Reference no: EM133372730 , Length: 8 pages
Fundamentals of Project Management
Project Case Study-Part: Planning for Risks
Planning for risks include the following:
• Planning risk management
• Identifying risks
• Analysing risks
• Qualitative Analysis
• Quantitative Analysis
• Planning how to respond to each risk
Planning Risk Management
This planning activity results in the development of the Risk Management Plan. A risk project. The general topics that a risk management plan should address include:
• the methodology for risk management,
• roles and responsibilities,
• budget and schedule estimates for risk-related activities,
• risk categories,
• probability and impact matrices, and
• risk documentation
Identifying Risks
This planning activity results in the development of the Risk Register. A risk register is a document that contains the results of various risk management processes and is often displayed in a table or spreadsheet format.
• Refer to Course Textbook-Figure 6-17: Sample Risk Register
Analysing Risks
This involves a two-step approach:
1. Performing Qualitative Risk Analysis: Involves prioritizing identified risks based on their probability (P) and impact (I) and determining which ones require further action and response. Prioritized risks lay the foundation for the analysis phase, quantitative risk analysis
2. Performing Quantitative Risk Analysis: For each risk that requires further analysis, this involves taking measurements and calculating hard members for P, and I, and the leads into the Expected Monetary Value (EMV) Analysis. Based on the EMV, the risks are reprioritized, and the risk register is updated, and risks are moved to the next stage, Plan Risk Responses.
Plan Risk Responses
This involves figuring out what to do if risks happen. For each risk one of the following strategies are chosen:
• Responses for Negative Risks
o Risk avoidance
o Risk acceptance
o Risk transference
o Risk mitigation
• Responses for Positive Risks
o Risk exploitation
o Risk sharing
o Risk enhancement
o Risk acceptance
Your Team's Deliverables
• Develop the Risk Register for your project using the template provided.
• Minimum 12 risks.
• Be creative in identifying these risks. Make sure that they are relevant and realistic. For example, if budget overruns is a risk, why is that? What has taken place in the project that makes you believe that budget overruns will be a risk?
• Develop the Probability and Impact Matrix.
Probability: Probability is the likelihood that an event will occur. The classic example is flipping a coin. There is a .50 probability of getting heads and a .50 probability of getting tails on the flip.
Impact: Impact is the amount of pain (or the amount of gain) the risk event poses to the project i.e. expected value of the risk event. Remember that impact is measured in terms of "time" and "dollars".
Scales: Determine the scales you are going to use for probability and impact. You can use a relative scale such as high-medium-low, and assign a numerical scale (known as a cardinal scale) to it. See Ch 6 textbook and lecture slides.
Risk Profile: Determine the boundaries that you are going to use to decide what risks you are going to include in the "watch list" and what risks you require quantitative risk assessment.
Now, you are ready to start discussing the risks you have included in the Risk Registry, obtain consensus on the probability and impact and plot the risks into the Probability and Impact Matrix. This plot will provide the qualitative overall risk profile for your project. See Module 6: Planning Projects Part 3: Quality, Resource, Communications, Risk, Procurement, and Stakeholder Management.
The final strep in this process is to update the Risk Register with the results of the qualitative risk assessment. You can include additional columns to capture your qualitative risk assessment.