Qualitative Risk Management X X X
Plan Risk Responses X X X
Monitor & Control Risks X X X
Prof. Karim El-Dash www.projacs.com
Risk Breakdown Structure (RBS)
Project
OrganizationalProjectManagement
Technical External Others
Time
Cost
Resource
Quality
Performance
Complexity
Objectives
Fund
Collaboration
Weather
Labor
Politics
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Likelihood Expectations87
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Level Likelihood Expected or actual frequency experienced
1 Rare May only occur in exceptional circumstances; simple process; noprevious incidence of non-compliance
2 Unlikely Could occur at some time; less than 25% chance of occurring; noncomplex process &/or existence of checks and balances
3 PossibleMight occur at some time; 25 –50% chance of occurring; previousaudits/reports indicate non-compliance; complex process with extensivechecks & balances; impacting factors outside control of organization
4 LikelyWill probably occur in most circumstances; 50-75% chance ofoccurring; complex process with some checks & balances; impactingfactors outside control of organization
5 Almost certainCan be expected to occur in most circumstances; more than 75%chance of occurring; complex process with minimal checks & balances;impacting factors outside control of organization
Prof. Karim El-Dash www.projacs.com
Impact Scale88
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Relative or numerical scales
Objective Very low / 0.05
Low / 0.10Moderate /
0.20High / 0.40
Very High / 0.80
Cost Insignificant increase
<10% increase
10-20% increase
20-40% increase>40%
increase
Time Insignificant increase
<5% increase5-10%
increase10-20% increase
>20% increase
ScopeBarely noticed change
Minor changeMajor
changeUnacceptable by
sponsor
Product is
useless
Quality Barely noticed
Applications affected
Sponsor approval required
Unacceptable by sponsor
Product is
uselessProf. Karim El-Dash www.projacs.com
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Stakeholder Tolerance Matrix
Stakeholder RequirementsTolerances
Time Cost Quality
PM Deliver product as requested
More than 10% Phase
II
More than 5% Phase II
Conformance to all specs
Technical Manager
Passing all QC criteria
More than 20% Phase
II
More than 10% Phase
II
Conformance to all
limitations
Marketing Manager Verify profits
More than 5% Phase
II
More than 2% Phase
II
Customer acceptance
IT ManagerCustomer
satisfaction (internal & external)
More than 20% Phase
II
More than 5% Phase II
Positive feedback
Prof. Karim El-Dash www.projacs.com
Risk Matrix90
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Consequences
Likelihood Insignificant Minor Moderate Major Extreme
Rare Low Low Low Low Low
Unlikely Low Low Low Medium Medium
Possible Low Low Medium Medium Medium
Likely Low Medium Medium High High
Almost certain Low Medium Medium High Extreme
Prof. Karim El-Dash www.projacs.com
Risk Management Plan
Stakeholder tolerance
Reporting format
Tracking
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Identify Risks11-2
1. Risk management plan2. Activity cost estimates3. Activity duration estimates4. Scope baseline5. Stakeholder register6. Cost management plan7. Schedule management plan8. Quality management plan9. Project documents10. Enterprise environmental
factors11. Organizational process
assets
Inputs
1. Documentation reviews2. Information gathering
techniques3. Checklist analysis4. Diagramming techniques5. SWOT analysis6. Expert judgment
Tools & Techniques
1. Risk register
Outputs
06/10 - 10/10 /201292Prof. Karim El-Dash www.projacs.com
Identify Risks (T&T)
1. Documentation reviews
2. Information-gathering techniques Brainstorming Delphi technique Interviewing Root cause identification
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Identify Risks (T&T)
3. Checklists
4. Assumptions analysis
5. Diagramming techniques Cause-and-effect diagrams Flow charts. Influence diagrams
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Cause and Effect Diagram
Fishbone Ishikawa
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Delay in Project
ManagementMaterialsFunding
ScopeProductivityLabor
Flowchart
Organization Assets
Project Planning
Auditing
Quality Control
Verification
Corrective Action
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Influence Diagram
Market demand
Product strategy
Product verification
Customer Satisfaction
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Identify Risks (T&T)
6. SWOT Analysis
7. Expert judgment
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PRO CON
Inte
rnal
Strength Weakness
Exte
rnal
Opportunity Threat
Prof. Karim El-Dash www.projacs.com
Identify Risks (output)
Risk register
Identified risks
Potential responses
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Risk Register100
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Task Cause Risk Effect
Design Conflict Errors + Rework Delay
Procurement Single supplier Inappropriate delivery Delay / cost increase
