PMI-RMP
March 11, 2017 | Author: Khalid Awan | Category: N/A
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Introduction
Risk Management Professional (PMI RMP ®) Exam Preparation (PMI-RMP
Introduction for Risk Management g
“PMI-RMP” is a certification and trademark mark of the Project Management Institute, Inc. May 2011
www.pmhouse.org
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Welcome to PMI-RMP PMI RMP ® Exam Preparation Our Ground rules • Start on time to Finish on time • Mobile Phone Silent Please • Questions after Permition • RATHOLE TO CONCENTRATE • Presents 100 % to get your certificate
May 2011
www.pmhouse.org
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Introduction
Course Scope This course does
This s cou course se does not ot
Identify and define risk management characteristics Best practices in risk management Identify areas of information that will be Presented on the exam Explain risk management concepts as identified in The Standard for risk Management and PMBOK guide Organize g risk management g information as it is identified by the Project Management Institute (PMI®)
Teach general or basic project management concepts or tools Enable you to pass the (PMIRMP ®) exam without study and preparation
“PMI” is a service and trademark of the Project Management Institute, Inc.. May 2011
www.pmhouse.org
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Introduction
PMI-RMP PMI RMP Eligibility Requirements
Source - PMI-RMP Credential Handbook –August 2009 May 2011
www.pmhouse.org
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PMI-RMP PMI RMP Eligibility Requirements You can satisfy the project risk management educational requirements by demonstrating the successful completion of courses, workshops and training sessions offered by one or more of the following types of education providers: A. B. C. D D. E. F.
PMI Registered i d Education d i Providers id (R.E.P.s) ( ) PMI Component organizations Employer/company-sponsored programs Training companies or consultants Distance-learning companies, including an end-of-course assessment University/college academic and continuing education programs
Source - PMI-RMP Credential Handbook –August 2009 May 2011
www.pmhouse.org
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Introduction
Exam Steps , Exam Covers , and Scoring • Step 1: Take Preparation exam • Step 2: Submit your application • Step 3: Take and pass the PMI-RMP ® exam after your application has been approved The exam consists of 170 questions in 3.5 hours based on the following domains: • Risk Communication 27% • Risk Analysis 30% • Risk Response Planning 26% • Risk Governance 17% Exam fees $520 for PMI member and $670 for non member
May 2011
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Introduction
Please Introduce your self
What is your name What is your Role in the organization Why do you attend this course? What is your expectations ?
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Who am I? My name is Akram Alnajjar Certified PMI-RMP Risk Management Professional by PMI / USA Certified PgMP Program Management Professional by PMI / USA Certified PMP Project Management Professional by PMI / USA Certified PSP Planning and Schedule Professional by AACEI (The Association for The Advance Cost Engineer international) /USA Postgraduate Diploma for Construction Management from Ain Shams university BSC , Civil Engineering 1984 – Ain Shams University Cairo - Egypt PM consultant and Shareholder for ITI and owner of PM-Information House Currently working as lecturer for Arab Academy , ITI, PMI Gulf Chapters and ESI international Previously worked as : Projects Control Manager for Eni Group /AGIP (Italian Oil and Gas company) Port-Harcourt / Nigeria to July 2005 Senior Project Control Planner for Eni Group/AGIP Assaluyeh / Iran Planning and Training Manager for Promastar Co. (Primavera Authorized representative / Egypt and Saudi Arabia ) Responsible for Primavera professional training p g courses and Primavera consultation services. Planning and Cost Control Manager for Bin-Jarallah Group / Riyadh Planning and Cost Control Manager for Saudi Lada Group Riyadh May 2011
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Introduction
Course Overview Risk communication 27%
Risk Response Planning 26%
• • • •
• Develop a risk response strategy • Develop a contingency approach • Present recommendations to key stakeholders t k h ld
Apply interpersonal skills Assess stakeholder risk tolerance Document risk-related information Create regular status reports
Risk Analysis 30%
Risk Governance 17% Document and record lessons learned Refine risk policies and practices Create the risk management plan Establish metrics for risk management processes • Examine process performance • Monitor risk performance • identify relevant policies and standards www.pmhouse.org RMP-PMI
• Identify Risk • Evaluate risk attributes using qualitative and q q quantitative risk analysis • Prioritize risk • Establish control limits
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• • • •
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Introduction
Assessment of Risk ☺
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Introduction
Project j Risk
Risk • An uncertain event or condition that, if it occurs, has a positive or a negative effect on a project’s objective
Source: PMBOK® Guide, p. 438 May 2011
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Introduction
Elements of Risk Every risk consists of three elements
A definable event Probability of occurrence
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Impact p (consequence) of occurrence
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Risk Exposure Is a Function of Its Components Risk exposure = (probability of occurrence) × (impact of occurrence)
PROBA ABILITY OF O OCCURREN NCE
high
High threat or or opportunity Moderate threat or threat or opportunity Low threat or or opportunity low high
low
IMPACT OF OCCURRENCE May 2011
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Introduction
Characteristics of Risk Events Risk events are— • Situational – They have no textbook answer – Team must rely y on sound use of tools and methods/techniques • Time-based – Risk is a future phenomenon only – Time affects risk perceptions • Interdependent – One O risk i k eventt can affect ff t others th – One risk can cause others – Quantity of risks may affect perceptions
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Introduction
Characteristics of Risk Events (continued) Risk events are— • Magnitude dependent – The greater the payoff, the more acceptable the risk – The higher the impact, the more significant the risk • Value based – Personal and cultural values affect company risk taking – Company C values l affect ff t iindividual di id l choices h i – Everyone sees risk differently
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Introduction
Project Risk Management Project Risk management includes the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project
Threat
Opportunity
Source: PMBOK® Guide, p. 436 May 2011
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Introduction
Responsibilities in Risk Management p g
Project Team
Project Manager
Initiate and lead e risk management process Provide direction to the project team on the risk management process and tools
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Project Manager
Understand and follow the risk management process E Execute t risk ik management strategies Report status on the risk management process
Project Team
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Introduction
Benefits of Risk Management Risk management benefits— Please record on the flip chart • Minimize management by crisis • Encourage proactive management • Minimize surprises p and p problems • Gain competitive advantage • Decrease overall probability of project variances • Increase probability of project success • Increase profitability • Focus on building the right product the first time • Prevent problems from occurring, or if they occur, from escalating
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Introduction
Types of Risks Risks can come from internal or external sources and will be either
Business risks Normal risks of doing business that carry the potential of both gains and losses g
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Pure, or insurable Pure Risks that present potential for loss p only
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Uncertainty • Known risks: Risks that were identified by the project team • Unknown risks: Risks that were not identified
Your objective… To increase the Known/ Known and decrease the Unknown/Unknowns using Risk Management
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Introduction
Critical Success Factors Critical success factors— • A process rooted in group techniques • A set of analytical tools that supports these factors • Continuous and ongoing planning and preparation for risk management • Communications with team members and key stakeholders
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Introduction
Risk Management Processes in PMBOK Guide Plan Risk Management (What, when, how) Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Monitor and Control Risks May 2011
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Introduction
Risk Management Process Inputs • • • • • • • • • • • • • •
Requirements Process Management Schedule Budget Quality Assumptions Constraints Testing Expectations Deployment Security Training Risk Attitudes and Tolerances
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Tools & Techniques • Risk Management T&T
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Outputs • • • • •
Risk management plan Risk register Prioritized risks Risk response plans Project plan updates
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Introduction
Risk Management and Project Management Project management focuses on Planning, organizing, directing, and controlling an organization’s resources to provide a product or service on schedule, within budget and to the customer’s budget, customer s stated requirements
Risk management focuses on Identifying, quantifying, responding to, and controlling the risks in a project
How do they interact? May 2011
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Introduction
Exercises 1 Match the list of terms to the correct definitions. A A description of the scenario that may occur if the risk were to materialize A. materialize. B. Describes how the risk management processes will be carried out. C. Signs or indications that a risk event is about to occur or has occurred. D. An uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives. E. The result and consequences of the probability of the risk occurring. F. Contains all the identified risks, the results of risk analysis, the proposed risk responses, and the current status of the risk , among a few other things. G. The likelihood that a risk will occur. H. A hierarchical breakdown of risks organized by risk categories and sub categories. I. Something that is occurring now in the present.
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D I A C B F H G E
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Risk Issue Risk Event Risk Trigger Risk Mgt Plan Risk Register RBS Probability b bili Impact
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Introduction
QUESTIONS? May 2011
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Risk Management Professional (PMI-RMP ®) Exam Preparation
Plan , Identify & Communicate Risk
“PMI-RMP” is a certification and trademark mark of the Project Management Institute, Inc. May 2011
www.pmhouse.org
RMP-PMI
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Course Overview Risk communication
Risk Response Planning
Apply interpersonal skills Assess stakeholder risk tolerance Document risk-related information Create regular status reports
Risk Governance
Risk Analysis
• Document and record lessons learned • Refine risk policies and practices Create the risk management plan • Establish metrics for risk management g processes • Examine process performance • Monitor risk performance • identify relevant policies and standards www.pmhouse.org RMP-PMI
Identify Risk • Evaluate risk attributes using qualitative and quantitative risk analysis • Prioritize risk • Establish control limits
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• Develop a risk response strategy • Develop a contingency approach • Present recommendations to key stakeholders
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Pl Ri Plan Risk k Management M t Defines the scope and objectives of the Project Risk Management process, and ensures that the risk process is fully integrated into wider project management.
