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    Projects Risk Management

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    Hari Purwadi
    The document discusses risk management in projects. It defines risk and explains the importance of risk management in projects. It also describes the key steps in risk management as risk identification, risk assessment, risk mitigation, and risk monitoring and control.

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    Projects Risk Management

    Uploaded by

    Hari Purwadi
    36 views22 pages
    The document discusses risk management in projects. It defines risk and explains the importance of risk management in projects. It also describes the key steps in risk management as risk identification, risk assessment, risk mitigation, and risk monitoring and control.

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    The document discusses risk management in projects. It defines risk and explains the importance of risk management in projects. It also describes the key steps in risk management as risk identification, risk assessment, risk mitigation, and risk monitoring and control.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    36 views22 pages

    Projects Risk Management

    Uploaded by

    Hari Purwadi
    The document discusses risk management in projects. It defines risk and explains the importance of risk management in projects. It also describes the key steps in risk management as risk identification, risk assessment, risk mitigation, and risk monitoring and control.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 22

    Dokuz Eylul University

    PROJECT RISK MANAGEMENT


    BY:
    SAYED AMIR ALAWI

    2018
    Introduction
    In our today’s live by improving science and technology we face much
    more risks in our business and daily life. And it is impossible that we don’t
    risk and earn benefit. Since, the nature of business is taking risk.
    The crucial thing to be considered is:
    Which kind of risks are acceptable and which kind of them are more
    dangerous to accept. So they must be declined in our project, daily lives
    or future.
    What Is Risk?!
    ➢ Risk can be defined as uncertainty of outcome whether positive or
    negative.* it is a probability of events.(no certain)
    1 - Business risk (profit and loss) 2 – Pure risk(injury due to accident)
    Ex: Exchanging money, throwing down yourself.

    * - PRINCE2, 2002. p239


    Risk Management
    What is risk management?
    ✓The processes of identifying and reducing risks are called risk
    management.
    Why risk management in PM?
    Project problems can be reduced as much as 90% by risk analysis.
    ➢ Positive: more info available during planning, improve probability of
    success
    ➢ Negative: project cut due to risk level
    Causes of Risk on a Project
    ➢ Quality
    ➢ Schedule
    ➢ Resources
    ➢ Cost
    ➢ Scope
    ➢ Customers satisfaction
    Risk assessment and Risk management
    Risk assessment:
    ➢ What can go wrong?
    ➢What is the likelihood that it would go wrong?
    ➢ What are the consequences?
    ➢ What is the time domain?
    Risk Assessment And Risk Management ( c ont i nue )

    Risk management:
    ✓ What can be done and what options are available?
    ✓ what are the associated trad-offs in terms of cost, benefits and risks?
    ✓What are the effects of current management decision to the future
    options?
    Risk Management strategies:
    Positive risks( Opportunities ): Negative risks( threats )
    Exploit Avoid
    Enhance Transfer
    share Mitigate
    Acceptance Acceptance
    Risk management processes:
    A typical risk management process includes the following key steps:
    Risk identification
    Risk assessment or analysis
    Risk mitigation
    Risk monitoring
    Risk Identification
    Risk identification develops the basis for the next steps.
    Correct risk identification ensures risk management effectiveness. The
    identification and mitigation of project risks are crucial steps in managing
    successful projects*.

    *- Carbone and Tippett


    Risk Identification ( c o n t i n u e )
    In risk identification we look for the following steps:
    1 – Causes of failures:
    Unclear objectives
    Unrealistic plan
    Poor communication
    Poor leadership
    Lack of skills/ training
    Risk Identification ( c o n t i n u e )
    2 - Questions to identifying risks:
    What could go wrong?
    What could prevent this from happening?
    What can harm us?
    What is the worst case?
    What threats do we face?
    What opportunity could we face?
    Risk Identification ( c o n t i n u e )
    3 - Using PESTLE:
    Political risk
    Economic risk
    Socio-cultural risk
    Technological risk
    Legal risk
    Environmental risk
    Risk Identification ( c o n t i n u e )
    Risk checklist:
    Funding
    Time
    Staffing
    Customer relation
    Project size or complexity
    Overall structure
    External factors
    Risk Assessment
    It identify and evaluate hazards and take measures to control risks
    arising from them.
    Hazards: A situation that has the potential to cause human injury,
    damage to property, damage to environment or economic loss.
    Examples:
    ➢ A wet floor
    ➢ An open manhole
    ➢ Pothole
    Risk Assessment ( c o n t i n u e )
    The risk assessment process will vary between organizations. But should
    start with:
    ✓ Identification of hazards
    ✓ Analysis of who and what might be harmed
    ✓ Evaluation of the risk
    ✓ Documentation of the risks
    ✓ Taking action and review
    Risk Assessment ( c o n t i n u e )
    2 Methods which define risk priority:
    1st method:

    *-

    2nd method:
    Risk assessment calculation = severity x likelihood**
    * - (Turner, 2000, p. 457). ** - Cooke and Williams
    Risk Mitigation
    Risk Mitigation is the process of reducing the impact of a risk or the
    likelihood of a risk being realized.
    What to do about identified risk?
    ✓ Reduce likelihood of risk occurrence
    ✓ Reduce the impact of risk
    Risk mitigation ( c o n t i n u e )
    How to deal with each risk?
    Although construction risk may be varied and complicated, risk
    management techniques fall into 4 simple categories:
    ✓ Avoid
    ✓ Transfer
    ✓ Mitigate
    ✓ Accept
    Risk Monitor and Controlling Process
    Risk Monitoring and Control is the process of putting into action all of the
    risk planning done earlier in the project life-cycle.

    ✓ Monitor Identified risk


    ✓ Identify new risk
    ✓ Ensure the proper execution of planned risk responses
    ✓ Evaluate the overall effectiveness of the risk management plan in
    reducing risk
    Conclusion
    Importance of risk management in construction projects or any other
    projects is clear. So, the crucial and key steps who are risk identification
    and risk mitigation need to be done by skilled and experienced risk
    managers.
    The variation of risk by developing science and technology depends to
    these two steps specially risk identification process because only by
    identified risks taking proper actions to prepare future plan and reduce the
    risks are possible.
    References
    • Risk modeling, assessment and management. 3rd edition Yacov Y. Haimes
    • Risk analysis and management in construction (article) - Akintola S Akintoye. Department of Building and
    Surveying, Glasgow Caledonian University, Glasgow, G40BA, UK
    Malcolm J MacLeod - 1RISC Technical Services, International Loss Adjusters, 35 Seething Lane, London,
    EC3N 4AH, UK
    • different sites of internet.
    • Risk analysis in construction project (article) - chosen methods. Agnieszka Dziadosza* Mariusz Rejmentb**
    * - Institute of Structural Engineering, Poznan University of Technology, Piotrowo 5, 60-965 Poznan, Poland
    ** - Institute of Building Engineering , Wroclaw University of Technology, Wybrzeze Wyspianskiego 27, 50-
    370 Wroclaw, Poland

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