RISK MANAGEMENT PRESENTATION
ASQ- GREATER HOUSTON SECTION 1405
Lila Carden, Ph.D., MBA, PMP
University of Houston
Instructional Associate Professor
lcarden@uh.edu
Agenda
ISO 31000 - Published in November 2009
 Benefits of Risk Management
 21 Ways to Excel at Project Management
 Risk Management Processes
 Risk Management Application
 Top 10 Risk Issues
 10 Golden Rules of Project Risk Management

ISO 31000
Published in November 2009
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
First international standard of risk management
Provides principles and generic guidelines on risk
management
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Plans will still need to include the needs of a specific
organization
Standard that can be used by any public, private or
community enterprise, association, group or individual
Not industry specific
 Useful for all managers – operational, financial and project

Gjerdrum, D. (2013). The new ERM gold standard: ISO 31000:2009. Retrieved from
http://www.riskandinsurance.com/story.jsp?storyId=322335271
ISO 31000
Published in November 2009

Framework to integrate the process of managing risks
and reporting
 Risk
management processes include identifying,
analyzing, responding, implementing and monitoring
risks.
 Two key functions throughout implementation
Communication and consultation need to include internal and
external stakeholders
 Monitor and review need to include controls, lessons learned,
responses to risks and ready for change

Gjerdrum, D. (2013). The new ERM gold standard: ISO 31000:2009. Retrieved from
http://www.riskandinsurance.com/story.jsp?storyId=322335271
Benefits of Risk Management

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Establishes project feasibility
Lowers costs – rework and unforeseen late efforts are reduced
Establishes project priority and management support - risk
plan noting competence and preparation
Enables project portfolio management – low risk and high
risk projects
Exposes weakness in project plans
Plans management reserves
Facilitates project communication and monitoring –
exposes weaknesses to the team
Kendrick. T. (2009). Identifying and managing project risk. New York: AMACOM.
21 Ways to Excel at Project
Management
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Managing the risks is number 6 on the list
Top 5 include
 Sponsorship and Leadership
 Defining the business objectives
 Defining the project
 Ensuring the project is a manageable size
 Defining the budget
Haughey, D. ( 2013). 21 ways to excel at project management. Retrieved from
http://www.projectsmart.com/
Risk Management Processes
7

PMBOK’s project risk management processes include:
 Plan Risk Management – how to conduct risk management
activities
 Identify Risks – determine risks and document characteristics
 Perform Qualitative Risk Analysis
 Perform Quantitative Risk Analysis
 Plan Risk Responses
 Control Risks
PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.).
Newtown Square, Pennsylvania: Project Management Institute, Inc.
Plan Risk Management
TABLE OF CONTENTS

1.0
Purpose Of The Risk Management Plan

2.0
RISK MANAGEMENT PROCEDURE
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2.1
Process
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2.2
ROLES AND RESPONSIBILITIES

2.3
Risk Identification

2.3.1
Methods for Risk Identification

2.4
Risk Analysis

2.4.1
Qualitative Risk Analysis

2.4.2
Quantitative Risk Analysis

2.5
Risk Response Planning
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2.6
Risk Monitoring, Controlling, And Reporting

2.7
Risk Contingency Budgeting
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3.0
TOOLS AND PRACTICES
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4.0
CLOSING A RISK
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5.0
LESSONS LEARNED
Identify Risks
9
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Techniques
 Brainstorming
 Interviewing
 Root Cause Analysis
 Delphi Technique – way to reach consensus of experts
 Facilitator uses a questionnaire to obtain ideas
 The responses are summarized then re-circulated to
the experts for additional comments
Risk Breakdown Structure – structure for identifying risk
PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.).
Newtown Square, Pennsylvania: Project Management Institute, Inc.
10
Identify Risk
Risk Breakdown Structure
Perform Qualitative Risk Analysis
11