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Pl Ri Plan Risk k Management M t iinputs t Inputs
Project scope statement Cost Management plan. Schedule Management plan. Communication Management plan. Enterprise Environmental Factor Organization Process Assets
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Planning Meeting & Analysis Tool & Technique Purpose Who attends
• To develop the risk management plan • Project manager , selected project team members and stakeholders , anyone else involved in the risk management planning activities • Early on within the project When • All inputs into the plan risk management process Information • Estimate costs of conducting risk management Sample agenda • Develop risk schedule activities The result • Plan risk contingency reserve approach • Identify risk categories to be used Risk Management • Define levels of risk , probability , and impact • Create/modify C t / dif probability b bilit and d iimpactt matrix ti Plan May 2011
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Ri k M Risk Managementt Pl Planning i Outputs O t t Risk categories Probability and Impact Matrix
Methodology
Definitions of risk probability and impact
Roles and responsibilities Risk Management Planning outputs B d ti Budgeting
Timing
Revised stakeholders’ tolerances
Reporting formats
T ki Tracking Source: PMBOK® Guide, pp. 279-282 May 2011
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S Sample l Risk Ri k M Managementt Pl Plan output t t Required Work
Roles R l and d Responsibilities
Time
Methodology
Budget
Identify Risks
Abdo
3 weeks
Brainstorming
$2000
Perform Qualitative Risk Analysis
Omar
2 weeks
P & I assessment
$4000
1 week
Monte Carlo
$2500
2 week
Response strategies
$6000
Perform Quantitative Risk Analysis
Salma
Plan Response to Risks
Ali
Monitoring & Control Risks
Ahmed
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All Project period
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Audit
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$18,000
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Risk Management Plan output Defined Conditions for impact p Scales of a Risk on Major j project p j objective j
Relative or numerical Scales are Shown Project objective
Very Low V L / .05
Low L / .10
Moderate M d t / .20
Cost
IInsignificant i ifi t Cost increase
40% costt increase increase increase
Time
Insignificant Time increase
% Time increase
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Risk Management g Plan output p
Impact Probability
Very Low
Low
Moderate
High
Very High Hi h High Moderate Low Very Low
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Very High
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Risk Management g Plan output p
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Communication in the Risk Management Process Process
S k h ld must understand: Stakeholders d d • Implications of risks and responses • Status and potential risks
Team members must understand: • Effectiveness of risk responses carried out • Workarounds chosen • Stakeholder perceptions and directions
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• Should be timely and regular • Should communicate i tto kkey issues stakeholders and team members
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E Exercises i 2 Match the risk management plan content item with the d descriptions i i provided: id d A. Defines how the risk activities will be recorded for reference during the project and within lessons learned. B Amount of funds that are set aside for risks and the contingency B. reserve. C. Uses a scale or rating system. D. Describes the approach pp used to carry y out risk management. g E. Systematically classifies risks. F. Describes the risk threshold attitudes. G. Identifies who is responsible for the risk activities. H. Describes how the results of the risk management processes will be documented, analyzed, and then shared. I. Used as a look-up table. J. When and how often the risk management processes are carried out. resent.
D G B J E C I F H A
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Methodology Roles & Responsibilities Budgeting Timing Risk Categories Definition Probability &Impact Probabilityy & Impact Matrix Stakeholder Risk Tolerance Reporting Formats Tracking
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GROUP EXERCISE Prepare Risk Management Plan for your p y project! j
Deliverables: 1- Who will do What , When , How much it will cost y you and How y you are going to do it ? 2-Risk categories 3- Prob./Impact Matrix
20 Min ☺ May 2011
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Id tif Risks Identify Ri k Identifies as many knowable risks as practicable practicable.
You need to Identify and document the CHARACTERISTICS of project risks.
Practice Standard for Project Risk Management, p. 16 May 2011
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Id tif Risks Identify Ri k iinputs t Inputs
•Risk Management Plan •Stakeholder register •Activity cost/duration estimates •Cost/Schedule/Quality mgmt plans •Scope baseline •Project documents •Enterprise Environmental Factor •Organization Process Assets
*Source: PMBOK® Guide, pp. 284–285 May 2011
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Identify Risks inputs & Tool and Techniques Inputs
• Risk Management Plan • Stakeholder register • Activity cost/duration estimates • Cost/Schedule/Quality mgmt plans • Scope baseline • Project documents • Enterprise Environmental Factor • Organization Process Assets
Tool &Techniques i
Documentation reviews • Risk identification techniques • Checklist, questionnaires, ti i and d templates • Assumption analysis • Diagramming techniques • Affinity diagramming
*Source: PMBOK® Guide, pp. 284–285 May 2011
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T l and Tools d Techniques T h i to t Identify Id tif Ri Risks: k Analogy gy Checklists, questionnaires, templates
Affinity Diagram
Prototyping yp g
Tools and Techniques
Expert interviews
Delphi technique SWOT Analysis
B i t Brainstorming i Documentation Review
Source: PMBOK® Guide, pp. 286-288 May 2011
Nominal g groupp technique q (NGT)
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Analogy Process Based on the idea that no new project represents a totally new system
Identify information needs
Identify “similar” projects
Collect useful data
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Finalize list of risks and place on Risk Li i Listing
Analyze data
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Ch kli t Questionnaires, Checklists, Q ti i and d Templates T l t Again, based on the idea that no new project represents a Again completely new set of risks • A list of threats that have occurred on certain types of projects in the past • Some publicly available risk checklists, questionnaires, and templates – Software Engineering Institute (SEI) Risk Taxonomy (an organized list) – Software Program Managers Network (SPMN) • Examine checklists or questionnaires to generate additional risks for the project
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E Expert t IInterviews t i
Identify experts and interviewers
Prepare for the interview and target Interested area
Document and verify interview
Document on the Risk Listing and follow through
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Solicit jjudgment g and general information
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D l hi T Delphi Technique h i Steps p of the Delphi p Technique q 1. Coordinator formulates the problem and distributes it to experts in the field.
2. Experts send written position papers to coordinator.
3. Coordinator sends out position papers.
4. Experts reconsider their positions and submit changes as appropriate. 5 R 5. Resubmissions b i i are reviewed; i d repeat steps 4 through 6 as needed. 6. Finalize list of risks and pplace on risk listingg form or other documentation tool. May 2011
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B i t Brainstorming i P Process Number your ideas Start with a clear statement of the problem
Structure Sessions • Use U ffacilitator ilit t • One speaker at a time • Volume, not depth • No critiquing or arguing • Post all rules and ideas on the wall
• Helps competitive instincts for sessions • Helps as a reference for discussion Use spatial and physical memory • Use Post-It® Notes, rolls of paper on walls, other materials t i l as needed d d
Expect momentum to build • Momentum builds slowly at first, then intensely before reaching hi a plateau. l • At plateau, jump to another topic to keep creativity high
• Anyone can draw as they please • H Helps l fi fix mindset i d t tto a location, improves recall
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Make it fun!
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Pl Place results lt on the th risk i k li listing ti
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N Nominal i l Group G Technique T h i (NGT) STAGE 2
STAGE 1
Each member of a small group (6 to 12) writes down what he or she sees as the major issues to the proposition—no talking!
st person pe so reads eads ooff oonee item te from o hiss First or her list Item is recorded on a large pad of paper in front of the group N t person does Next d the th same Continue in order until all lists are exhausted Again—no talking Facilitator finalizes and adds to Risk Register
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Exercise A-1 A1 Identification Techniques— Techniques Project XYZ
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SWOT Analysis
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P t t i Prototyping
Develop initial requirements
Design and build prototype Test with users
Modify initial requirements Finalize requirements
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Analyze results
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Affi it Di Affinity Diagramming i • Builds on brainstorming, brainstorming OR NGT by providing a method of sorting or classifying data • Is done in silence • Is creative rather than analytical • Sorts a large volume of data quickly • Produces order from chaos • Can lead to breakthrough thinking • Tends to reduce tension THE AFFINITY DIAGRAMMING PROCESS All risk events are placed on small pieces of paper
Team members examine risk events
Process continues with all team members operating in silence il
Process ends when no further movements are made by team members b
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Team members individually and simultaneously place risk events into groups on wall
Team decides names for each grouping
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S Sample l Affinity Affi it Diagram Di What are the issues involved in influencing total quality training in our community? DEVELOP AN EFFECTIVE MARKETING ARM Establish a Web site and bulletin board for capturing p g ideas and broadcasting successes Design new marketing brochures Redesign organization logo Develop and send out a monthly newsletter Update mailing list/expand mailing list Sponsor quality awards and award events for local community organizations May 2011
INVOLVE COMMUNITY CEOs IN OUR ORGANIZATION Develop and implement a stakeholder management plan to obtain and sustain our top management buy-in
DEVELOP A COMPLETE QUALITY CURRICULUM Establish a complete program of training for org members Develop new training programs
Recruit active membership of established leaders
Send selected members for certification so theyy can train; mentor the rest
Develop a plan and process for involving top mgmt from f our andd other organizations
Work with local communityy college g to promote an associate degree in quality
Encourage our top management to seek specific ifi help h l from f other th CEOs
Provide quality resource materials in the organization's library
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RECOGNIZE AND IMPROVE CURRENT TRAINING EFFORTS Reward organizations that are putting members through quality training now (a dinner?) Look for corporate scholarships or other funding opportunities Standardize and improve our training process Establish a process to capture lessons learned from organizations that have sent people th through h quality lit ttraining i i
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Ishikawa Diagram • AKA AKA, FISHBONE • Cause and Effect • Mind Mapping Technique
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Risk Ri k R Register i t (S (Sample) l ) WBS Number
Category
1.5
Contract
Labor rates may be substantially lower, resulting in a cost savings
1.1.3
Technical
Use of an automated test tool could result in a schedule duration savings or reduction
1.1.41
Technical
Customer fails to identify all site conditions properly, causing installation problems on-site
Opportunity Event
1.3.2
Subcontractor employees not properly trained to conduct systems integration integration, resulting in possible quality problems and schedule delays of Event 1 month Threat Probability
WBS Number
Category
1.2.1
Req’s1.5.6
damagesofclause in contract result in Poor Liquidated customer definition requirements negative financial impactimplementation of $100,000 if we causes major delay in project deliver late
1.1
Schedule
Personnel unavailability due to staffing delays causes delay in prototype validation
2133 2.1.3.3
Regulatory
Building excavation necessitates additional drainage runoff construction
2.4.5
Physical
Two extra conference rooms required within production area
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Probability
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Impact
Impact
Overall Rating
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Overall Rating
Priority Ranking
Priority Ranking
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E Exercises i 3 B C B E A D A B E C A D C
Match each of the characteristics listed to the corresponding tool and d technique h i off the h Identify Id if Risks Ri k process 1.Attempts to create a comprehensive list of risks. A. Documentation Reviews 2. Participants respond anonymously. B Brainstorming B. 3.Includes a multidisciplinary set of experts. C. Delphi Technique 4.Identifies the source of the risk. D. Interviewing 5.Performs a structured review. E Root Cause Analysais / E. 6.May be conducted one-on-one. Identification 7.Determines risk by comparing project planning to project requirements and assumptions. 8.Sometimes utilizes the RBS as a framework. 9.Groups risks by causes. 10.Attempts to reduce bias in the data. 11.Concerned with the quality of the project plans. 12.A primary source of risk identification data gathering. 13.Attempts to reach a consensus regarding project risks.
