Project Risk Management. Kartika Chandra Hotel Suite 611 Jakarta Ph. 5264089 Fx. 5264088 Email:...

Project Risk Management

Kartika Chandra Hotel Suite 611 Jakarta Ph. 5264089 Fx. 5264088 Email: [email protected] Http://www.mylearnit.com

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Project Risk Management Processes

Risk Management Planning : deciding how to approach and plan the risk management activities for a project

Risk Identification : determining which risks might effect the project and documenting their characteristics

Qualitative Risk Analysis : performing a qualitative analysis of risks and condition to prioritize their effect for project objectives

Quantitative Risk Analysis : measuring the probability and consequences of risks and estimating their implications for project objectives

Risk Response Planning : developing procedures and techniques to enhance opportunities and reduce threats to the project objectives

Risk Monitoring and Control : monitoring residual risks, identifying new risks, executing risk reduction plans, and evaluating their effectiveness throughout the project life cylce.


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Risk management must be done during the whole life of the project

All risks have a probability > 0 and < 100% A risk event that has a probability = 100% is not

a risk


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Risk Tolerance

Risks that may not be considered as important to the project are :

Risks that have very high probabilities and very low impacts, and

Risks that have very low probabilities and very high impacts

Risks we need to worry about are those that have a reasonably high probability and high impact


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Steps in risk management Practices

R isk M anagem ent

R isk A ssessm ent

R isk C ontro l

R isk Identifica tion

R isk A na lysis

R isk E xposure

R isk R eduction

C ontingency P lann ing

R isk M onito ring

C ontinuous R eassessm ent

R isk P rio ritiza tion


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Idetifikasi Resiko

Penilaian Resiko

Menyusun Respons

Mengendalikan Respons Resiko

Analisis Proyek untuk mengidentifikasi sumber resiko

Menilai resiko dalam hal : - Tingkat keparahan dampak - Kemungkinan terjadi - Kemampuannya untuk dapat di kontrol

Mengembangkan strategi untuk mengurangi kerusakan yang mungkin terjadiMenyusun rencana kontingensi

Implementasi strategi resikoMemonitor dan menyesuaikan rencana untuk resiko baruManajemen perubahan

Resiko diketahui

Penilaian resiko

Rencana Manajemen Resiko

Resiko baru

Resiko baru

Resiko baru

PR

OS

ES

MA

NA

JEM

EN

RE

SIK

O


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Risk Assessment & Control

Risk Assessmento Identification – what are the risks? Make a list!

(Or borrow one for ideas)o Analysis – assess risk likelihood and impact; find possible

alternativeso Prioritization – which risks to focus on? Sort risks by impact

Risk Controlo Management planning – mitigation planning, ensure consistency

among planso Resolution – actively manage and resolve each risk when it

occurso Monitoring – track progress toward risk resolution; and identify

new risks


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How to Identify Risks

Start with a typical list of software risks Review development plan

Critical Paths Critical Staff Members Critical Vendor Deliveries Critical Milestones

Review Requirements Review Technical Design Review Past Projects


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How to Identify Risks (Continued)

Conduct Risk Brainstorming Sessions with Staff, Users, Vendors, Customers, and Management Try to assess the direction of thinking by third parties as

they may give an indication of future requirements, expectations, or vendor changes.

If your dependent on vendors, try to understand their business situation.

Get as much input as possible!


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Risks Identification Techniques

Documentation reviewsBrainstormingDelphi techniqueNominal group techniqueCrawford slipExpert interviewsAnalogy


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Documentation review

Reviewing lessons learned and risk management plans from previous projects

Reviewing WBS, contract obligations, project baseline for scope, schedule and budget, resource avaibilities, staffing plans, suppliers


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Brainstorming

Meeting is called to make a comprehensive list of risks

participants : 10 to 15 The meeting < 2 hours Participants can name risks No discussion Another participants give new ideas for

possible risks


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Delphi Technique

Similar to brainstorming but the participants do not know one another (anonymous)

useful if the participants are some distance away (particularly using email)

Process : Facilitator distributes quesionnaire to the

participants to submit risk ideas Facilitator catagorize and clarify the responses,

then circulate to the participant for comments or addition


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Nominal Group Technique

The facilitator instructs each of the participants to privately and silently list his or her idea on a piece of paper

The facilitator takes each piece of paper and lists the ideas on a flip chart or blackboard, then make discussion

Now ranks the ideas in order of importance, again in secret

This technique is faster and require less effort of the facilitator than Delphi Tech.


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Crawford Slip

It does not require as strong a facilitator as the other techniques

It produces ideas very quickly < 1/2 hour Process :

The facilitator asks question The participants write down the answer After one minute, the facilitator ask the same

question and the participants have to make different answer

This is repeated 10 times


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Analysis, Exposure, & Prioritization

For Each Risk: Determine Probability of Occurrence

What is the likelyhood of occurrence? Determine Impact

What is the impact if it occurres? Determine Exposure

What will we lose if the risk occurs?

For All Risks: Prioritize

Where should we put our limited resources?


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Analysis, Exposure, Prioritization: How?