Tool
 Risk
Priority Matrix - probability and impact
Perform Quantitative Risk Analysis
12
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Tools and techniques
 Sensitivity Analysis – tornado diagram (useful for comparing
importance and impact of variables)
 Expected Monetary Value Analysis – decision tree


http://goo.gl/DXSglV
Modeling and Simulation – translates uncertainties to impact of project
objectives
 Monte Carlo
 The model is computed many times with the input variables (cost
estimates, durations) chosen at random for each iteration from the
probability distributions of these variables.
 A probability distribution (total cost or completion date) is
calculated  Example - 12% likely to meet the $41 million most likely
cost estimate or a 70% likelihood of success with a budget of
$50 million
PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.).
Newtown Square, Pennsylvania: Project Management Institute, Inc.
Plan Risk Responses

Negative risks
 Avoid – change plan to eliminate threat entirely or
shut down project entirely
 Transfer – shifts risk to third party (consultant)
 Mitigate – reduce probability or impact
 Develop prototype
 Accept – not take any action
 Contingency Reserve – time, money or resources
PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.).
Newtown Square, Pennsylvania: Project Management Institute, Inc.
Plan Risk Responses

Positive Risks
 Exploit – ensure opportunity is realized
 Most talented resources
 Enhance – increase the probably and/or impact
 Adding more resources
 Share – allocating all or some of the ownership of the
opportunity
 Joint ventures, partnerships
 Accept – take advantage of the opportunity if realized
PMI Global Standard. (2013). A guide to the project management body of knowledge
(5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.
Control Risk Responses

Use Risk Register to
 Implement risk response plans
 Track identified risks
 Identify new risks
 Evaluate risk process effectiveness throughout the
project – risk audits including project review meetings
 Deliverable status
 Schedule progress
 Costs
PMI Global Standard. (2013). A guide to the project management body of knowledge ((5th ed.).
Newtown Square, Pennsylvania: Project Management Institute, Inc.
Application – Risk Overview Example
16

http://capstone.tamu.edu/Teams/Spring%20%2708/VE
G/deliverables/VEG_RiskAssessment.pdf
 http://goo.gl/6clVE5
Top 10 Risk Issues
Dr. Dieter Fink
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1. Understanding the risk concept
2. Agreeing on what is project risk
3. Recognizing risk events
4. Determining the risk management approach
5. Determining the risk tolerance
6. Preparing the risk management plan
7. Developing organizational risk processes
8. Estimating risk severity
9. Preparing the risk breakdown structure
10. Creating and updating the risk register
Fink, D. (2011). Trends: Key Issues in Project Risk Management. TPM (February/March). Retrieved from
http://www.jkr.gov.my/prokom/images/stories/pdf/RM/trends.pdf
10 Golden Rules of Project Risk Management
Bart Jutte
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1. Make risk management part of your project
2. Identify risks early in your project
3. Communicate about risks
4. Consider both threats and opportunities
5. Clarify ownership of issues
6. Prioritize risks
7. Analyze risks
8. Plan and implement risk responses
9. Register project risks
10. Track risks and associated tasks
Jutte, B. (2010). 10 golden rules of project risk management . Retrieved from
http://www.projectsmart.com/articles/10-golden-rules-of-project-risk-management.php
Intaver Institute
RiskyProject 5

http://intaver.com/index-tutorial4.html
References
•
Fink, D. (2011). Trends: Key Issues in Project Risk Management. TPM
(February/March). Retrieved from
http://www.jkr.gov.my/prokom/images/stories/pdf/RM/trends.pdf
•
Gjerdrum, D. (2013). The new ERM gold standard: ISO 31000:2009.
Retrieved from
http://www.riskandinsurance.com/story.jsp?storyId=322335271
•
Haughey, D. ( 2013). 21 ways to excel at project management. Retrieved
http://www.projectsmart.com/
•
Jutte, B. (2010). 10 golden rules of project risk management . Retrieved from
http://www.projectsmart.com/articles/10-golden-rules-of-project-riskmanagement.php
•
Kendrick. T. (2009). Identifying and managing project risk. New York:
AMACOM.
•
PMI Global Standard. (2013). A guide to the project management body of
knowledge (5th ed.). Newtown Square, Pennsylvania: Project
Management Institute, Inc.
from