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E Exercises i 4 B C E A D F A E C E B F D
Match the following tools and techniques with their corresponding characteristics: h i i 1.Obtains information from the Project Scope Statement. A. Checklist Analysis 2.Also known as Ishikawa diagrams. B. Assumptions Analysis 3.Elements within the diagram influence one another. C. Cause and Effect 4.Utilize historical information from previous projects. Diagrams 5.Shows a process from beginning to end. D. Process Flow Charts 6.Identifies the organization’s strengths and weaknesses. E. Influence Diagrams F. SWOT Analysis 7.Utilize the lowest level of the RBS as a checklist. 8.Reflect uncertainty within potential paths. 9.Also known as fishbone diagrams. 10.Are used to make decisions. 11.Examines validity, inaccuracy, inconsistency, or incompleteness. 12.Increases the breadth of identified risks. 13.Show how various elements of a system interrelate.
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C Case St Study d A-1 A1 CCC Bank— Bank Risk Identification
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Day-2 ay
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Communication Overview Risk Communication : 27 % of In this section : PMI-RMP Exam •Basic model of communication •Communication management Plan contents •Communication methods and techniques •How to communicate effectively with stakeholders •How to tailor presentations to your audience o to o ga gather e information o a o •How •Assessing stakeholder risk tolerance •Developing reports •And More May 2011
•Communication types •Communication Mediums and method •Calculating communication channels •Communications management plan
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B i Model Basic M d l off Communication C i ti Most communication skills are common for g general management g and project management, such as, but not limited to: • Listening actively and effectively, • Questioning, Questioning probing ideas and situations to ensure better understanding understanding, • Educating to increase team’s knowledge so that they can be more effective, • Fact-finding to identify or confirm information, Setting and managing expectations, • Persuading a person or organization to perform an action action, • Negotiating to achieve mutually acceptable agreements between parties, • Resolving conflict to prevent disruptive impacts, and Summarizing, recapping, and identifying the next steps. Source : A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — Fourth Edition
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B i model Basic d l off communication i ti
Decode
Message Feedback
Decode Encode
Encode Medium R Receiver i May 2011
We’re talking about EFFECTIVE communication of ideas, thoughts and info. Only SUCCESSFUL when Tx and Rx understand same information. Otherwise, misunderstanding g will create roadblock to goals GOAL is to break barriers
Message: lengthy, disorgani ed erroneo disorganized, erroneous, s Poor language: verbal or body Context/Situation: too much too fast? Mind other people’s time.
S d Sender www.pmhouse.org
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Communication Types and Situation
Preferred Method
memo
Informal Written
Project Plan , report
Formal Written
L Long Distance Di t
F Formal lW Written itt
Meetings
Informal Verbal
P Presentations t ti
F Formal lV Verbal b l
Conversations
Informal Verbal
Complex Problems
Formal Written
Email
Informal Written
Notes
Informal Written
Speeches
Formal Verbal
Project Charter
Formal Written
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•55% is are non-verbal (physical mannerism) •Para-lingual •Active Active Listening •Formal Written: charter, plans, long distance Best method to use for complex issues •Formal verbal •Informal Written: emails, memos • Informal I f l verbal: b l meetings, conversations
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Communication Mediums & Methods Communication Methods : Collecting g , Sharing g , and distributing communication Distributing g Methods •Meeting •Hard-copy Documents •Manual Filing Systems •Electronic Databases •E-mail •Fax , Voicemail •Telephone •Video / web conferencing •Web Publishing •Project Management tool May 2011
•Communication Methods •Face to Face Meeting Best Method •Phone conferencing •Web W b conferencing f i
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Calculating Communication Channels
If Total Project stakeholders = 4 Comm Channels = n(n Comm. n(n-1)/2 1)/2 Comm. Channels = 4(4-1)/2 Comm Channels = 6 Comm.
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C Communication i ti M Managementt Plan Pl Provide P id Stakeholder communication requirements; • Information to be communicated, including language, format, content, and level of detail; • Reason for the distribution of that information; • Time frame and frequency for the distribution of required information; • Person responsible p for communicating g the information;; • Person responsible for authorizing release of confidential information; • Person or groups who will receive the information; • Methods or technologies used to convey the information information, such as memos, e-mail, press releases; • Resources allocated for communication activities, including time and b d t budget; • Escalation process identifying time frames and the management chain (names) for escalation of issues that cannot be resolved at a lower staff l level; l May 2011
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C Communication i ti M Managementt Plan Pl Provide P id • Method M h d ffor updating d i and d refining fi i the h communications i i management plan as the project progresses and develops; gy; • Glossaryy of common terminology; • Flow charts of the information flow in the project, workflows with possible sequence of authorization, list of reports, and meeting plans etc plans, etc.;; and • Communication constraints, usually derived from specific legislation or regulation, technology, and organizational policies, etc.
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Communication Management Plan Inputs
Tool & Techniques
•Stakeholders Register • Communications g •Stakeholder Mg. Strategy Requirement Analysis Enterprise Environmental • Communication Technology, •Enterprise Methods & Models. Factors g Process •Organization Assets
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E Exercises i 5 Which of the following communication methods is considered to be the best ? A. Face-to-Face Meeting B Phone Conferencing B. C. Web-Conferencing D Email D.
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C Communication i ti P Project j t Risk Ri k Overview • Factors that impact the communication of risk : Ri k attitudes Risk ttit d Psychological factors Utility theory Organizational theory • Stakeholder Risk tolerance • Communicating risks to stakeholders
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Ri k attitudes Risk ttit d Risk Averter
Risk Neutral
Risk Seeker
Risk Tolerant : He isn’t concerned about risk or allows it to influence their decisions , but becomes surprised p by y risk if it converts into an issue May 2011
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NEW Slide
Ri k attitudes Risk ttit d Risk Averter
Risk Neutral
Risk Seeker
U: Represents utility; the amount of satisfaction or pleasure that the individual receives from a payoff The X axis in this case is the amount of money at stake (but can also potentially represent technical performance or schedule). Source: Project Management: A Systems Approach to Planning, Scheduling, and Controlling, Tenth Edition by Harold Kerzner May 2011
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Psychological factors , Utility theory and Organizational theory • Psychological factors may be the underlying reason for risk attitudes People resist change personal control Influenced byy individual has level of p Influenced on an emotional level • Utility theory : Attempts to formalize how much you are welling to accept risk • Organizational theory g into the ways y that people p p , teams , and organizational g units Provides insight behave based on the organization types and structure Identify , Plan , Communicate Risk
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Stakeholder Risk tolerance • Risk tolerance “ The degree , amount , or volume of risk that an organization or individual will withstand “ PMBOK ® Guide Definition • How to assess risk tolerance ? EEF , OPA , stakeholder register and management strategy • To communicate risk to stakeholders you need to obtain info. f from f Communication management plan Stakeholder register Stakeholder management strategy Risk management plan May 2011
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E Exercises i 6 ________________________ attempts to formalize the subjective views of stakeholders. A. Risk attitudes B Psychological B. P h l i l ffactors t C. Utility theory D. Organizational O theory
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E Exercises i 7 ________________________ Provides insight into the ways that people , teams , and organizational units behave based on the organization types and structure A. Risk attitudes B Psychological factors B. C. Utility theory D Organizational theory D.
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Assessment Communication ☺
May 2011
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General Management Skills • Interpersonal & General management Skills “ Communication skills g Skills Management Leadership Styles Conflict Management Motivating skills
May 2011
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Diff Different t St Styles l off L Leadership d hi Directing: telling people what to do Coaching: giving needed instructions Facilitating: coordinating input of others Supporting: giving assistance along the way Autocratic: Making decisions without i input t Consultative: Inviting ideas from others Consensus: decision made based on agreement
NOTE: leadership MIX changes along different phases of project life. NOTE: autocratic is not always bad. PM does not have to consult others for input p all the time. May 2011
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Forming a Group NEW N WS Slide de Forming
The group first gets together with its common aim.
Storming
After a while, aims & objectives are questioned. Group experiences conflict from within.
Norming
Because of conflict, policy & procedures are drawn up and agreed.
Performing
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Group follows the policy & procedures and works effectively towards its aim.
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Forming a Group NEW N WS Slide de
FORMING
STORMING
DIRECTING
COACHING
May 2011
NORMING
PERFORMING
SUPPORTING SUPPORTING
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Conflict Management Causes of Conflicts Schedules Project Priorities Resources Technical Opinions Admin Procedures Cost Personality
May 2011
Handling Conflicts Withdrawal Smoothing Compromising F i Forcing Problem Solving (Confrontation) Collaboration
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Conflict Management (cont) When two people in Business always agree, one of them is unnecessary. All conflicts aren’t Bad. Conflict has a positive side as well as a negative side. Causes: • Poor P communication i ti • Lack of openness • Failure to respond to employee needs May 2011
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Motivational Theories
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McGregor McGregor’ss Theory Theory X
Theory Y
•
Employees inherently dislike work and will attempt to avoid it.
•
•
Employees can view work as being as natural as rest or play.
Employees must be coerced coerced, controlled, or threatened with Punishment.
•
People will exercise self-direction and self-control if committed to the object.
•
Employees l will ill avoid id responsibilities ibili i and seek formal direction.
•
The average person can learn to accept, even seek, responsibility.
•
Most os wo workers e s pplace ace security secu y above all other factors associated with work.
•
The ability to make innovative decisions is dispersed throughout the population.
•
E l Employees di display l little littl ambition. biti May 2011
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Expectancy Theory The strength to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome, outcome and on the attractiveness of that outcome to the individual Individual effort
Individual Performance
Organizational Reward
Personal Goals
The 3 Questions: 1 - If I give a maximum effort, will it be recognized in my performance appraisal? 2- If I get a good performance appraisal, will it lead to organizational reward? 3 - If I am rewarded, d d are the th rewards d ones that th t I fi find d personally ll attractive? tt ti ? May 2011
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Acquired Needs Theory Need N d ffor Achieveme nt
• Should be given projects that are challenging but are reachable • They like recognition
Need for Affiliation
• Work best when cooperating with others • They seek approval rather than recognition
Need N d ffor Power
• Need for power is socially i ll oriented, i t d rather th than personally oriented • They like to organize and influence others
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It call also David McClelland’s Theory who was an American psychologist. Noted for his work on achievement motivation
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E Exercises i 8 Match the leadership style with the description. G C F B D E A
1.When decisions are reached as a group. 2.Places emphasis on instructing others. 3.When ideas of others are encouraged. 4.Involves coordinating the ideas and inputs of others. 5.Involves providing team members with assistance. 6.When decisions are made based only on the individual that has made the decision. 7When a manager tells others what to do..
