IT Project Management: Chapter 5 Risk Management

IT Project Management: Chapter 5 

Risk Management

Risk
Uncertain or chance events that planning can not overcome or control.
 

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).

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.

Managing Risk

Step 1: Risk Identification
Generate a list of possible risks through brainstorming, problem identification and risk profiling.
Macro risks first, then specific events

Step 2: Risk Assessment
Scenario analysis for event probability and impact
Risk assessment matrix
Failure Mode and Effects Analysis (FMEA)
Probability analysis
Decision trees, NPV, and PERT
Semiquantitative scenario analysis

Step 3: Risk Response Development
Mitigating Risk
Reducing the likelihood an adverse event will occur.
Reducing impact of adverse event.
Avoiding Risk
Changing the project plan to eliminate the risk or condition.
Transferring Risk
Paying a premium to pass the risk to another party.
Requiring Build-Own-Operate-Transfer (BOOT) provisions.
Retaining Risk
Making a conscious decision to accept the risk.

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IT Project Management: Chapter 5 Risk Managemnt