PMPGuru

Project Risks Management

Guruttam Creative Assets

Sample illustration.

Project risks

'Likely future events that create imbalance to project outcome are better managed or negotiated.'-Guruttam. Risks are perception that become a reality when it occurs. Most often, risks exists across life cycle of the project. For investors, return on investment is a risks, for owners, seller delivery committment is a risk, for a seller payment receivables are risks, for a project environment can be a risks, for a manager, resource non performance is a risks etc. At higher level risks may be managed by these key factors -
+) Capability analysis
+) Credibility analysis
+) Feasibility study
+) Quality analysis
+) Environment analysis
+) Continuous reviews

Management of risks usually include organizing, qualifying or quantifying it in terms of effect, action that counter or enhance effect.

Project risks may be additionally managed by
+) manual and automation processes
+) manual and automation, simulation
+) observations and assessments
+) tolerance, ranking, priority
+) threat or opportunities
+) supportive response plans
+) audits, reviews - variance analysis

Project risks examples
• Assumptions, communication gaps
• Failure to inspect, comply
• Failures in handling expected load capacity
• Single or annual loss expectancy
• Misinterpretation of contract terms
• Dishonouring contract agreements

Some of commonly used tools are
• Group thinking, Reviews
• Statistical analysis
• Reserve analysis
• Communication
• Planning tools, Performance indicators
• Failure mode effect analysis, fault tree analysis
• Probability x Impact matrix or statement
• Responses - Transfer, Mitigate, Enhance etc

Question and Answer

1. Agreement or contract is an example of
• Risks transfer
• Risks mitigation
• Risks response
• Risks concessions

2. You get same duration for scope of work from engineers. Whose estimate you are likely to choose when both are ably qualified and personally known?
• Choose the one which you receive early
• Choose the one which you receive last
• Choose the one who offered lunch recently
• Choose the one that has less variance in arrival of estimates

Answer
1. Risks transfer
2. Choose the one that has less variance in arrival of estimates