A. Directing B. Facilitating C. Coaching D S D. Supporting i E. Autocratic F. Consultative G Consensus G. C May 2011
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E Exercises i 9 Match the resolution technique to its corresponding description D E A B C
1.Where agreement is emphasized. 2.When someone pushes a decision, even if at the expense of another. 3.Where the conflict is dealt with head on and resolved. 4.Finding a solution that brings some level of satisfaction to the people involved. 5.Avoiding the issue.
A. Confronting A C f ti / Problem P bl Solving S l i B. Compromising C. Withdrawal D Smoothing D. E. Forcing
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E Exercises i 10 Match the type of power to its corresponding description C E B D A
1.Punishment for not doing something. 2.Based on the authority of someone else. 3.Based on rewarding someone for doing something. 4.An individual is an expert on a subject, and their knowledge gives them a heightened status and authority. 5.Based on a person’s position.
A. F A Formall B. Reward C. Penalty D Expert D. E. Referent
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E Exercises i 11 Match the motivational theory to its corresponding description, and write in the theorist connected to the theory after the description. C 1. States that people must first meet a basic set of needs before reaching for higher achievement. B 2. States that there are two different types of attitudes toward work; one believes that employees are inherently lazy, while the other believes employees may be ambitious and self-motivated. D 3. States that there are multiple job motivating factors and hygiene factors that affect people’s attitude at work. A 4. States that employees p y who believe that p putting g in more effort will lead to better performance.
A. Expectancy Theory A B. McGregor’s Theory of X and Y C. Maslow’s Hierarchy of Needs D Herzberg’s D. Herzberg s Theory of Motivation May 2011
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Assessment H H.R. R ☺
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QUESTIONS? May 2011
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Ri k M Risk Managementt T Testt
Test #1#
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Risk Management Professional (PMI-RMP ®) Exam Preparation
Risk Analysis
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Course Overview Ri k communication Risk i ti 27% 9 9 9 9
Apply interpersonal skills Assess stakeholder risk tolerance Document risk-related information Create regular status reports
Risk Analysis 30%
• Develop a risk response strategy • Develop a contingency approach • Present recommendations to key stakeholders
Risk Governance 17% Document and record lessons learned Refine risk policies and practices Create the risk management plan Establish metrics for risk management g processes • Examine process performance • Monitor risk performance • identify relevant policies and standards www.pmhouse.org RMP-PMI
9 Identifyy Risk ¾ Evaluate risk attributes using qualitative and quantitative risk analysis y ¾ Prioritize risk ¾ Establish control limits
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Risk Response Planning 26%
• • • •
Risk Analysis
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H How we d do risk i k analysis l i Qualitative
Quantitative Risk analysis is typically expressed in one of three forms: & Descriptive &
Categorizes the risk using a rating system of description or colors to rank probability and/or impact impact. May 2011
Quantifies risk using a numbers to indicate probability of occurrence and a dollar value to indicate impact.
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Q lit ti Risk Qualitative Ri k Rating R ti Example E l QUALITATIVE RISK RATING GUIDELINES Rank
Probability Risk event has high probability of occurrence
If risk event occurs, a significant impact to one of project objective like cost, schedule, quality, or customer satisfaction will occur
Risk event has medium probability of occurrence
If risk event occurs, a moderate impact to one of project objective like cost, schedule, quality, or customer satisfaction will occur
Risk event has low probability of occurrence
If risk event occurs, a small impact to one of project objective like cost, schedule, quality, or customer satisfaction will occur
High
Medium
Low
Impact
Defining high, medium, and low risks is subjective but Important May 2011
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Q lit ti iimpactt S Qualitative Scales l Example E l Defined Conditions for impact p Scales of a Risk on Major j project p j objective j
Relative or numerical Scales are Shown Project objective
Very Low / .05
Low / .10
Moderate / .20
High / .40
Very High / .80
Cost
Insignificant Cost increase
40% cost increase
Time
Insignificant Time increase
% Time increase
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Q lit ti P Qualitative Probability b bilit and d IImpactt M Matrix ti
High
Risk 2
M/H
M
H
Mediu um
L/M
M
M/H
L/M
M
Risk 1 Low
PR ROBABILIT TY
Risk 3
L Low
Medium
High
IMPACT
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Quantitative Probability and Impact Matrix
100% 1
Risk 2
50
75
100
50%
25
50
75
0
25
50
0%
50%
100%
Risk 1 0%
PR ROBABILIT TY
Risk 3
IMPACT
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P b bilit Analysis Probability A l i • Purpose – To understand the likelihood of the occurrence of a risk event • Sources of probability data
Subjective judgment
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Theoretical distributions
Simulations
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Historical data
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P b bilit Rules Probability R l • Mutually y exclusive events – Two or more events that can never happen at the same time • If you roll snake eyes (2), you have not rolled a 3 • If the project is late, it is not on time – If the risk event occurs, it excludes the possibility of the risk not occurring Non-mutually Non mutually exclusive events Two or more events that may or may not happen at the same time • Pulling a king or a spade from a deck of cards ― If you pull a king, it may or may not be a spade ― If you pull a spade, it may or may not be a king • A project j t can b be either ith llate t or over b budget d t or b both th ― If one event occurs the other either may or may not occur • Probabilities are expressed as decimals between 0 (definitely will nott happen) h ) and d 1 (definitely (d fi it l will ill h happen)) or as percentages t (0% (0%– 100%) www.pmhouse.org May 2011 RMP-PMI
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Mutually Exclusive Probability Rules Addition Rule – If you want to know the probability of one thing or another thing happening, ADD – P(A ( or B)) = P(A) ( ) + P(B) ( ) • 10% chance that a project will be completed on time OR a 45% chance that the project will be completed early • 10% + 45% = 55% ((Project j will be completed p on time or be early) • Multiplication Rule – If yyou want to know the probability p y of one thing g and another thing happening, MULTIPLY – P(A and B) = P(A) x P(B) project j will be over budget g if it is late • 70% chance that a p AND a 45% chance the project will be late • 70% x 45% = 31.5% (Project will be late and over budget)
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Mutually Exclusive Probability Rules (continued) • Summation Rule – All of the possibilities that could happen, when added, must total 1 (100%) – P(A) + P(B) + P(C) …. = 1.0 10 • 20% probability that the project will be more than 3 weeks late; 25% that the project will be 1 to 3 weeks late; 10% that the project j t will ill b be on titime; 45% that th t the th project j t will ill b be early l • 20% + 25% + 10% + 45% = 100% (100% chance that one of p will be met)) these schedule options • 1 Minus Rule – The probability that Event A will occur is 1 minus the probability th t E that Eventt A will ill nott occur • 70% probability it will not rain 1 0 – 0.70 0 70 = 0.30 0 30 (30% probability it will rain) • Event A = 1.0 May 2011
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36 Ways W for f Di Dice tto F Fall ll
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E Exercise i B-1 B1 You roll a single die. What is the probability of : 1 Getting 1. G tti a six? i ? 2. Getting a five? 3 Not getting a six? 3. 4. On the second roll, getting a six? 5. On the second roll, getting a five? 6. On the second roll, not getting a six?
May 2011
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A Answer E Exercise i B B-1 1 1. 2. 3 3. 4. 5 5. 6.
May 2011
Getting a six? 1/6 Getting a five? 1/6 N t getting Not tti a six? i ? 5/6 On the second roll, getting a six? 1/6 On the second roll roll, getting a five? 1/6 On the second roll, not getting a six? 5/6
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E Exercise i B-2 B2 For two consecutive rolls of the single die, what is the probability of—Getting a six? 1. 2 2. 3. 4. 5.
Getting two sixes in a row? Getting two fives in a row? Getting a five and then a six? Getting no sixes on either roll? Getting at least one six?
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A Answer E Exercise i B B-2 2 1. 2. 3 3. 4. 5 5.
Getting two sixes in a row? 1/6 x 1/6 =1/36 Getting two fives in a row? 1/6 x 1/6=1/36 G tti a five Getting fi andd then th a six? i ? 1/6 x 1/6 =1/36 1/36 Getting no sixes on either roll? 5/6 x 5/6 =25/36 Getting at least one six? 11/36
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The Th Purpose P off Risk Ri k Analysis? A l i ? We analysis risk to • Determine probability of the risk happening • Determine impact of the risk if it happens • Estimate overall rating of the risk risk, either qualitatively or quantitatively
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Ri k A Risk Analysis l i Inputs • Categorized list of risks • WBS • Contractual requirements (statement of work) • Cost and schedule estimates • Lessons learned files • Staffing plan • Other project-related plans • • • •
Rating system guidelines Risk i k Register i Risk Management Plan Risk, Cost, Schedule mgmt. plans • OPA • Scope Statement
Outputs
Tools and Techniques • Data Gathering and Representation Techniques • Interviewing • Probability distributions • Expert judgment • Qualitative Risk Analysis • Probability and Impact matrix • Quality of risk data • Urgency of risk response • Risk categories g • Quantitative Risk Analysis and Modeling Techniques • Sensitivity analysis • Expected monetary value analysis • Decision tree analysis • Modeling and simulation • PERT
•Risk Register Update
Source: PMBOK® Guide, p. 274 May 2011
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S Sources off IImpactt D Data t
May 2011
Historical data
Estimates
Expert judgment
Simulations
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I Impact t Analysis A l i
Project cost
May 2011
• Each risk event must be analyzed to assess potential impacts to project costs resulting lti ffrom such h ffactors t as— – Labor rates – Task duration – Direct materials – Equipment and tools
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I Impact t Analysis A l i
Project schedule
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• Each risk event must be analyzed to assess potential impacts to the project schedule resulting from such factors as— – Resource shortages – Duration expansions – Other delays
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I Impact t Analysis A l i
Project scope
• Each risk event must be analyzed to assess potential impacts to the project scope resulting from factors such as as— – Increased requirements – Reduced work effort – Product reliability – Qua Quality ty level eve of o de deliverable ve ab e – Product safety
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T l and Tools d Techniques T h i for f Risk Ri k Analysis A l i • • • • •
Expert judgment p value Expected Decision trees Program Evaluation and Review Techniques (PERT) Computer simulations – Monte Carlo
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Expert E tJ Judgment d t •SME’s SME s (subject matter experts) •PMO •Other units within the organization. •Consultants •Stakeholders, including customer t and d sponsors. •Professional and technical associations. associations •Industry groups.
