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Risk Analysis and Response

Risk Analysis and Response. Team B Erica Toliver, Matthew McKinnis, Natalie Levitsky , Nicole Seibert, Rachel Black, Ronald Sander CPMGT/302 – Procurement and Risk Management September 23, 2013 James Kaczynski. Potential Risk Analysis. 1. Personal Risks: Pressure

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Risk Analysis and Response

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  1. Risk Analysis and Response Team B Erica Toliver, Matthew McKinnis, Natalie Levitsky, Nicole Seibert, Rachel Black, Ronald Sander CPMGT/302 – Procurement and Risk Management September 23, 2013 James Kaczynski

  2. Potential Risk Analysis 1. Personal Risks: • Pressure • Time away from family • Lack of Control • Satisfaction Text 2. Business Risks: • Unpredictability • Ineffective • Management • Financial Loss • Beneficial strategically • Beneficial profit wise

  3. Potential Risk Analysis 3. Competitive Risks: • New Markets • Aggressive Rivals • New Culture 4. External Risks: • Legislation • Environment • Competition • Political

  4. Risk Response Planning • Risk Reassessments • All risks will be properly tracked and reviewed to determine when and if a risk can be closed. • Risk Audits • Project managers will be performing bi-weekly audits on all identified risks, with the objective of determining the root cause of each risk. • Status Meetings • Weekly project status meetings will be conducted by the project manager. Risk management will be a standing agenda item.

  5. Risk Project Log Category Description Probability Impact Total Risk Impact Owner Status Status Trigger/Action Plan Business Risk Pressure Medium Low Low Project Team Low (T) Deadlines approaching (A) Maintain a detail plan of milestones Time Away Low Low Low Risk Owner Low (T) Communication with family (A) Flexible work schedule every other Friday Operation Risk Unpredictable Medium Medium Medium Project Team Medium (T) Fluctuations in environment and plan Stakeholder (A) Allowance in the contract for flexible Project Manager variations Ineffective Medium Medium Medium Project Manager High (T) Poor project management plan Project Team (A) Higher involvement from senior management Quality/Process Satisfaction Low High Medium Project Team (T) Request for modifications to contract Risk conditions (A) Replace or mandate oversight from a senior manager with the desired capabilities

  6. Risk Project Log (Cont.) Category Description Probability Impact Total Risk Impact Owner Status Status Trigger/Action Plan Technical Lack of Control High High High Project Extreme (T) Inundated with deviations, postponement Environment Manager in validation of items Risk (A) Executive assessment on significance achievability and adherence of time restrictions Legislation Medium Medium Medium Stakeholder High (T) Legislative and regulatory constraints (Political) Project may limit the public sector’s ability to Manager negotiate commercial arrangements with contractors (A) Ensure draft contracts have the flexibility to provide for changes in law, including circumstances where contracts may be frustrated Resource Risk Management Low Low Low Project Medium (T) Lack of knowledge or experience with Manager dealing with international projects (A) Replace or mandate oversight from a senior manager with the desired capabilities

  7. Risk Project Log (Cont.) Category Description Probability Impact Total Risk Impact Owner Status Status Trigger/Action Plan Programmatic New Market High Medium Medium Project Medium (T) Fluctuations in market, culture, and Risk Culture Manager environment differences (External) Environment Project Team (A) Target local firm or a certain percentage Stakeholder of local hire in management for understanding of environment Aggressive Medium Low Low Project High (T) Request for modifications to contracted Rivals Team conditions Competition (A) Discuss effect of modifications on plans, and settle if modifications to requirements will ensue Budget Risk Financial Loss Medium High Medium Project Extreme (T) Fluctuations in market, culture, and environment differences (A) Allocate for a slow supply with a growth based off financial analysis in the contract

  8. Qualitative Analysis Significance of the Risk

  9. Risk Probability and Impact Analysis

  10. Qualitative Risk Assessment Analysis • Following the Quantitative Risk Analysis, the Qualitative Risk Analysis Process is performed: • Risk Register identified and created • Risk plan created • Cost management plan • Schedule management plan

  11. Criteria for Risks to Require a Response Plan Determining the Risk Likelihood Level (Edmead, 2007): • High—The risk is highly probable and capable of occurring. Preventative strategies and controls are consideredineffective. • Medium—The risk is probable and capable of occurring. Preventative strategies and controls exist to ward off the potential of the risk’s threat. • Low—The risk is highly improbable and lacks capability. Preventative strategies and controls exist to ward off the potential of the risk’s threat.

  12. Criteria for Risks to Require a Response Plan Identifying the Risk's Impact (Edmead, 2007): • High—The risk’s impact is high and may result in loss in assets, jeopardize operations, or cause a fatality or injury to an employee or the public. • Medium— The risk’s impact is high and may result in loss in assets, jeopardize operations, or cause employee or public injury. • Low—The risk’s impact may result in some asset losses or affect operations minimally.

  13. Criteria for Risks to Require a Response Plan Identify the Risk Threat Probability (Edmead, 2007): • High—Scale of 21 to 30 rates the risk’s threat probability. • Medium—Scale of 11 to 20 rates the risk’s threat probability. • Low—Scale of 1 to 10 rates the risk’s threat probability.

  14. Risk Response Planning • Risk Reassessments • All risks will be properly tracked and reviewed to determine when and if a risk can be closed. • Risk Audits • Project managers will be performing bi-weekly audits on all identified risks, with the objective of determining the root cause of each risk. • Status Meetings • Weekly project status meetings will be conducted by the project manager. Risk management will be a standing agenda item.

  15. References: • http://www.pmvista.com/risk-categories/ • Project Management Institute (2008). A guide to the project management body of knowledge (PMBOK® guide) (4th ed.). Newtown Square, PA: Author. • Gray, C.F., & Larson, E. (2008). Project Management: The Managerial Process (4th ed.). New York, NY: McGraw-Hill/Irwin

  16. References: • Cooper, D. F., Grey, S., Raymond, G., & Walker, P. (2005). Project risk management guidelines: Managing risk in large projects and complex procurements. Hoboken, NJ: John Wiley & Sons. • Project Management Institute (2008). A guide to the project management body of knowledge (PMBOK® guide) (4th ed.). Newtown Square, PA: Author. • Edmead, T., 2007.Understanding the Risk Management Process. Retrieved from http://www.theiia.org/intAuditor/itaudit/archives/2007/may/understanding-the-risk-management-process/

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