Various Techniques Available But Key is Experience Individual Organizational

Don’t Rely on Just Yourself - Get lots of Inputs


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Risk Assessment: A Simple Classification & Tracking Method

Probability of Occurrence vs Impact 1 to 5 Scale

Priorities Red - High Yellow - Med Green - Low

Review/Present Chart Periodically

R isk #1

R isk #4

R isk #2R isk #3

R isk #5

Probability o f O ccurrance

Imp

act

H igher P robab ilityLow er P robab ility

Hig

her

Impa

ctLo

wer

Impa

ct


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Risk Assessment: Probability Methods

Can we quantitize the risk? For Each Risk:

For Each Possible Action: Estimate Probability of an Given Outcome P(O) Estimate $ Loss of an Given Outcome L(O) Multiply the P(O) by L(O) to give $ exposure for the unwanted

outcome Sum all $ exposures for each Possible Action Compare the $ exposures Calculate Risk Leverage

(Risk Exposure Before Reduction - Risk Exposure After Reduction) / (Cost of Risk Reduction)


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Example Risk Assessment Using Probability Method

DoRegression

Testing?

NoDon't Find Critical Fault

P(O) = 0.55

Find Critical FaultP(O) = 0.25

No Critical FaultP(O) = 0.20

L(O) = $0.5M

L(O) = $30M

L(O) = $0.5M

$0.125M

$16.50M

$0.10M

$16.75M

Don't Find Critical FaultP(O) = 0.05

Find Critical FaultP(O) = 0.75

No Critical FaultP(O) = 0.20

L(O) = $0.5M

L(O) = $30M

L(O) = $0.5M

$0.375M

$1.5M

$0.10M

$1.975MYes

RISKEXPOSURE COMBINED

RISKEXPOSURE

RISK LEVERAGE -> $14.775M


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Risk Assessment Matrix

Systemfreezing

Low High High Startup

Userbacklash

High Medium MediumPost

installation

Hadwaremalfunctioning

Medium High High Installation

Risk eventChance-

LMHSeverity-

LMH

Detectiondifficulty-

LMH When


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Top 10 Risks

Personnel Shortfalls Staffing with Top Talent Job Matching Team Building Morale Building Cross-Training Pre-scheduling Key People

Software Risk Management: Principles and Practices, B.W. Boehm, IEEE Software, Jan., 1991, pg. 32-41


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Unrealistic Schedules and Budgets and/or Underestimating Problem Complexity Detailed multisource cost and schedule estimation Design to Cost Incremental Development Software Reuse Requirements Scrubbing

Top 10 Risks


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Developing the Wrong Software Functions Domain Analysis

(Organizational Analysis/Mission Analysis) Operational Concept Formulation User Surveys Prototyping Early User Manuals

Top 10 Risks


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Developing the Wrong User Interface Prototyping Scenerios Task Analysis

Gold Plating Requirements Scrubbing Prototyping Cost-Benefit Analysis Design to Cost

Top 10 Risks


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Continuing Stream of Requirements High Change Threshold Information Hiding Incremental Development

(defer changes to later increments)

Top 10 Risks


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Shortfalls in Externally Performed Tasks Reference Checking Pre-award Audits Award-fee Contracts Competitive design or prototyping Team Building

Top 10 Risks


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Shortfalls in Externally Furnished Components Benchmarking Inspections Reference Checking Compatability Analysis Examples:

Compilers Development Environments Target Hardware

Top 10 Risks


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Real-Time Performance Shortfalls Simulation Benchmarking Modeling Prototyping Instrumentation Tuning Performance Parameter Allocations

Top 10 Risks


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Straining Computer Science Capabilities or Introduction of New Technology to an Organization Technical Analysis Cost-Benefit Analysis Prototyping Reference Checking Staff Training Example:

Use of a new language, tool, or method

Top 10 Risks


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Risk Control

Risk Reduction Contingency Planning Monitoring

Risks ResponsePlanning


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Risk Reduction

Avoiding Risk : Avoid the risk completely Modifying project requirements

Transferring the Risk : Move the impact of the risk to some other party, sharing risk By allocation to other systems, Buying Insurance to

cover financial loses, Subcontracting Mitigating the Risk : reduce the probability or impact of

the risk adding additional tests, hiring duplicate suppliers,

adding more expert personnel, designing prototypes performance bond, guarantees


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Contingency Planning

Some risks cannot be reduced Plan for risk occurrence Why?

Reduces “Crisis” atmosphere Reduces chance of mistakes Reduces time to correct


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Perencanaan Kontingensi

Rencana Kontingensi adalah sebuah rencana alternatif yang akan digunakan jika suatu peristiwa resiko yang diperkirakan belum menjadi kenyataan.

Mencegah penundaan keputusan, kepanikan, dan pengambilan keputusan di bawah tekanan.


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Matriks Respons Resiko

Resiko Kemungkinan Kontingensi Pemicu Tanggung Jwb

Antar muka Mengurangi Work around smp bantuan datang

Tdk diselesaikan dlm 24 jam

---

Syst. freezing Mengurangi Instal ulang OS

Frozen setelah 1 jam

Emmy

Keluhan user Mengurangi Meningkatkan dukungan staf

Panggilan dari top manajemen

Eddie

Malfungsi alat Dipindahkan Memesan merk lain

Penggantian tdk bekerja

Jim


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Monitoring

Periodic Review of Risk Status Changes in Probabilities or Impacts Changes in Avoidance/Mitigation/Contingency Plans

Periodic Review of Project to Identify New Risks Implementation of Risk Avoidance or Mitigation

Plans Keep Management and Customers Informed!!!

Frequent Risk Reviews


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Responses to Risk Matrix

Risk eventAccept, reduce,share, transfer

Contingencyplan Trigger

Systemfreezing

Reduce Reinstall OSStill frozenafter 1 hour

Userbacklash

ReduceIncrease staff

supportCall from topmanagement

Hadwaremalfunctioning

TransferOrder different

brandReplacementdoesn't work

Project Risk Management. Kartika Chandra Hotel Suite 611 Jakarta Ph. 5264089 Fx. 5264088 Email:...

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