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Expected Monetary Value (EMV) Expected p value ((EV)) is a statistical assessment of risk value, For threats, threats expected value is called exposure For opportunities, expected value is called leverage Each risk event identified has a probability of occurrence that can be weighted against the impact
Expected value = probability × impact May 2011
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Ri k E Risk Events t and dE Expected t dV Value l
WBS Number
Category
Opportunity Event
Probability
Impact
1.6
Req’s
Prototype function correctly the first time
20%
-$200,000
WBS N Number b
C t Category
Th t Event Threat E t
P b bilit Probability
I Impact t
1.4.1
Contract
Suppliers strike during project
50%
+$500,000
2.1.9
Natural Hazards
Snowstorm in March
90%
+$5,000
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Overall Rating
Priority Ranking
Overall R ti Rating
Priority R ki Ranking
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Expected Value Example Project BUDGET baseline = $5,000,000 $5 000 000 Risk Event
Probability × Impact
pp strike 1. Suppliers during project (T)
0 50 x $500 0.50 $500,000 000
2. Prototype functions correctly the first time (O)
0 20 x –$200 0.20 $200,000 000
3. Snowstorm in March (T)
0.90 x $5,000 Total value of risk events
T = Threat Th t O = Opportunity
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Expected Value $250,000 –$40,000
$4,500 $214,500
Project P j t budget/ b d t/ costt baseline
$5,000,000
Adjusted total project baseline
$5,214,500
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E Expected t d Value—Expanding V l E di th the Range R • Expected value for a project should be evaluated against the best-case and the worst-case scenarios BEST CASE
WORST CASE
• Everything hi hhappens perfectly f l
• Everything hi goes wrong
• Probability for threats = 0%
• Probability for threats = 100%
• Probability P b bilit for f opportunities t iti = 100%
• Probability P b bilit for f opportunities t iti = 0%
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Expected Value—Expanding the Range ( (continued) ti d) Risk Event
Probability × Impact
Expected Value
Best Case
Worst Case
1. Suppliers strike during gp project j ((T))
0.50 x $500,000
$250,000
0
2. Prototype functions correctly th first the fi t time ti (O)
0.20 x –$200,000
–$40,000
–$200,000
0
0.90 x $5,000
$4,500
0
$5,000
3. Snowstorm in March (T)
Total value of risk events T = Threat Th t O = Opportunity
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$500,000
$214,500
–$200,000
$505,000
Project P j budget/ b d / cost baseline
$5,000,000
$5,000,000
$5,000,000
Adjusted total project cost
$5,214,500
$4,800,000
$5,505,000
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Exercise – Expected Value You are the proposed project manager for the construction of a new electric power plant using solar thermal technology. technology This power plant is designed to last 10 years. years Expenses to construct the plant are estimated to be $100 million, but you have identified a 10 percent chance of litigation by environmental groups during this 10-year period over land use that could add $20 million to the cost of construction. Over the p plant’s useful life,, the electricityy ggenerated is expected p to p produce $40 million each year in revenue. However, you have several industry and Department of Energy reports indicating that increased demand for power and dwindling baseload supply have a 25 percent chance of causing electricity prices to rise, so you could realize additional revenues of $10 million per year off operation. i P i ll offsetting Partially ff i that h goodd news is i a 40 percent chance h that h the h county will ill raise i reall estate taxes for industrial land use that significantly affects natural habitats of certain wildlife species. This raise in taxes could potentially reduce your revenues by $2 million per year. In addition there is a 25 percent chance, addition, chance per year of operation, operation of a fire caused by reflection from heliostats, which would reduce your revenue by $1 million in any year in which such a fire occurs. Insurance could be purchased to fully protect you from such losses for $250,000 per year. Other mishaps already are covered by a blanket insurance policy included in the base operating costs. Operational and maintenance costs to run the plant are expected to be $10 million a year. Decommissioning costs at the end of the 10-year life would be $35 million (real current dollars). Your government affairs division estimates that there is a 35 percent chance that increased environmental requirements will be passed by the end of 10 years, years so the decommissioning costs actually could be $5 million higher. May 2011
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Exercise – Expected Value What is the value of the project if none of the identified risk events occur? What is the overall expected value of the project, considering the baseline and all risks? What is the worst-case value for this project? What is the best-case value for this project? Would it be more prudent to purchase insurance against heliostat fires or risk the chance of a fire?
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D i i T Decision Tree A Analysis l i • An effective mind tool • Help you CHOOSE between different courses of action. • Explore options & investigate possible outcomes associated with each. • Help you to FORM A BALANCED PICTURE of the risks and rewards associated with each possible course of action. action • Decision Nodes: squares • Chance Nodes: circle • End Nodes: triangles
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D i i T Decision Tree—Example E l Should we build a prototype of the new flight simulator product? Project requirements were poorly defined. As a result, there is the risk that the final product will not pass the customer t acceptance t test. t t A prototype t t also l would ld substantially reduce the cost of rework for failures at customer acceptance test. Cost to build prototype
$98,000
Probability of passing customer acceptance test With prototype
90%
Without prototype
20%
Cost of rework after customer acceptance test With prototype
$20,000
Without prototype
$250,000
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D i i T Decision Tree with ith P Probability—Example b bilit E l
Pass customer acceptance test Build prototype Fail customer acceptance p test Pass customer acceptance test Do not build prototype p yp Fail customer acceptance test
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D i i T Decision Tree with ith P Probability—Example b bilit E l
Pass customer acceptance test Build prototype Fail customer acceptance p test Pass customer acceptance test Do not build prototype p yp Fail customer acceptance test
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Decision Tree Scenario with Expected V l Value—Example E l
Pass customer acceptance test Build prototype Fail customer acceptance p test Pass customer acceptance test Do not build prototype p yp Fail customer acceptance test
Expected Value with prototype: $98,000+$0+$2,000 = $100,000 Expected Value without prototype: $0+$0+$200,000 = $200,000 May 2011
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Exercise – Decision Tree You travel regularly from Cairo to London on business. business Historically, Historically the accounting department always told you to fly Egypt Airlines to save money. y The Cairo-London run is $750. You would much rather fly bmi Air, which has a wonderful frequent-flyer program and much better food. The Cairo-London run is $1,000 on bmi. If you arrive i in i London L d on time, i no extra costs are incurred. i d When Wh you arrive late, the company normally must put you up in a local hotel (rather than making a same-day return) at a cost (including per diem) of $250. The company also loses an extra full day of your y Egypt gyp Airlines has an time, and yyour fullyy loaded rate is $800/day. on-time arrival record of 60 percent on the Cairo-London trip. bmi Air has an on-time arrival record of 90 percent on the same run. B ild a decision Build d i i tree t to t presentt this thi case. May 2011
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PERT—One of the More Significant Statistical Sums Used in Risk Analysis • An event event-oriented, oriented network analysis technique used when there is a high degree of uncertainty with task duration estimates • Helps H l d determine t i th the probability b bilit di distribution t ib ti off various i outcomes • Applies the critical path method (CPM) to a weighted average estimate for task durations
Start
Task 1
Task 2
Task 3
16 Days
11.3 Days
14.7 Days
Task 4
Task 5
Task 6
14 Days
8 Days
5 Days
End
E Expected d project j duration d i = 42 days d = Mean M =E Expectedd critical i i l path h May 2011
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Determine Critical Path Estimate Pert weighted average (Mean) = Optimistic + 4(Most Likely) + Pessimistic 6 Standard deviation (σ) = Pessimistic – Optimistic 6 Task
Pessimistic Most Optimistic (P) Likely Lik l (ML) (O)
Te
σ
1
25
16
7
16.0
3.00
2
15
11
9
11 3 11.3
1 00 1.00
3
28
13
8
14.7
3.33
Total
68
40
24
42.0
NA
Expected Project Duration Expected Critical Path Mean May 2011
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Standard Deviation for the Critical Path Using PERT
σ
2 Task 1
+σ
2 Task 2
+σ
2 Task 3
σ
Task
(P)
(ML)
(O)
Te
1
25
16
7
16.0
3.00
2
15
11
9
11.3
1.00
3
28
13
8
14.7
3.33
T t l Total
68
40
24
42 0 42.0
= (3.00)2 + (1.00)2 + (3.33)2 = 9.00 + 1.00 .00 + 11.08 .08 = 4.59 (+/-)
Figure e(t) path ( ) and SD for each task and for the path. May 2011
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Standard Deviation for a the Critical Path Using PERT (continued) S d d ddeviation Standard i i ffor the h path h = 44.59 59 -1σ = 37.41 -2σ = 32.82
+1σ = 46.59
42.00
-3σ = 28.23
+2σ = 51.18 +3σ = 55.77
PR ROBABILIITY
68.26%
95.46% 99.73%
•There is a 68.26% chance that the actual project duration will be between 37.41 37 41 and 46.59 46 59 days 1σ = 4.59 +1σ = 42.00 + 4.59 = 46.59 -1σ = 42.00 – 4.59 = 37.41
•There is a 95.46% chance that the actual project duration will be between 32.82 and 51.18 days 2σ = 9.18 (4.59 x2)
POSSIBLE PROJECT DURATIONS OR COST
May 2011
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+2σ = 42.00 + 9.18 = 51.18 -2σ = 42.00 – 9.18 = 32.82
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M t Carlo Monte C l Process P P j t manager Project • Establishes probability distribution for duration and cost for each task or activityy
Tool • Conducts multiple, multiple randomly chosen simulations based on the information and the probabilities • Collects outcomes • Plots o outcomes tcomes as a range
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Risk Analysis
May 2011
138
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Risk Analysis
May 2011
139
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Risk Analysis
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140
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141
Documenting the Analysis: Risk Register T l with Tool ith Complete C l t Analysis A l i (Sample) (S l ) WBS Number
Category
Opportunity Event
Probability
Impact
Overall Rating
1.5
Contract
Labor rates may be substantially lower, resulting in a cost savings
Medium
($30,000)
M
1.1.3
Technical
Use of an automated test tool could result in a schedule savings or reduction
Medium
(4 weeks)
M
1.4.1 WBS Number
Category
121 1.2.1
Req Req’s 1 3 2s 1.3.2
1.1
Schedule 1.5
2.1.3.3
Regulatory
Customer fails to identify all site conditions properly, causing installation Threat Event Probability problems on-site Poor of nott properly Medium S b customer Subcontractor t t definition employees l l requirements causes major trained to conduct systems integration, delay in project implementation resulting in possible quality problems and schedule delays of due 1 month Personnel unavailability to Low staffing delays causes delay in Liquidated q damages g clause in contract prototype validation result in negative financial impact of $100,000 if we deliver late Building excavation Medium necessitates additional drainage runoff construction
2.4.5
Physical
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Two extra conference rooms required within production area
High
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Overall Rating
Impact High
HM
4-week delay in prototype validation
L
$150,000 in construction costs and 2-week construction delay
M
$100,000 in construction costs,3-week construction delay
MH
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Priority Ranking
Priority Ranking
Risk Analysis
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C Case Study St d B-1 B1 CCC Bank— Bank Risk Analysis
May 2011
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Risk Analysis
143
Day-4 ay
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Ri k P Risk Prioritization i iti ti Inputs
• List of analyzed y risks • Risk tolerance • Risk attitudes
May 2011
Tools & Techniques
Outputs
• Qualitative Q assessment • Quantitative assessment • Comparative risk ranking
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Ri k P Risk Prioritization i iti ti Tools T l and d Techniques T h i Tools • Qualitative risk ranking • Quantitative risk ranking • Comparative risk ranking (CRR)
Techniques • Filtering Filt i
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Expected Value Ranking • Perform expected value calculation for each risk event • Rank 1 through n, based on magnitude of expected values – Cost and schedule impacts should be ranked separately Qualitative Risk
Probability
Impact
Overall Rating
Rank
1
L
M
L/M
3
2
M
H
M/H
2
3
H
H
H/H
1
Risk
Probability
Impact
Overall Rating
Rank
1
0.10
$50,000
$5,000
3
2
0.50
$70,000
$35,000
1
3
0 70 0.70
$10 000 $10,000
$7 000 $7,000
2
Quantitative
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Filt i Filtering and d Comparative C ti Risk Ri k Ranking R ki Filtering • A question-and-answer technique that filters out risks that h are currently l lless iimportant • Questions need to be organization- and project-specific • Questions should map to key metrics previously defined
Comparative risk ranking (CRR) • A comparison p tool that p produces a reliable,, p prioritized list of important risks • Uses filtering to remove less important risks
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Filt i Filtering Will we see a significant 1 impact if this risk occurs?