Handing out Permit not ready No access Delay
Executing Technical problems Rework Delay / Cost increase
Verification Nonconformance Corrective action Quality / Cost/ Time
Prof. Karim El-Dash www.projacs.com
Perform Qualitative Risk Management11-3
1. Risk register2. Risk management plan3. Project scope statement4. Organizational process
assets
Inputs
1. Risk probability & impact assessment
2. Probability & impact matrix3. Risk data quality assessment4. Risk categorization5. Risk urgency assessment6. Expert judgment
Tools & Techniques
1. Risk register update
Outputs
06/10 - 10/10 /2012101Prof. Karim El-Dash www.projacs.com
Perform Qualitative Risk Management (T&T)
Risk Probability and Impact Assessment
Probability and Impact Matrix
Data quality assessment
Risk categorization
Risk urgency
Expert judgment
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Probability – Impact Matrix
Impact
0.9 0.7 0.5 0.3 0.1Probability
0.9 0.81 0.63 0.45 0.27 0.09
0.7 0.63 0.49 0.35 0.21 0.07
0.5 0.45 0.35 0.25 0.15 0.05
0.3 0.27 0.21 0.15 0.09 0.03
0.1 0.09 0.07 0.05 0.03 0.01
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Probability – Impact Chart
High impact
High probability
Low probability
Low impact
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Critical Events105
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High urgency Low urgency
High severity
Low severity
Prof. Karim El-Dash www.projacs.com
Risk Severity106
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Perform Qualitative Risk Management (outputs)
Risk register updates Relative ranking
Risks categorized
Causes requiring particular attention
List of risks for additional analysis
Watch-lists of low-priority risks
Trends in qualitative risk analysis results
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Risk Register108
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Task Cause Risk Effect Probability Impact
Design ConflictErrors + Rework
Delay High High
Procurement Single supplierInappropriate
deliveryDelay / cost
increaseMedium Medium
Handing out Permit not ready No access Delay Medium High
Executing Technical problems
ReworkDelay / Cost
increaseLow Medium
Verification NonconformanceCorrective
actionQuality /
Cost/ TimeLow Medium
Prof. Karim El-Dash www.projacs.com
Perform Quantitative Risk Management
Numerically analyzes the effect of identified risk on
overall project objectives.
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Perform Quantitative Risk Management11-4
1. Risk register2. Risk management plan3. Cost management plan4. Schedule management plan5. Organizational process
assets
Inputs
1. Data gathering & representation techniques
2. Quantitative risk analysis & modeling techniques
3. Expert judgment
Tools & Techniques
1. Risk register update
Outputs
06/10 - 10/10 /2012110Prof. Karim El-Dash www.projacs.com
Perform Quantitative Risk Management (T&T)
Data gathering & representation technique
Interviewing
Probability distribution
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Three-Point Estimate
WBS Element Low Most Likely High
Design $2 $4 $7
Build $35 $45 $60
Verify $5 $7 $10
Total $42 $56 $77
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Probability Distribution
Probability
Time / Cost
Beta distribution
Optimistic Most likely
Pessimistic
Triangular distribution
Probability
Time / Cost
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Probability Distribution
Probability Likelihood of occurrence.
Statistics Mean – Average of the values of events Mode – Value which occurs most often Median – Value in middle of the range of ordered values
Variance Average of the squared deviations from the mean Standard deviation – Square Root of the Variance Range – Values between upper & lower limits
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Statistical Description
Sample: 5,7,3,6,7,8,4,7,2 (2,3,4,5,6,7,7,7,8)
Mean =
Mode = 7
Median = 6
Range = 6
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45.59
274876375
Prof. Karim El-Dash www.projacs.com
Normal Distribution CurveNormal Distribution Curve
2 standard deviations (+/- 1 ) = 68.26 % 4 standard deviations (+/- 2 ) = 95.46 % 6 standard deviations (+/- 3 ) = 99.73 %
0-1-2-3 +1 +2 +3
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Perform Quantitative Risk Management (T&T)
Quantitative risk analysis & Modeling Technique
Sensitivity Analysis
Expected Monetary Value
Decision Tree
Modeling & Simulation
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SENSITIVITY ANALYSISTornado Diagram
Inflation
Currency
Discount rate
Market demand
Conformance
-$2M -$1M $0M +$1M +$2M
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Prof. Karim El-Dash www.projacs.com
SENSITIVITY ANALYSIS
SPIDER DIAGRAMTotal cost of the project
Quality Skill
Logistics
Variation %
0%
(+)
(-) Time
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Expected Monetary Value
Ei is the expected payoff for strategy i,
Pi,j is the payoff element, and
pj is the probability of each state of nature occurring.
