I've started writing notes based on the textbook chapters which seem to match up with the weekly topic. Please feel free to add you notes as well! -AB
Chapter 7 - Managing Risk (possible parallel to Week 5 lecture: Risk Management and Risk Assessment Techniques)
risk is an uncertain event/condition that will positively or negatively affect project outcomes
risk management identifies
as many risk events as possible (what can go wrong)
ways to minjimize the impact of potential risks before beginning the project
risk management creates
contingency plans to respond to risks if they occur
fund pools to cover risk events
chances of a risk occurring are greatest during concept, planning and start-up phases but cost the least to deal with and have the most potential for their impact to be minimized
at later stages of a project, the cost of responding to a risk increases exponentially
examples of potential risks
external: inflation, market acceptance, exchange rates, government regulations
external risks are sometimes called threats
Risk Management Process = Risk Identification ->Risk Assessment ->Risk Response Development->Risk Response Control
RISK IDENTIFICATION
meeting of core team members led by project manager
an activity of critical thinking
open mind mentality encouraged: brainstorming and other problem identifying techniques (what these are I don't know)
focus on events that could produce consequences, not the objective that must be met
a useful tool is a Risk Breakdown Structure or RBS to identify risks that can affect the whole project
next breakdown work into specific deliverables and create risk management reports for these
typically this step is done by the small sub-teams working on these sections
a risk profile is another useful tool: list of questions addressing traditional areas of uncertainty on a project
the best profiles are tailored to the organizations strengths and weaknesses
address both technical and management risks
generated, updated and stored by personnel from the project office
if risk profiles are not available, use historical records of past projects
RISK ASSESSMENT
reconsider identified risks to eliminate inconsequential/redundant ones and rank the others in terms of urgency
scenario analysis technique: assess each risk according to probability and impact
example: personnel leaving the organization would have a significant impact and, in some cases, be a common occurence - mitigate risk by offering incentive schemes or preliminary training of other members in case of turnover
create numeric based probability scales and numeric, rank order, or qualitative impact scales
impact depends on a project's priority: time vs. cost
categorize conclusions into a risk assessment matrix typically structured around the impact and probability measures set on the x-y axis
Failure Mode and Effects Analysis (FMEA): Impact x Probability x Detection = Risk Value
uses a five point scale
for detection, 1 indicates risk appears completely obvious and 5 indicates the problem can only be seen after the event has occurred
Probability Analysis
decision tree: alternative coursers of action using expected values
net present value (NPV): assess cash flow risk using a minimum desired rate of return discount (e.g. 15 percent) (this causes my eyes to glaze over (@_@)
Project Evaluation and Review Techniques (PERT): look at overall cost and schedule risk to determine the likelihood that the project will be completed on time and on budget
PERT simulation simulates the network using a random network generator to discover the relative probability of an activity becoming critical
okay, that last bit has killed my will to continue for now. MORE LATER.
Chapter 7 - Managing Risk (possible parallel to Week 5 lecture: Risk Management and Risk Assessment Techniques)
Risk Management Process
= Risk Identification ->Risk Assessment ->Risk Response Development->Risk Response Control
RISK IDENTIFICATION
RISK ASSESSMENT