NO
YES
Is this risk more likely to 2 occur?
NO
YES
Will the project be affected by 3 the risk soon?
NO
Remove from the priority listing .
YES
Can management control this 4 risk?
NO
YES This risk becomes part of the active priority risk listing. May 2011
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Risk Analysis
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C Comparative ti Ri Risk kR Ranking ki Comparison question: Which risk has more significant impact? (Assume that 4 persons are voting)
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O t t off Risk Output Ri k Prioritization P i iti ti Inputs
• Li List off analyzed l d risks • Prioritization structure
May 2011
Tools &Tech.
• Qualitative assessment • Quantitative assessment • Comparative risk ranking
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Outputs
• Updated risk register List of •List analyzed risks •Overall risk rating
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Output: Prioritized Risk Register with C Complete l t A Analysis l i (S (Sample) l ) WBS Number
Category
Opportunity Event
Probability
Impact
1.5
Contract
Labor rates may be substantially lower, resulting in a cost savings
Medium
1.1.3
Technical
Use of an automated test tool could result in a schedule savings g or reduction
Medium
1.4.1
Customer fails to identify all site conditions properly, causing installation Threat Event Probability problems on-site
Overall Rating
Priority Ranking
($30,000)
M
3
(4 weeks)
M
5
WBS Number
Category
1.2.1
Req’s q 1.3.2
Poor customer definition of not properly Medium Subcontractor employees requirements causes major trained to conduct systems integration, delay in project resulting in possible quality problems implementation and schedule delays of 1 month
High g
1.1
Schedule 15 1.5
Personnel unavailability due Low toLiquidated staffing delays causes damages clause in contract delay resultininprototype negativevalidation financial impact of $100,000 if we deliver late Building excavation Medium necessitates additional drainage runoff construction
4-week delay in prototype validation
L
$150,000 in construction costs and 2-week construction delay
M
3
Two extra conference rooms required within production area
$100,000 in construction costs, and 3-week construction delay
MH
2
2.1.3.3
Regulatory
2.4.5
Physical
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High
Overall Rating
6 Priority Ranking
Impact
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HM
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1 12
4 3
Risk Analysis
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C Case Study St d B-2 B2 CCC Bank— Risk Prioritization
May 2011
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Risk Analysis
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QUESTIONS? May 2011
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Risk Analysis
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Ri k M Risk Managementt T Testt
Test #2#
May 2011
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Plan Risk Responses
155
Risk Management Professional (PMI-RMP ®) Exam Preparation
Plan Risk Responses
“PMI-RMP” is a certification and trademark mark of the Project Management Institute, Inc. May 2011
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Plan Risk Responses
156
Course Overview Ri k communication Risk i ti 27%
Risk Response Planning 26%
9 9 9 9
¾ Develop a risk response strategy ¾ Develop a contingency approach ¾ Present recommendations to key stakeholders
Apply interpersonal skills Assess stakeholder risk tolerance Document risk-related information Create regular status reports
Risk Analysis 30%
Risk Governance 17% Document and record lessons learned Refine risk policies and practices Create the risk management plan Establish metrics for risk management g processes • Examine process performance • Monitor risk performance • identify relevant policies and standards www.pmhouse.org RMP-PMI
9 Identifyy Risk 9 Evaluate risk attributes using qualitative and quantitative risk analysis y 9 Prioritize risk 9 Establish control limits
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• • • •
Plan Risk Responses
157
Plan Risk Response Risk response planning involves— • Creating risk response strategies separately for both threats and opportunities • Evaluating and selecting a primary response • Incorporating I ti responses iinto t th the risk i k and d project j t plans l
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Plan Risk Responses
158
P Process t Pl to Plan Ri Risk k Responses R Input • Prioritized risk register • Opportunities to pursue, threats to respond to • Opportunities pp to accept, threats to accept • Risk management plan • Project management plan • Project documents
May 2011
Tools & Tech. • Strategies to minimize threats (negative risks) • Strategies to enhance opportunities (positive risks) s s) • Contingent responses • Expert judgment
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Plan Risk Responses
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R Response St Strategies t i for f Th Threats t Accept (accepting the consequences) Mitigate (reducing the expected value of a threat) • Minimizing the probability of the threat event • Minimizing the impact of the threat event Transfer (shifting some or all of the threat to another)
Avoid (eliminating a specific threat, usually by eliminating the cause) Source: PMBOK® Guide, pp. 303-304 May 2011
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Accept A t If risk exposure is acceptable to the project and the company— • Review organizational tolerances • Assess A organizational i ti l capacity it (t (tolerance) l ) ffor additional dditi l risk exposure • Document and communicate strategy • Continue to reassess the risk throughout the project for changes in risk exposure (Watch List) Acceptance can be— be • Active: Develop a contingency plan
• Passive: Fully accept the consequences; do nothing
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161
Miti t Mitigate If risk exposure is not acceptable to the project and company— • Take specific actions to— – Lower L th the probability b bilit off occurrence – Lower the impact of occurrence g • Evaluate and estimate effectiveness of risk mitigation strategy • Document and communicate strategy • Continue to reassess the risk throughout the project for changes to risk exposure
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Plan Risk Responses
162
Transfer T f • Transfer all or part of the risk to a third party – Subcontract – Warranties – Insurance – Customer contract • Transference does not eliminate the risk • Transference may involve payment of a risk premium
Source: PMBOK® Guide, p. 303 May 2011
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Plan Risk Responses
163
A Avoid id If risk exposure is not acceptable and/or risk mitigation or transference i not sufficiently is ffi i l effective— ff i • Cause of risk must be avoided and threat eliminated; take an alternative approach – Review organizational tolerances – Assess task vs. project avoidance – Document and communicate strategy – Continue to reassess the risk throughout the project Th product The d t description d i ti f for an elementary l t social i l sciences i education d ti multimedia lti di program references stock video clips of children riding bikes and roller skating without helmets or knee pads. During risk identification , the project team reviewed the product description and identified a potential risk of school administration not buying the program because it appears to advocate unsafe activities. Team avoided this risk by changing the project scope so that it did not include the videos.
