21-Risk Management - Project Management Risk Management Dr...

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Hesham A. Aziz 1 Project Management Risk Management Dr. Hesham A. Aziz
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Hesham A. Aziz 2 A risk is an event that may or may not happen. If it does happen, it will have unwanted consequences and will result in losses. Risk: Uncertain or chance events that planning can not overcome or control.
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Hesham A. Aziz 3 Project Management Framework Project Management Framework
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Hesham A. Aziz 4 Understanding Risk Risk is defined as an uncertainty which will impact the project This impact may be positive or negative Positive risk is called opportunity, or windfall (if unanticipated) Negative risk is called threat Risk Management is simply identifying, analysing, quantifying and prioritizing possible risk events and responding to them in accordance with a risk management strategy or plan
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Hesham A. Aziz 5 Risk Management A proactive attempt to recognize and manage internal events and external threats that affect the likelihood of a project’s success. What can go wrong (risk event). How to minimize the risk event’s impact (consequences). What can be done before an event occurs (anticipation). What to do when an event occurs (contingency plans).
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Hesham A. Aziz 6 The Risk Event Graph
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Hesham A. Aziz 7 Risk Management’s Benefits A proactive rather than reactive approach. Reduces surprises and negative consequences. Prepares the project manager to take advantage of appropriate risks. Provides better control over the future. Improves chances of reaching project performance objectives within budget and on time.
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Hesham A. Aziz 8 What Risk Management Does What Risk Management Does Identify potential problems and confront them when it is cheaper and easier to do so, before there are problems and before a crisis blows up. Focus on the project’s goals and consciously look for things that may affect quality throughout the project lifecycle. Identify potential problems early in the planning cycle (the proactive approach) and provide input into management decisions regarding resource allocation. Involve personnel at all levels of the project, focus their attention on a shared project (or product) vision, and provide a mechanism for achieving it. Increase the overall chances of project success.
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Hesham A. Aziz 9 Business Risks Market acceptance: Will the customer buy the product? Time to market: Can you get the product out there before anyone else does? Incompatible product fit: It’s a great product, but no one can afford it. Difficult to sell : It’s a high-ticket item or doesn’t offer enough incentive to sell. Loss of support from the higher-ups : If a new manager is brought on board at a higher level, your project could lose support and funding.
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Hesham A. Aziz 10 Common Project Risks Common Project Risks Funding: Will you get enough money to fund your project’s needs?
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