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ISE515: Team 5: Risk Management
Transcript of ISE515: Team 5: Risk Management
Risk identification is the
process of determining risks
that could potentially prevent the program, enterprise, or investment from achieving its objectives. It includes documenting and communicating the concern.
Types of Risk
& Make decisions
- An uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives
- Response to risk
- a provision to mitigate cost and/or schedule Risk to provide further detail on what types of risk are meant to be mitigated
ISE 515: Engineering Project Management
Project Management, A Managerial Approach, 6th Edition by Jack R. Meredith and Samuel J. Mantel Jr. Publisher: John Wiley & Sons; ISBN: 13978-0471-715375.
Take Away Points
Prepared by: Team#5 and members
Heejin Mia Lee
What is RISK ASSESSMENT?
The determination of
quantitative or qualitative value of risk
related to a concrete situation and a recognized threat/hazard
Is risk a bad thing? Can it be avoided? Can it be mitigated?
Is risk management one time event?
Will risks stay the same once we define them? increase? decrease?
How can we assess them and how can we use it?
How do we know if the risk is under control?
identification, assessment, and prioritization
of risks (defined in ISO 31000 as the
effect of uncertainty on objectives
, whether positive or negative) followed by coordinated and economical application of resources to
minimize, monitor, and control the probability and/or impact of unfortunate events
or to maximize the realization of opportunities.
Allow time/space for workers to communicate risks
Make clear who is responsible for what risk
Assign a risk owner for each risk that you have found
Risks are already mapped, prioritized and understood.
Create risk response plan that focuses on the big wins.
Organize your project in such a way that you don't encounter a risk anymore
Unlikely to do without effecting the scope
Influencing the causes or decreasing the negative effects that could result
Good choice if the effects on the project are minimal or the possibilities to influence it prove to be very difficult, time consuming or relatively expensive
Move the risk to another party (e.g. insurance)
Work and risk put partially on other parties by collaberation
Probability of Occurrence
Severity of Impact
How do we MEASURE it?
Identify as many risks as possible
What can go wrong
Minimize their impact
What can be done before the project begins
Manage responses to risks that do materialize
Provide contingency funds to cover risk events that actually materialize
Remember that effective communication is key
Risk Identification Techniques
Event inventories and event loss data
Interviews and self-assessment
Risk questionnaires and surveys
Experts and standard
Prior projects (history)
There are multiple sources for risk. Some factors that should be considered are:
Key performance parameters
Stakeholder expectations vs. current plan
External and internal dependencies
This is about bookkeeping of the risks.
Maintaining a risk log:
enables you to view progress and make sure no risks are forgotten.
is a perfect
informing your team members and stakeholders what is going on.
Determination of risk management priorities through establishment of qualitative and quantitative relationships between benefits and associated risks. 
Ranking identified risks by considering the consequence and probability of them.
How to evaluate?
-scope of potential impact
Risk evaluation allows you to:
1. determine the significance of risks
2. decide to accept a specific risk or take action to prevent or minimize it.
1. Either eliminates, substitutes or reduces the risks as early as possible.
2. Addresses these questions based on risk assessment step:
How severe is the risk?
How immediate is the risk?
Who does it affect?
How easily could it be controlled?
What other benefits would there be from controlling the risk?
A good risk control plan
Why Risk Management is Important
Case study: Runaway Lorrie
https://www.youtube.com/watch?v=icN40I3JJLYRVAsec 2013: Alex Hutton; 27:20 to 29:08
Keys to Risk Management
What can go wrong?
What can be done before the project begins?
Provide contingency plan and funds
3 Risk Response Options
-Interviewing expert or consultant
-Risk analysis charts
-Decision tree analysis
Risk control plan helps with controlling the risks.
long term (years)
Risk control plan includes what you will do:
Planning includes the result of " Risk Assessment" step:
High risk plan
Medium risk plan
Low risk plan
We need to make sure
All levels are trained for proper risk control execution
Controls are converted into clear, simple execution orders understood at all levels
Everyone involved knows that risk contingencies are being executed when an order is issued
Options for Dealing with Risk
Each contingency plan should contain a trigger point to determine when the contingency plan should be implemented
Exercise: Finals studying
 Harrison, Frederick L., and Dennis Lock. Advanced project management: a structured approach. Gower Publishing, Ltd., 2004.
 Kerzner, Harold R. Project management: a systems approach to planning, scheduling, and
controlling. Wiley, 2013.
 Kreidler, Erich. ISE 515 Risk Management Class Presentation, 2013.
 Meredith, Jack R., and Samuel J. Mantel Jr. Project management: a managerial approach. Wiley. com, 2011.
 Mobey, Alison, and David Parker. "Risk evaluation and its importance to project implementation." Work Study 51, no. 4 (2002): 202-208.
 Jutte, Bart. "10 Golden Rules of Project Risk Management." 10 Golden Rules of Project Risk Management. N.p., n.d. Web. 12 Aug. 2013.
 Shenkir, William G. and Walker, Paul L.. Enterprise Risk Management: Tools and Techniques for Effective Implementation. Institute of Management Accountants
 Daw, Catherine. Project Management Series: Risk Management – A Key Ingredient to Project Success. SPM Learning Ltd
 Tripple Bottom Line. Risk Management Group. Risk Pentagon
1. significance and likelihood of the risks occurring.
2. Rating of each risk is on a scale of one to ten.
3. Visualization of the risks relation to each other
4. Plan of what type of controls should be implemented
Risk Management is
Constant and Cyclical.
Every project will have risks...
Images and Videos
 Spurlock, Morgan. The greatest TED Talk ever sold. TED
 Hutton, Alex. Towards A Modern Approach To Risk Management. RVAsec
 QBE Europe; https://www.youtube.com/user/QBEEO?feature=watch
 riskmanagement. "Risk Management: Learning by Example." Secure360. N.p., n.d. Web. 12 Aug. 2013.
How do we determine this?