Risk Management L1 Flashcards
What is a Risk?
The chance of exposure to the adverse consequences of future events. (Prince2)
- Possible future problems, not current
Negative Risk:
Involved understanding potential problems that might occur in the project and how they might impede project success.
e.g. Key staff are ill at critical times
Positive Risk
- Positive risks can result in good things happening, called opportunities
- Positive risk management is an investment
Why is risk planning not used?
- Lack of awareness of the approach
-Unwillingness to spend additional time an resources on risk management.
-Development manager may wany projects to go ahead and do not want project spnsors to be dettered by considering possible failures
-If success ful, you might not experience a benefit in spite of there being a cost associated
Categories of Risk( Actors)
Actors include all those who are involved in the project, - developers, users managers. etc
Categories of Risk( Technology)
- Technology relates to development tools and techniques used to implement the project and to technology embedded in project deliverables
Categories of Risk(Tasks)
- Represents work to be carried out
-A typical Risk is that the amount of effort needed to carry out the task is underestimated, so work is not completed by the deadline
Categories of Risk( Structure)
Structure covers management Procedures
e.g. a group assigned a project task is not informed of the assignment because it is not part of the project communication network, so task completion is delayed
Risk Management Framework
Risk Identification - wjat risks might we find
-Risk Analysis and Prioritisation: which are the most serious risks?
- Risk Planning- what are you going to do about them?
-Risk Monitoring- what is the current state of the risk?
what is a Framework?
a structure that gets us started
what is Risk Identification?
- Failure to keep within the cost estimate
-Failure to achieve the required completion date - failure to achieve required Quality and operational Requirements
Quantitative Risk Analysis
- Numeric estimate of the overall risk on project objectives
-used for projects that:
Require contingency reserve for schedule and budget.
Large and complex, involving go/No-go decisions.
Senior management wants more detail.
Techniques:
Three point Estimate
Expected monetary value or risk exposure
Program evaluation and review technique, PERT
Quantitative Risk Analysis
(Probability)
Lowest probability is 0
Highest probability is
Qualitative Risk analysis
Prioritisation of risks uses a Pre defined rating scale which considers likely hood and impact
- quick an easy to perform
- no special software ad tools needed
- Evaluation of both probability and impact
Risk Acceptance
when the cost of avoiding the risk is (estimated to be ) greater than the actual cost of the damage that might be inflicted
Risk Avoidance
Minimise probability, avoid the cause associated to the risk
Risk Reduction
Actions are taken to reduce likelihood of risk, prototyping ought to reduce the risk of incorrect requirements
Risk Transfer
Risk is transferred to another person or organisation
Risk Mitigation/ Contingency mesures
Actions are taken to reduce the impact if the risk occurs
Cost effectiveness of risk actions
Addressing a risk usually hasa cost associated and the cost effectiveness can be measured
Leverage = (REbefore - REafter) / cost
leverage greater than 1 we implement and less than 1 we don’t implement
RE is risk exposure
What is PERT
Program Evaluation and review technique
- Used to determine the expected time for the project activities
-Can be used to calculater the probability of project overrun
- Requires an understanding of critical pathways
What do we need to carry out PERT analysis
-List of activities
- Predecessor/ Dependancy relationships
-Critical Path- sequence of actions where no delay is permissible
For Each Activity:
-Likely duration
-Optimistic duration
-Pessimistic Duration
how to calculate Variance
(Pessimistic-optimistic/6) ^2
How to Reduce steps on the critical path.
-Eliminate tasks on the critical path
- replan serial paths to be in parralell
-overlap sequential tasks
-shorten the duration of critical path tasks
-Shorten early/longest/ easiest task
-Shorten task that cast the least to speed up
