Lecture 11 - Project

Question 1

Define Risk and Risk Management

Answer 1

Risk
➢The possibility of loss or injury;
➢Situation, problem, enhancement or opportunity having a measured impact (positive or negative) on an outcome;
➢Exposure of an activity to an uncertain outcome;

Risk management
➢The iterative process of: Identifying, assessing, analyzing, managing & monitoring and evaluating & reviewing risk.

Question 2

What are the two potential sources of risk with examples?

Answer 2

Internal (controllable)
Some examples:
➢Ambiguous project charter
➢Communication bottlenecks
➢Lack of reporting
➢Limited resources
➢Limited capability

External (uncontrollable)
Some examples:
➢Economic cycles
➢Changing technology
➢Legislative constraints
➢Environmental factors
➢Social changes

Question 3

What is SWOT?

Answer 3

S-trenghts
W-eaknesses
O-pportunities
T-hreats

Question 4

What is PESTELG

Answer 4

Political
Economic
Social
Technological
Environmental
Legal
Global

Question 5

What are some tools used for identifying risks?

Answer 5

➢ Risk registers
➢ Project completion reports
➢ SWOT analysis
➢ PESTELG
➢ Brainstorming
➢Project charter
➢Feasibility studies

Question 6

What is the 5 by 5 priority grid.

Answer 6

Used to assess the risk
Probability Impact
1 Remote 1 Insignificant
2 Unlikely 2 Minor
3 Likely 3 Moderate
4 Very likely 4 Major
5 Certain 5 Catastrophic

➢Values 1-6= Dealt with by existing procedures;
➢Values 8-12= Project manager intervention;
➢ Values 15-25= Senior management intervention;

Question 7

How can you analysis the risk?

Answer 7

➢Program Evaluation & Review Technique (PERT analysis ) considers the critical path and other networks;
➢SWOT and PESTELG analysis – consider issues impacting the situation;
➢Expert judgement – considers opinions, perspectives & viewpoints;
➢Stakeholder forums – considers expectations, objectives & deliverables;
➢Decision trees – considers possible paths & expected values returned;

Question 8

What is managing the risk in terms of possible risk responses?

Answer 8

1.Reject -modify plan to eliminate risk;
2.Accept -addressed as they arise;
3.Mitigate-proactive action to minimize the impact;
4.Share-partnership with 3rd party;
5.Transfer -outsourced to 3rd party;
6.Enhance - actively increase the probability and/or positive impacts of an opportunity;
7.Exploit: ensure that the identified opportunity is realised by eliminating the uncertainty around it altogether so that the opportunity definitely happens.

Question 9

How can you document the risk?

Answer 9

Using a risk register

➢ The more detailed the risk event, the more targeted the response;
➢ Managed risk requires the ‘right’ owner;
➢ Risk is always communicated and owned by all stakeholders;
➢ Risk is either rejected, accepted or managed;
➢ Risk can impact the project schedule and other variables;
➢ Ongoing risk control is essential;
➢ Risk register should be updated at every phase of the project lifecycle

Question 10

Why should you see project management as a strategy?

Answer 10

Project management as a strategy (not simply as planning & execution)
➢Recognize & manage proactively project complexity;
➢Decision making based on strategic approaches;
➢Project lifecycle thinking;
➢Include variables in line with TBL.

Question 11

What are ways to aligning the risk profile

Answer 11

➢Risk averse
Low tolerance & ability to accept & manage risk
Conservative approach, proven techniques, distanced from change
Caution is the principal focus

➢Risk neutral
Dispassionate tolerance & ability to accept & manage risk
No defined philosophies, reaction oriented, measured indifference
Balance is the principal focus

➢Risk taking
High tolerance & ability to accept and manage risk
Challenges current thinking, innovative approach
Experimentation is the principal focus