The document discusses project risk management and outlines six processes for managing risk: risk management planning, risk identification, qualitative risk analysis, quantitative risk analysis, risk response planning, and risk monitoring and control. It provides details on tools and techniques used in each process, such as documentation reviews, information gathering, probability and impact matrices, and quantitative risk analysis modeling. The overall goal of risk management is to increase the probability of positive events and decrease the probability of negative events on a project.

1. Risk Management

2. Project Risk Management
• The processes of conducting risk management
planning, identification, analysis, response planning and
monitoring and control on a project
• Objectives are to increase the probability and impact of
positive events and decrease the probability and impact of
negative events In the project

3. To manage risk we use the six risk management processes
Risk Management Planning
Risk Identification
Qualitative Risk Analysis
Quantitative Risk Analysis
Risk Response Planning
Risk Monitoring and Control

4. • To manage risk we use the six risk management processes
– Risk Management Planning
– Risk Identification
– Qualitative Risk Analysis
– Quantitative Risk Analysis
– Risk Response Planning
– Risk Monitoring and Control
Risk
Management
Planning
Risk
Identificatio
n
Qualitative
Risk
Analysis
Quantitative
Risk
Analysis
Risk
Response
Planning
Risk
Monitoring
and Control

5. Enterprise
Environmental
Factors
Inputs
Tools & Techniques
 Planning Meetings and
Analysis
Organizational
Process
Assets
Project Scope
Statement
Outputs
Risk
Management
Plan
Project
Management
Plan
Risk
Management
Planning
Risk
Identification
Qualitative
Risk Analysis
Quantitative
Risk
Analysis
Risk
Response
Planning
Risk
Monitoring
and Control

6. •
•
•
•
•
Methodology – Approach, tools, & data
Roles & Responsibilities
Budgeting – Resources to be put into risk management
Timing – When and how often
Risk Categories – Risk Breakdown Structure (RBS)
• Definitions – Risk probabilities and impact

7. Project
Technical
Organizational
Project
Management
Limited Design
Time
Funding
Estimates
Specifications
Adherence
Prioritization
Scheduling
Resource
Availability
Communication

8. Risk Identification
Inputs
Enterprise
Environmental Factors
Tools & Techniques
 Documentation Reviews
 Information Gathering
Techniques
Organizational
Process Assets
Outputs
Risk
Register
 Checklist Analysis
Project Scope
Statement
 Assumption analysis
 Diagramming techniques
Risk Management
Plan
Project
Management Plan
Risk
Management
Planning
Risk
Identification
Qualitative
Risk Analysis
Quantitative
Risk
Analysis
Risk
Response
Planning
Risk
Monitoring
and Control

9. Information Gathering Techniques
•Successive anonymous questionnaires on project risks with
responses summarized for further analysis

10. Qualitative Risk Analysis
Inputs
Organizational
Process Assets
Tools & Techniques
 Risk probability and impact
statement
Project Scope
Statement
 Probability and impact matrix
Outputs
 Risk data quality assessment
Risk
Management
Plan
)
 Risk categorization
 Risk urgency assessment
Risk Register
Risk
Management
Planning
Risk
Identificatio
n
Qualitative
Risk Analysis
Quantitative
Risk
Analysis
Risk
Response
Planning
Risk
Monitoring
and Control

11. Consequen
ce
Extreme
High
Moderate
Low
Negligible
Health and Safety
Fatality or multiple fatalities
expected
Severe injury or disability likely;
or some potential for fatality
Lost time or injury likely; or
some potential for serious
injuries; or small risk of
fatality
Likelihood Class
Not Likely (NL)
Low (L)
<0.01% chance of
occurrence
0.01 - 0.1% chance of
occurrence
Moderate (M)
0.1 - 1% chance of
occurrence
High (H)
1 - 10% chance of
occurrence
First aid required; or small risk
of serious injury
No concern
Likelihood of Occurrence
(events/year)
Expected (E)
>10% chance of
occurrence

12. Rate each risk on
scales then plot on
matrix
Develop mitigation
technique for risks
above tolerance

13. Risk Register Update
• Add
– Probability and Impact Matrix results
– Perform quality check on results
– Categorize the risks to make them easier to handle
– Perform urgency assessment to determine which
risk need immediate attention

15. Quantitative Risk Analysis
Inputs
 Data gathering
 Quantitative risk analysis
and modeling
Outputs
)
Risk
Manageme
nt Planning
Risk
Identification
Qualitative
Risk Analysis
Quantitative
Risk
Analysis
Risk
Response
Planning
Risk
Monitoring
and Control

16. • Analyze numerically the probability and
consequence of each risk
• Monte Carlo analysis popular
• Decision Tree analysis on test
– Diagram that describes a decision and
probabilities associated with the choices
• Expected Monetary Value Analysis (EMV)

17. )
–
–
–
–
Avoid
Transfer
Mitigate
Acceptance
–
–
–
–
Exploit
Share
Enhance
Acceptance