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R Response St Strategies t i for f O Opportunities t iti Accept: Active or passive
Enhance • Maximize the probability of the opportunity event • Maximize the impact of the opportunity event
Exploit (ensure opportunity is realized)
Share (allocate all or part of the ownership to third party) Source: PMBOK® Guide, pp. 304-305 May 2011
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165
E h Enhance • Facilitate or strengthen the cause of the opportunity – Target or reinforce the trigger • Take specific actions to— – Maximize the probability of the opportunity event – Maximize the impact of the opportunity event Examples of enhancing opportunities include adding more resources to an activity to finish early
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166
Exploit E l it • Take specific actions to ensure the opportunity realized • Eliminate the uncertainty associated with a particular risk • Possibly shorten the duration of a project by: – Assign more talented resources – Provide better quality that originally planned Examples of directly exploiting responses include assigning an organization’s most talented resources to the project to reduce the time to completion or to provide lower cost than originally planned
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Plan Risk Responses
167
Sh Share • Sharing the opportunity with a third party who can benefit from the opportunity – Create risk sharing partnerships or joint ventures with the express purpose of managing opportunities
May 2011
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Plan Risk Responses
168
D fi iti Definition off Reserves R • R Reserves: Money M or ti time provided id d ffor iin th the project j t management plan to mitigate cost, schedule, or performance risk – Management M t reserves: A separately t l planned l d quantity tit of money or time intended to reduce the impact of missed cost, schedule, or performance objectives that are impossible i ibl tto plan l ffor; “unknown “ k unknowns” k ” – Contingency reserves: Quantity of money or time that is intended to reduce the impact of missed cost, schedule, h d l or performance f objectives, bj ti which hi h can only l b be partly planned; “known unknowns” • Reserves are intended only for “in scope” risks • Reserves are not part of EVM calculations • Reserves may be included in the total project budget
May 2011
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Plan Risk Responses
169
Definition D fi iti off Reserves R (continued) ( ti d) • Project cost performance baseline: Items that are known about the project and known by the team g y reserve: Allowances for unplanned p but ppotentiallyy • Contingency required changes that can result from realized risks identified in the risk register • Management reserve: Budgets reserved for unplanned changes to project scope and cost
May 2011
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Plan Risk Responses
170
F t Factors in i Determining D t i i Reserves R Life-cycle position *
Opportunity leverage
Risk tolerance levels *
Estimating approach
Factors Type of contract *
Risks accepted
Threat exposure *
Consequences of overruns *
Lessons learned
May 2011
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171
Putting Reserves in Perspective Helps with ith Fi Finall B Budgeting d ti D Decision i i +$ Total value of threat event impact
Total value of opportunity events
-$
Total expected value of threat events
*Reserves requested Project Budget Baseline
Total expected value of opportunity events
*Reserves = net expected values of threats and opportunities
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Plan Risk Responses
172
U d t Project Update P j t Management M t Plan Pl • Represents the final output of all the risk response work • Contains results of the preceding steps of risk identification, analysis, and prioritization • Includes how contingency plans will be implemented and executed • Includes how reserves will be allocated • Provides structure for future risk management updates p ag good basis for lessons learned • Represents
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Plan Risk Responses
173
P Process t Pl to Plan Ri Risk k Responses R Input • Prioritized risk register • Opportunities to pursue, threats to respond to • Opportunities to accept, threats to accept • Risk management pplan • Project management plan • Project documents
Tools & Tech. • Strategies to minimize threats (negative risks) • Strategies to enhance opportunities (positive risks) • Contingent i responses • Expert judgment
O Output • Risk register • Risk response strategies • Updated project documents
•
May 2011
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Plan Risk Responses
174
C Case Study St d C-1 C1
May 2011
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Plan Risk Responses
175
QUESTIONS? May 2011
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Monitoring & Controlling Risk
176
Risk Management Professional (PMI-RMP ®) Exam Preparation
Monitoring & Controlling Risk
“PMI-RMP” is a certification and trademark mark of the Project Management Institute, Inc. May 2011
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RMP-PMI
Monitoring & Controlling Risk
177
Course Overview Ri k communication Risk i ti 27%
Risk Response Planning 26%
9 9 9 9
9 Develop a risk response strategy 9 Develop a contingency approach 9 Present recommendations to key stakeholders
Apply interpersonal skills Assess stakeholder risk tolerance Document risk-related information Create regular status reports
Risk Analysis 30%
Risk Governance 17%
May 2011
¾ ¾ ¾ ¾
Document and record lessons learned Refine risk policies and practices Create the risk management plan Establish metrics for risk management g processes ¾ Examine process performance ¾ Monitor risk performance ¾ identify relevant policies and standards www.pmhouse.org RMP-PMI
9 Identifyy Risk 9 Evaluate risk attributes using qualitative and quantitative risk analysis y 9 Prioritize risk 9 Establish control limits
Monitoring & Controlling Risk
178
Risk Ri k Monitoring M it i and dC Control t l “[T]he process of implementing risk response plans, tracking identified risks, monitoring residual risks identifying new risks and evaluating risk process throughout the project.* • • • • •
Integrated g with p project j management g p plan Related to the accomplishment of project objectives Performed continuously during the project Determines if project assumptions are still valid Determines if contingency reserves are still accurate if they need to be changed • Determines if risk management policies and procedures are being followed and if they could be improved Source: PMBOK® Guide, p. 430 May 2011
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Monitoring & Controlling Risk
179
Overview O i off Monitor M it and d Control C t l Risk Ri k Risk management plan
Risk monitoring and control Execute
Risk response plans
Planned responses, evaluations, additional responses
Evaluate
Project execution and control processes
Document Updated risk management plan
Updated risk response development
May 2011
Progress, deviations, variances
Updated prioritized risk list
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Risk Ri k reassessment
RMP-PMI
Monitoring & Controlling Risk
180
Execute Risk Response Strategy Risk executing involves— involves • Implementing risk response strategies in the project plan • Monitoring and reacting to risk triggers, symptoms, i di t indicators and d residual id l risks i k • Communicating plan status to project stakeholders
May 2011
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Monitoring & Controlling Risk
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E Execute t Ri Risk kR Response St Strategies t i Inputs
• Project plan • Risk management plan • Risk list • Approved change requests t • Work performance information • Performance requests
May 2011
Tools & Tech.
Outputs
• Technical performance measurement • Status reports and meetings • Early E l warning i system (“triggers”)
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Monitoring & Controlling Risk
182
Ri k E Risk Execution ti Terms T Problem: A negative risk event, either known or unknown, that occurs
Windfall: A positive risk event, either known or unknown,, that occurs
Workaround: A response response, not defined in advance, advance to a negative risk event that has occurred
Corrective action: Performing the response to a negative risk event, planned , when the threat occurs May 2011
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E Execute t Ri Risk k St Strategies t i O Outputs t t Inputs
• Project plan • Risk management plan • Risk list • Approved change requests • Work k performance f information • Performance requests
May 2011
Tools & Tech.
• Technical performance measurement • Status reports and meetings • Early E l warning i system (“triggers”)
www.pmhouse.org
Outputs
• Results of implemented risk response strategies t t i • Change requests • Cost and schedule performance
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M it Project Monitor P j t Status St t Include risk review in agenda for regularly held project status meetings. Monitor— • Risk areas and descriptions • Significant risks • Progress made in risk management plan • New N problems bl or windfalls i df ll observed b d or anticipated ti i t d • Change management action required • Management action required • Risk owner’s reports on status of risks
May 2011
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Maintain Project Management Plan and Other Project Documentation • • • •
Continually maintain project plan Record trends Notify key stakeholders of results A Acquire i necessary d documentation t ti – Documentation may be required for change negotiations
May 2011
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Monitoring & Controlling Risk
186
Evaluate Results Evaluating risk response results involves— involves • Monitoring the effectiveness of risk response strategies • Evaluating corrective actions taken • Reanalyzing existing risks • Reassessing the risk environment • Evaluating project assumption validity • Identifying new risks • Adjusting the plan accordingly
May 2011
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Monitoring & Controlling Risk
187
Risk Evaluation Inputs
• Risk management plan and project plan • Cost and schedule performance • All relevant l t eventt information • Change requests
May 2011
Tools & Tech.
Outputs
• Risk reassessment • Risk Ri k audits di • Variance and trend analysis • Assumptions A ti analysis • Technical performance measurement • Reserve and contingency analysis • Status meetings
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Evaluate Results of Corrective Actions • • • • • •
Have mitigated risks been sufficiently contained? Can materialized, accepted risks be tolerated? Have contingency plan results been satisfactory? H Have workaround k d results lt b been effective? ff ti ? Has the risk life cycle ended? Is any further action required?
May 2011
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Monitoring & Controlling Risk
189
Ri k Reassessment: Risk R t Id Identify tif Ri Risks k • What new risks are due to cost or schedule variances? • What new risks are due to customer changes in requirements? • What new risks are a result of personnel or stakeholder changes? h ? • What new risks are a result of organizational or environmental changes? • What new risks are possible because of resource changes or utilization changes? • Which of the originally identified risks have changed?
May 2011
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Monitoring & Controlling Risk
190
Risk Reassessment: Analyze and P i iti Risks Prioritize Ri k • • • • • • •
May 2011
Is the probability of each risk occurring the same? Is the impact of each risk the same? priorities the same? Are the risk p Are organizational tolerances the same? Have stakeholders or sponsorship changed? Are there any new risks? Are there any response strategies that no longer work?
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Monitoring & Controlling Risk
191
Risk Evaluation Output Inputs • Project Plan • Risk management plan • Cost, Cost schedule and scope performance • All relevant event i f information i • Corrective actions • Change g requests q
May 2011
Tools & Tech. • Risk reassessment • Risk audits • Variance V i and d trend analysis • Assumptions analysis y • Reserve and contingency analysis
www.pmhouse.org
Output • Updated risk register
9Newly identified and analyzed risks 9Updated risk assessments/ratings 9New risk response strategies
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Monitoring & Controlling Risk
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Document Risk Management Outcomes Risk updating involves— • Recording outcomes of risk reassessments and evaluations • Closing Cl i outt risks i k no llonger applicable li bl • Documenting changes to probability and impact matrices and the Risk Breakdown Structure • Creating lessons learned • Revising risk management plan and the project management plan
May 2011
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Monitoring & Controlling Risk
193
Update Risk Documentation Inputs
• Risk identification and analysis data • Risk management results lt • Project results • Assumptions and impressions p • Interpretations and analysis • Risk register • Risk Ri k managementt plan
May 2011
Tools T l and d Techniques
Outputs
• Documentation tools •Simple reporting format •Routine project j t reports •ESI risk tools
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Monitoring & Controlling Risk
194
Update U d t Risk Ri k R Register i t • Record what worked and did not work – The original event is still identified, as well as the status of the deliverables involved, but the success, failure, or nonimplementation of the strategy is now documented data, so it becomes • Retain with the rest of the project data part of the project history
May 2011
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Monitoring & Controlling Risk
195
Benefits of Updating the Risk M Management t Pl Plan Should be done by the project team members • Provides a valuable historical reference for future projects p j ((lessons learned)) • Provides a project chronology of events for audit and other reasons • Provides a communications mechanism
May 2011
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Monitoring & Controlling Risk
196
U d t Ri Update Risk k Documentation D t ti Output O t t Inputs
• Risk identification and analysis data • Risk management results • Project results • Assumptions and more impressions • Interpretations and analysis
May 2011
Tools T l and d Techniques
• Simple reporting formats • Routine project reports • ESI risk tools
www.pmhouse.org
Outputs
• Updated risk register • Updated risk management plan • Updated project management plan l andd other th documents
RMP-PMI
Monitoring & Controlling Risk
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1 Plan Risk Management 1. Inputs • Project scope statement • Cost mgmt plan. g plan. p • Schedule mgmt • Comm. mgmt plan. • EEF & OPA
Techniques Pl i ti l i • Planning meetings & analysis
Outputs • Risk Management Plan
May 2011
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Monitoring & Controlling Risk
198
Risk Identification Inputs •Risk Management Plan •Stakeholder register •Activity cost/duration estimates •Cost/Schedule/Quality / /Q y mgmt g p plans •Scope baseline •Project documents + EEF & OPA.