n
jjjii pPE
1,
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Expected Monetary Value
State of nature
Boom Moderate Recess Expected value
Strategy 0.20 0.50 0.30
S1 50 20 (40) 8
S2 40 10 (10) 10
S3 20 10 0 9
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Large Plant orSmall Plant
Small Plant($200,000)
Large Plant($500,000)
Recess+400,000
Boom+900,000
Recess+160,000
Boom+300,000
30%
70%
30%
70%
900k -500k = 400k
400k -500k = -100k
300k -200k = 100k
160k -200k = -40k
400*.3 -100*.7= 50k
100*.3 - 40*.7 = 2k
Decision Definition Decision Node Chance Node Net Path value
Decision Node
Chance Node
End of Branch
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SIMULATION
+ + =
A B C Sum
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
SIMULATION
+ + =
A B C Sum
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Total Cost Probability Distribution
06/10 - 10/10 /2012
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Prof. Karim El-Dash www.projacs.com
Perform Quantitative Risk Management (outputs)
Risk register updates:
Probabilistic analysis
Probability of achieving objectives
Prioritized list of quantified risks
Trends in quantitative risk analysis results
126
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Plan Risk Responses11-5
1. Risk register2. Risk management plan
Inputs
1. Strategies for negative risks or threats
2. Strategies for positive risks or opportunities
3. Contingent response strategies
4. Expert judgment
Tools & Techniques
1. Risk register update2. Risk-related contract
decisions3. Project management plan
updates4. Project document updates
Outputs
06/10 - 10/10 /2012127Prof. Karim El-Dash www.projacs.com
Plan Risk Responses (T&T)
Strategies for negative risks:
1. Avoid
2. Transfer
3. Mitigate
4. Accept
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Avoidance
Involves changing the project management plan to eliminate the threat entirely
Some risks that arise early in the project can be avoided by clarifying requirements, obtaining information, improving communication, or acquiring expertise
One form of avoidance is to shut down the project
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Transfer
Requires shifting the negative impact of a threat, along with ownership of the response, to a third party.
Cost-type contract transfer the cost risk to the buyer
Fixed-price contract transfer risk to the seller
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Mitigation
Implies a reduction in the probability and/or impact of an adverse risk event to an acceptable threshold
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Acceptance
Passive acceptance requires no action
Active acceptance strategy is to
establish a contingency reserve for
known (sometimes unknown) risks
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Strategies for Threats133
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
AvoidReduce
TransferAccept
Plan Risk Responses (T&T)
Strategies for positive risks:
1. Exploit
2. Share
3. Enhance
4. Accept
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Exploiting
Eliminate the uncertainty associated with a
particular upside risk by making the opportunity
definitely happen.
135
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Sharing
Involves allocating ownership to a third party who is
best able to capture the opportunity for the benefit of
the project
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Risk Enhancement
Modifies the “size” of an opportunity by:
1. Increasing probability and/or positive impacts
2. Identifying and maximizing key drivers of these positive-impact risks
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Strategies for Opportunities138
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ExploitEnhance
ShareAccept
Amount of Benefit
Occurrence Frequency
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Risk register( after planning risk responses)
Task Cause Risk Effect Probability Impact Trigger Response Allocation Owner Residual risk Secondary risk
Design
Procurement
Handing out
Executing
Verification
Prof. Karim El-Dash www.projacs.com
Risk-Related Contract DecisionsC
ontra
ctor
ince
ntiv
e
Firm Fixed Price (FFP)
Fixed Price Plus Incentive Fee (FPIF)
Fixed Price with Economic Price Adjustments (FP-EPA)
Cost Plus Fixed Fee (CPFF)
Cost Plus Incentive Fee (CPIF)
Customer influence
Cost Plus Award Fee (CPAF)
Time & Materials
Customer risk
Con
tract
or ri
sk
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Contingency141
06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Monitor & Control Risks11-6
1. Risk register2. Project management plan3. Work performance
information4. Performance reports
Inputs
1. Risk assessment2. Risk audits3. Variance & trend analysis 4. Technical performance
measurement5. Reserve analysis6. Status meetings
Tools & Techniques
1. Risk register update2. Organizational process
assets updates3. Change requests4. Project management plan
updates5. Project document updates
Outputs
06/10 - 10/10 /2012142Prof. Karim El-Dash www.projacs.com
Monitor & Control Risks (T&T)
Risk reassessment
Risk Audits
Variance & Trend Analysis
Technical Performance
Measurements
Reserve Analysis
Status Meetings
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06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
Common Construction Project Risk
1. Tight project schedule2. Design variations3. Excessive approval procedures in administrative government departments4. High performance/quality expectations5. Inadequate program scheduling6. Unsuitable construction program planning7. Variations of construction programs8. Low management competency of subcontractors9. Variations by the client10. Incomplete approval and other documents11. Incomplete or inaccurate cost estimate12. Lack of coordination between project participants13. Unavailability of sufficient professionals and managers14. Unavailability of sufficient amount of skilled labor15. Bureaucracy of government16. General safety accident occurrence17. Inadequate or insufficient site information (soil test and survey report)18. Occurrence of dispute19. Price inflation of construction materials20. Serious noise pollution caused by construction
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K A R I M E L - D A S H
K _ E L D A S H @ H O T M A I L . C O M
T E L : 9 6 5 - 9 9 3 1 0 2 6 1
F A X : 9 6 5 - 2 2 3 1 4 5 3 3
06/10 - 10/10 /2012
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THANKS
Prof. Karim El-Dash www.projacs.com