BSBPMG517A MANAGE PROJECT RISK PRESENTATION 1

PRESENTATION OBJECTIVES

At the end of this presentation you will know about:

• Determining risk objectives and standards, with input from

stakeholders

RISK MANAGEMENT

Once the project team understands the project success measures and

priorities, attention is turned to understanding the project risk. All

projects have some risk, and the more unique a project is, the more

sources of risk may be present.

A risk is anything that may impact the project team’s ability to

achieve the general project success measures and the specific

project stakeholder priorities.

The objective for risk management planning is to have a process of

deciding how to approach, plan and execute risk management

activities for a project. By documenting risk information in a

proactive manner, a project manager can eliminate or reduce the

impact of some threats and capitalize on some opportunities.

RISK ATTITUDE

Determining the risk objectives and the standards that will be met is

a process that is best achieved in consultation with the project

stakeholders. Organisations and stakeholders will accept risk to

varying degrees depending on their risk attitude. The risk attitude will

depend on a number of factors which include:

• The degree of risk an entity is willing to accept to achieve their

objective

• The organisations ability to work with “uncertainty”

• The organisational tolerance level, that is the spectrum of risk that

an organisation is willing to tolerate.

RISK OBJECTIVES AND STANDARDS

• Risk management is far reaching and crosses many disciplines

• In project management, the determination process

includes:

Identifying

Assessing

Managing risks

• Each project may have “unique” risks and the methods or

strategies by which you manage them. In most cases, risk is either

required to be monitored or is governed by specific compliance

and industry standards

POSITIVE AND NEGATIVE RISKS

Project risk is an uncertain event or condition that, if it occurs, has a

positive or negative effect on one or more project objectives such as

scope, schedule, cost and quality. A risk may have more than one

cause and, if it occurs, it may have one or more impacts.

The impact of a risk can be negative, which is something that poses a

threat, or a condition or situation unfavourable to the project.

On the other hand the impact could be positive, in which something

poses an opportunity, or a condition or situation favourable to the

project

RISK MANAGEMENT

Management of project risk will include the following six risk areas:

• Plan risk management

• Identify risks

• Perform qualitative risk analysis

• Perform quantitative risk analysis

• Plan risk responses

• Control risks

RISK STANDARDS

Standards that may be used to benchmark your risk

management can include:

Australian and international standards

Enterprise and industrial agreements

Industry codes of practice

Industry standards

Organisational and industrial agreements

Organisational policies, systems and procedures

Regulations and legislation

INTERNATIONAL STANDARDS ORGANISATION

International Standards Organisation Project Committee (ISO/TC258) Project

Management, has been operational since 2007, and has developed ISO 21500:

Guide to Project Management, published in 2012. The committee oversees the

development of all project management related standards and is currently

considering a number of topics including project portfolio management, and

project programme and portfolio management terminology. The next standard

to be created by ISO TC 258 is ISO 21502 Project Portfolio Management which

will be released in 2015.

The standards are reviewed frequently and new standards introduced. For

example, there are a number of new standards currently in development.

Working Groups have been set up for the following standards.

• WG1 - Project Portfolio Management

• WG2 - Project Governance

• WG3 - Project Terminology

THE PMBOK®1 - BY THE PROJECT MANAGEMENT INSTITUTE

The PMBOK®1 (Project Management Body of

Knowledge) is a world standard in Project

Management, developed by the internationally

recognised Project Management Institute (PMI), and

which establishes best practices and principles for

project management.

NCSPM - BY THE AUSTRALIAN INSTITUTE OF PROJECT MANAGEMENT

The NCSPM (National Competency Standards in

Project Management) is the primary Australian

reference for project managers, developed by the

Australian Institute of Project Management (AIPM).

AS ISO 10006 (2003) - STANDARDS AUSTRALIA

Guidelines for quality management in projects. AS

ISO 10006 by Standards Australia defines guidelines

for quality management in projects in Australia and

is aligned with international quality standards. They

are a new set of standards replacing AS3905, and

PSA Project's methodology is also in accordance

with them.

MANDATORY INDUSTRY CODES OF PRACTICE

Mandatory industry codes of practice provide practical guidance and

advice on how to achieve the standard required by legislation. Codes

of practice are developed through consultation with representatives

from industry, workers and employers, special interest groups and

government agencies. A code of practice is not law, but a business

would be wise to follow the code of practice to achieve the same

standards as other competitors.

An example of a mandatory industry code is The Franchising Code

of Conduct, this is regulated by ACCC and applies to the parties of a

franchise agreement.

VOLUNTARY INDUSTRY CODES OF PRACTICE

These codes of practice are not enforceable under any Act or

Regulation, similar to voluntary standards discussed above, the codes

of practice exist to encourage consumer confidence. They allow

industries to self-regulate and promote ethical practice. Some

examples are:

• Model code of practice - Managing the Risks of Plant in the

workplace http

://www.safeworkaustralia.gov.au/sites/swa/about/publications/pages/managing-the-risks-of-plant-in-the-workplace

• Model code of practice - Managing Risks of Hazardous Chemicals

in the workplace http

://www.safeworkaustralia.gov.au/sites/swa/about/publications/pages/managing-risks-of-hazardous-chemicals-in-the-workplace

PRESENTATION SUMMARY

Now that you have completed this presentation you know about:

• Determining risk objectives and standards, with input from

stakeholders