Understand benefits of risk management in making projects successful.

1. Risk Management Primer
David Lipien
12.19.2012

2. Objectives
1. Understand benefits of risk management in making projects successful.
2. Walk through the risk planning process.
3. Demonstrate a qualitative process and tools for using project team resources in
successful risk planning.
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3. Risks and Unknowns
Former United States Secretary of Defense Donald
Rumsfeld 2003
“… because as we know, there are known knowns; there are things we know
we know," "We also know there are known unknowns; that is to say we know
there are some things we do not know. But there are also unknown
unknowns -- the ones we don't know we don't know…”
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4. Risk Planning
Most decisions are made without complete information.
Risk Opportunity
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5. Risk Planning
What is a Risk and how does it differ from an Issue?
Risk (Proactive) – An uncertain event or condition that, if it occurs, has a positive
or negative effect on a project’s objective. Risk identification is an ongoing
proactive process that starts early in the program and continues throughout the
lifecycle. For each risk identified, there should be a mitigation strategy.
Issue (Reactive) – A question or dispute regarding a task or activity that must be
resolved in order for the project/program to proceed as planned. Teams
regularly document and track each issue by assigning responsibility and a
timeframe for resolution to a team member.
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6. Risk Planning Definitions
What is Risk Management?
Definition: Risk Management is the act or practice of anticipating and addressing risks before
they occur.
It is the process used to identify, evaluate, respond and control risks throughout the life of a
project. This process is iterative and proactive for the life of the project.
What is Project Risk?
Definition: Measure of potential inability to achieve project objectives and their probable
consequences within the project constraints.
Components:
Risk Events: Specific, analyzable, quantifiable risk occurrences that might happen to the
detriment of a project. 6

7. Risk Planning
Why and When
To avoid landmines, make good decisions, and be successful…
Early and often…
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8. Risk Planning
Micro level Risk Management
Identify
Control Communicate Evaluate
Develop Response
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9. Risk Planning - Identify
Customers, Team Members, Organizations, Availability and
people Talent Experience
Requirements, Time/Schedule, Cost- Estimation/ Control,
process Revenues/Expenses, Budget, Legal / Regulatory,
Management Project size/scope and Procurement
Change, Newness, Adoption / Use, Integration / Interfaces,
technology Security, Architecture and Scalability
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10. Risk Planning - Evaluate
1. Analysis to determine risk event likelihood, impacts,
sensitivity and relationships.
2. Visibility to priority of potential risk events.
3. Apply appropriate resources at the right time.
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11. Risk Planning - Evaluate
Very Likely
HPLI HPHI
MED HIGH
PROBABILITY
OF
OCCURRENCE
Not Likely
(uncertainty)
LOW MED
LPLI LPHI
Little Big
IMPACT
(severity of consequence)
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12. Risk Planning – Response
1. Eliminate.
2. Reduce likelihood.
3. Reduce impact.
4. Accept.
5. Transfer.
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13. Risk Planning – Control
1. Important to document risk tracking in the risk log.
2. Risk is clearly defined.
3. Risk is correctly categorized.
4. Risk has the appropriate mitigation and priority.
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14. Risk Planning – Conclusions
1. Continuous part of delivery management.
2. Project uncertainties should be reduced.
3. Risks are identified and evaluated; risk responses are developed; and
risks are controlled.
4. Risks are classified based on the probability of occurrence and impact
to the project.
5. Risks are mitigated appropriately.
6. Risk mitigation strategies must be integrated into plans, schedules,
budget, etc.
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