MANAGE PROJECT RISKBSBPMG517A PRESENTATION 2

PRESENTATION OBJECTIVES

At the end of this presentation you will know about:

• Establishing project risk context to inform risk-management

processes

• Identifying project risks using valid and reliable risk-identification

methods

PROJECT RISK CONTEXT

In order to understand and manage risk you need to be clear about

the internal and external context in which your organisation operates.

This task can be set for an individual in your organisation that has

extensive organisational knowledge, or a committee can be formed.

To establish the organisational risk context you need to identify your

organisations:

• Aims

• Activities

• Structure

• Membership

• Methods of operation

SOME QUESTIONS THAT WILL GET THE PROCESS STARTED

• What are the aims and objectives of your organisation?

• What is your organisation’s core activity?

• Who is involved with your organisation - internally and externally?

• What facilities do you have and/or use?

• What is your organisation currently doing to manage risk, either

formally or informally?

• What type of insurances does your organisation have?

• What is the legal structure of your organisation?

PROJECT RISK CONTEXTWhen identifying the risk context you will also look at the environment in

which your organisation operates. What partnership relationships exist?

What laws, regulations, rules or standards apply to your organisation?

 You should also look at external trends:

• Technological changes

• Economic pressures

• Environmental issues

• Competition

• Government policies

• Social and cultural forces

• Ethical and legal obligations

 

RISK ORGANISATIONAL CONTEXT

Once you have a clear picture of the organisational context you can

identify the project risk context which looks specifically at:

• Legislation and regulation controls that are applicable to the project

• Nature of project

• Organisational risk policies and procedures

• Project environment

• Stakeholder expectations

Every project is different and therefore the context, in which you are

establishing your particular risk management process, will also differ.

This process requires some careful consideration of what exactly is the

risk assessment you are trying to achieve.

RISK IDENTIFICATION

Any project will present various risks which may be

financial risk, strategic risk, operational technical

risks and operational safety risk.

It is essential that you identify the risks associated

with the project. To identify risk you need to use a

reliable risk-identification method.

There are many methods of risk identification

techniques.

RISK IDENTIFICATION TECHNIQUES Brainstorming Group members verbally identify risks

that provide the opportunity to build on others ideas.

Surveys A list of questions are developed to seek out risk in a particular area.

Interviews Group interview can assist in identifying the baseline of risk on a project.

Working groups The working group is usually a separate group of people working a particular area within the project that is conducting the risk identification

Experiential knowledge

A collection of information that a person has obtained through their experience.

RISK IDENTIFICATION TECHNIQUES

Documented knowledge A collection of information or data that has been documented about a particular subject.

Risk lists/Checklist analysis

Lists of risks that have been found in similar municipalities or situations. Whilst a checklist maybe quick and simple, it is quite impossible to create an exhaustive list and some project managers may be tempted to use the checklist to avoid effort of a thorough risk identification. You should always explore additional, new risks.

Risk trigger questions List of situations or events in a particular area or municipality that can lead to risk identification. Trigger questions can be grouped as performance, cost, schedule, software etc.

RISK IDENTIFICATION TECHNIQUES

Lessons learned This is experiential knowledge that has been organised into information that may be relevant to the different areas within the organisation.

Outputs from risk-oriented analysis

There are various types of risk oriented analysis. Two such techniques are fault tree analysis and event tree analysis. These are top down approaches that attempt to determine what events, conditions, or faults could lead to a specific top level undesirable event.

Historical information This is basically the same as documented knowledge. The difference is that historical information is usually widely accepted as fact.

RISK IDENTIFICATION TECHNIQUESEngineering templates Are a set of flow charts for various

aspects of the development process. These templates are preliminary in nature and are intended as general guidance to accomplish a top down assessment of activities.

Expert judgement

 

To ensure a comprehensive risk management plan is established you should consider consultation with experts with specialised training or knowledge on the subject area, such as: Project managers who have worked

on similar projects Subject matter experts Industry groups and consultants Professional and technical

associations 

RISK IDENTIFICATION TECHNIQUESDelphi technique The Delphi technique is a way to reach a

consensus of experts. Project risk experts participate in this technique anonymously. A facilitator uses a questionnaire to solicit ideas about the important project risks. The responses are summarised and are then recirculated to the experts for further comment. Consensus may be reached in a few rounds of this process. The Delphi technique helps reduce bias in the data and keeps any one person from having undue influence on the outcome.

Root cause analysis Root cause analysis is a specific technique used to identify a problem, discover the underlying causes that lead to it, and develop preventative action. 

RISK IDENTIFICATION TECHNIQUESAssumptions Analysis Project plans are created and developed based

on a set of hypotheses, scenarios, and/or assumptions. Assumption analysis is the process by which each assumption is analysed for inaccuracy, instability or inconsistency, thereby identifying risks the project may be subjected to from invalid assumptions.

SWOT Analysis This technique examines the project from the perspective of its strengths, weaknesses, opportunities and threats (SWOT). The technique does not look at the project SWOT in isolation, rather it analyses the organisations SWOT position, as a whole. This analysis can improve the identification of risks; and also allows for some project risks to be offset against organisational strengths.

PRESENTATION SUMMARY

Now that your have completed this presentation you know about:

• Establishing project risk context to inform risk-management

processes

• Identifying project risks using valid and reliable risk-identification

methods