Techniques • Documentation Reviews • Assumptions analysis • Diagramming techniques • SWOT analysis • Checklists analysis • Info gathering techniques • Expert Judgment
Outputs • Risk Register (Risk Potential Response, (Risk, Response Root Cause Cause, Updated Risk Categories) May 2011
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Perform Qualitative Risk Analysis Inputs •Risk Register •Risk Management Plan •OPA (LL) •SCOPE STATEMENT
Techniques •Prob./Impact Prob./Impact ASSESSMENT •Prob./Impact MATRIX •Data Quality Assessment •Risk Categorization •Risk Urgency Assessment •Expert Judgment
Outputs • Risk Register (Updates)
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Perform Risk Quantitative Analysis Inputs p • Risk Register • Risk, Cost, Schedule mgmt plans • OPA
Techniques • Quantitative Risk analysis and Modeling techniques • Data Gathering and Representation techniques • Expert Judgment
Outputs • Risk Register (Updates)
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Plan Risk Responses I Inputs t •Risk Management Plan •Risk Register
Techniques •Strategies for +ve risks •Strategies for –ve risks •Contingent response strategies •Expert Judgment
Outputs • Risk Register (Updates) • Project Management plan & docs (Updates) • Risk-related Ri k l t d contract t t decisions d ii May 2011
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Risk Register Work Performance information Performance Reports
Risk audits Risk Reassessment Variance & Trend Analysis Technical Performance Measurement Reserve Analysis
Outputs O s
Project j Management Plan
Tools & Tech T hniques s
Inputs s
Monitor & Control Risks Risk Register g Updates Change requests Project management plan updates OPA updates Project docs updates
Status Meetings
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QUESTIONS? May 2011
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Ri k M Risk Managementt T Testt
Test #3#
May 2011
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Practice Standard for Project Risk Management
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Risk Management Professional (PMI-RMP ®) Exam Preparation
Practice Standard for Project Risk Management g
“PMI-RMP” is a certification and trademark mark of the Project Management Institute, Inc. May 2011
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Over view for Practice Standard for Project Ri k Management Risk M t ¾ Introduction ¾ Plan Risk Management ¾ Identify Risks ¾ Perform Qualitative Risk Analysis ¾ Perform Quantitative Risk Analysis p ¾ Plan Risk Responses ¾ Monitor & Control Risks 9 Purpose and Objectives for every Process 9 Critical Success Factors for every Process 9 Tools and Techniques for every Process 9 Documenting the Results of the every Process
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I t d ti Introduction ¾ 1.1 Purpose of the Practice Standard for Project Risk Management 9 provide a standard for project management practitioners 9 provide a standard that is globally applicable and consistently applied
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PLAN RISK MANAGEMENT 4.1 Purpose p and Objectives j of the Plan Risk Management g Defines the scope and objectives of the Project Risk Management process, and ensures that the risk process is fully integrated into wider project management. management 4.2 Critical Success Factors for the Plan Risk Management Process 1) Identify and address barriers to successful project risk management 2) Involve project stakeholders in project risk management 3) Comply with the organization’s objectives, policies, and practices 4.3 Tools and Techniques for f the Plan Risk Management Process 9 Planning Sessions 9 Templates 4.4 Documenting the Results of the Plan Risk Management Process 9 The results of risk management planning are documented in the risk management plan. May 2011
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IDENTIFY RISKS 5.1 Purpose p and Objectives j of the Identify y Risks Process To identify all the knowable risks to project objectives. 5.2 Critical Success Factors for the Identify Risks Process Early Identification , Iterative Identification , Emergent Identification Comprehensive Identification , Explicit Identification of Opportunities Multiple Perspectives , Risks Linked to Project Objectives , Complete Risk Statement , Ownership and Level of Detail , Objectivity 5.3 Tools and Techniques for the Identify Risks Process 9 Historical Review , Current Assessments , Creativity Techniques 5.4 Documenting the Results of the Identify Risks Process Th results The l from f the h Identify Id if Risks Ri k process should h ld be b recorded d d in i order d to capture all relevant information currently available for each identified risk in risk register. May 2011
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PERFORM QUALITATIVE RISK ANALYSIS 6.1 Purpose p and Objectives j of the Perform Qualitative Risk Analysis y To evaluates key characteristics of individual risks enabling them to be prioritized for further action. 6 2 Critical Success Factors for the Perform Qualitative Risk Analysis 6.2 Use Agreed-Upon Approach , Use Agreed-Upon Definitions of Risk Terms , Collect High-Quality Information about Risks , Perform Iterative Qualitative Risk Analysis 6.3 Tools and Techniques for the Perform Qualitative Risk Analysis ¾ Select Risk Characteristics that Define Risks Risks’ Importance ¾ Collect and Analyze Data o e Risks s s by Probability obab y a and d Impact pac o on Spec Specific c Objec Objectives es ¾ Prioritize ¾ Prioritize Risks by Probability and Impact on Overall Project ¾ Categorize Risk Causes Document the Results of the Perform Qualitative Risk Analysis May 2011
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PERFORM QUANTITATIVE RISK ANALYSIS 7.1 Purpose and Objectives of the Perform Quantitative Risk Analysis provides a numerical estimate of the overall effect of risk on the objectives of the project, based on current plans and information 7 2 Critical Success Factors for the Perform Quantitative Risk Analysis 7.2 Prior Risk Identification and Qualitative Risk Analysis , Appropriate Project g High g Q Quality y Risk Data , Unbiased Data , Model Commitment to Collecting Overall Project Risk Derived from , Individual Risks , Interrelationships Between Risks in Quantitative Risk Analysis 7.3 Tools and Techniques for the Perform Quantitative Risk Analysis Comprehensive Risk Representation , Risk Impact Calculation , Quantitative Method Appropriate to Analyzing Uncertainty , Data Gathering Tools , Effective Presentation of Quantitative Analysis Results , Iterative Quantitative y , Information for Response p Planning g Risk Analysis 7.4 Documenting the Results of the Perform Quantitative Risk Analysis May 2011
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PLAN RISK RESPONSES 8.1 Purpose and Objectives of the Plan Risk Responses Process To determine the set of actions which most enhance the chances of project success while complying with applicable organizational and project constraints 8 2 Critical Success Factors for the Plan Risk Responses Process 8.2 Communicate , Clearly Define Risk-Related Roles and Responsibilities , p y Timing g of Risk Responses p , Provide Resources,, Budget, g , and Schedule Specify for Responses , Address the Interaction of Risks and Responses , Ensure Appropriate, Timely, Effective, and Agreed-Upon Responses , Address Both Threats and Opportunities , Develop Strategies before Tactical Responses 8.3 Risk Response Strategies 8 4Tools and Techniques for the Plan Risk Responses Process 8.4Tools Response Identification , Response Selection , Action Planning , p and Responsibility p y Assignment g Ownership 8.5 Documenting the Results of the Plan Risk Responses Process May 2011
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MONITOR AND CONTROL RISKS 9.1 Purpose and Objectives of the Monitor and Control Risks Process To track identified risks, monitor residual risks, identify new risks, ensure that risk response plans are executed at the appropriate time, and evaluate their effectiveness throughout the project life cycle. cycle 9.2 Critical Success Factors for the Monitor and Control Risks Process g Risk Monitoring g and Control with Project j Monitoring g and Control , Integrate Continuously Monitor Risk Trigger Conditions , Maintain Risk Awareness 9.3 Tools and Techniques for the Monitor and Control Risks Process Managing Contingency Reserves , Tracking Trigger Conditions , Tracking Overall Risk , Tracking Compliance 9 4 Documenting the Results of the Monitor and Control Risks Process 9.4 The final control action of risk monitoring and controlling is to record actual data for future use May 2011
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QUESTIONS? May 2011
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Risk Management Professional (PMI-RMP ®) Exam Preparation
Examination Specification
“PMI-RMP” is a certification and trademark mark of the Project Management Institute, Inc. May 2011
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O Over view i ffor Examination E i ti S Specification ifi ti Examination Blueprint Domains, Tasks, and Knowledge and Skill Statements Performance Domain I: Risk Communication Performance Domain II: Risk Analysis Performance Domain III: Risk Response Planning Performance Domain IV: Risk Governance
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E Examination i ti Blueprint Bl i t The exam consists of 170 questions in 3.5 hours based on the following domains: • Risk Communication 27% • Risk Analysis 30% • Risk Response Planning 26% • Risk Governance 17%
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Domains, Tasks, and Knowledge and Skill St t Statements t This section of the report contains the domains, tasks, and knowledge and skill statements as defined by the role delineation panels. Domains: I. Risk Communication II. Risk Analysis III. Risk Response Planning IV. Risk Governance
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Domain I: Ri k C Risk Communication i ti Task 1 Lead the risk management function by applying interpersonal Task 2 Gather relevant information using human and automated sources in order to assess and communicate the sensitivity of the stakeholder to risk. Task 3 Document risk-related information using standard tools and techniques in order to establish and maintain a common understanding of the risks. Task 4 Create regular status reports using performance metrics as specified in the h risk i k management plan l iin order d to update d the h stakeholders. k h ld
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Domain II: Ri k A Risk Analysis l i Task 1 Identify all relevant risks (positive and negative) using human and automated sources in order to scope the potential impact(s) of these risks Task 2 Evaluate the attributes of the identified risks using qualitative and quantitative tools and techniques in order to establish a uniform context f the for th risk i k response process. Task 3 Prioritize the evaluated risks based on collected stakeholder sensitivity in order to facilitate decision and action. Task 4 Establish control limits by completing a risk tolerance assessment in order to influence risk response and monitor trends.
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Domain III: Ri k Response Risk R Planning Pl i Task 1 Develop a risk (positive and negative) response strategy from the policy, and information gathered during risk analysis in order to ensure timely and defined action when required. Task 2 Develop a contingency approach using the response strategy and prepare p for the occurrence of relevant scenarios in order to p anticipated risks and unanticipated events. T k 3 Present Task P t recommendations d ti t key to k stakeholders t k h ld b based d on risk i k response, values and other influences in order to obtain authorization for response plan execution.
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Domain IV: Ri k G Risk Governance Task 1 Capture lessons learned by formal and informal means in order to i incorporate t th them iinto t ffuture t risk i k planning. l i Task 2 Refine risk policies and practices using lessons learned in order to p risk management g effectiveness. improve Task 3 Create the risk management plan using relevant policies and standards in order to direct risk management activities. T k 4 Establish Task E t bli h metrics t i ffor risk i k managementt processes b by d defining fi i baselines in order to evaluate performance. process p performance using g established metrics and Task 5 Examine p standard tools in order to drive risk process improvements. Task 6 Monitor risk performance using the risk response plan in order to initiate corrective actions actions. Task 7 Identify relevant policies and standards using internal and external sources in order to integrate the applicable elements into the risk managt. plan. May 2011
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Ri k M Risk Managementt T Testt
Test #4#
May 2011
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