Eucpmc3 V1.0

PM
M C3
C3
3 PM²
² Risk Management
EUCPMC3_CE C3 PM² Risk Management v1.0
Introduction
The European Commission's
Project Management Methodology
Slide 3
Capgemini Academy 2018
Objectives
This course enables participants to:

• Understand the Project Risk Management process.
• Appreciate the value of Risk Management in planning and controlling of projects.
• Learn how to identify and analyse project risks.
• Learn how to create effective risk statements.
• Understand various techniques for risk analysis.
• Understand how to respond to risks.
• Understand the various risk artefacts from PM² : the Risk Log and Risk
Management Plan.
Slide 4
C1 PM²
Essentials
C4 Requirements
& Stakeholders
C2 PM² in
Practice
Pre-requisite courses Follow-up courses

Slide 5
Course Schedule
Session 1 Session 2
• 09:00 Kick-off • 14:00 Identify the Risk
• 09:45 Intro Risk (Management) • 14:45 Assess – Estimate
• 11:00 Break • 15:15 Break
• 11:15 Risk Management Process • 15:30 Assess – Evaluate
• 11:45 Identify the Context • 15:45 Response Development
• 12:30 Lunch • 16:15 Control
• 16:45 Communicate
• 17:00 Wrap-up
Slide 6
Course Content
Introduction
Overview PM²
Risk Management
Wrap-up
Slide 7
Introduction
PM2 Certification Programme
Slide
de 9
Introductions
1. Take a minute to introduce yourself to

the class.
2. What are your expectations
concerning this training?
Slide 10
Info about Exam & Certification
Slide 11
Rules of the Road
Emergency
Start and finish Breaks Course style
procedures
Slide 12
Contact the CoEPM2 Team
Slide 13
Introduction to the
PM² Methodology
Quiz
Use your computer or Smartphone
go to http://www.socrative.com
Choose Student Login
Type room name Capgemini
Type your (first) name
Wait for the trainer to start the quiz
Use the PM² manual

to answer the questions
Slide 15
The Purpose of PM²
• The purpose of PM² is to

enable EC Project Managers to
deliver solutions and benefits
to the European Commission
through the effective
management of project work.
Slide 16
The PM² Methodology
Slide 17
The House of PM²
Slide 18
PM² Mindsets
The PM² Mindsets enable us to apply the Methodology more effectively
and help us navigate through the complexities of project reality.
PM² PM²
Processes Processes & Mindsets
Slide 19
PM² Project Lifecycle

Effort
Initiating PlanninPlanning Executing Closing

g Time
Monitor & Control
Slide 20
PM² Phases
PM² Phases Description

1 Initiating Get the project off to a good start.
2 Planning Define products, verify the Business Case, plan work…
3 Executing Create the project's products.
4 Closing User acceptance, handover to maintenance…
Monitor & Control: The Project Manager (PM) monitors & controls the work, risks,
issues, quality, etc, throughout the whole project lifecycle.
Slide 21
PM² Project Lifecycle - Phases & Drivers
Project Project Project Project

Project
Owner (PO) Manager (PM) Core Team (PCT) Stakeholders
Drivers initiates plans executes evaluate
Project Initiation
on Request
Phase Business Project

Proj ect Project
Project Project
Inputs Case Charter
Char Work Plan
Pla Delivera
Deliverables
Monitor & Control
Initiating
iating Planning
Planning Executing
Exec
Executin
uting Closing
Project Define Scope Elaborate Scope
Elabo Manage Scope
Manag Capture Lessons
Captu
Phases Assign PM Assig PCT
Assign Coordinate
Coord Accep Project
Accept
Project Handbook
Phase Project Project Project-End
Outputs Charter & Project Deliverables Report
Work Plan
Phase Gates RfP RfE RfC

Approvals
Slide 22
Phase Gates / Approvals
• These check points contribute to the overall project

management quality.
• The three PM² (approval) Phase Gates are:
– RfP (Ready for Planning): At the end of the Initiating Phase
– RfE (Ready for Execution): At the end of the Planning Phase
– RfC (Ready for Closing): At the end of the Executing Phase
Initiating Planning Executing Closing Archived
RfP RfE RfC

Slide 23
PM² Phases & Artefacts

Initiating Planning Executing Closing
- Document the idea/need - Organise a Kick-off Meeting - Organise a Kick-off Meeting - Organise a Project-End Review
Activities
- Identify key stakeholders - Tailor the PM² process - Coordinate project execution Meeting
(and their needs) - Assign roles & responsibilities - Conduct Meetings - Capture lessons learned and
- Create a business justification - Elaborate project scope - Assure Quality post-project recommendations
for the project - Develop work breakdown & project - Create Project reports - Get final project acceptance
- Define the project scope and schedule - Distribute information - Release project resources
organisation - Develop project plans - Ensure deliverables acceptance - Archive project information
- Distribute plans to stakeholders
Project Initiation Request Planning Kick-off/ MoM Executing Kick-Off/MoM Project-End Review Agenda/ MoM
Business Case Project Handbook Meeting Agendas/MoMs Project-End Report
Project Charter - Roles & responsibilities Project Progress Report - Lessons Learned
- Management plans
Project Logs (setup). Project Status Reports - Best Practices
- Requirements management
Artefacts
Quality Review Report - Post Project Recommendations

Project Stakeholder Matrix
Change Requests Project Acceptance Note
Outsourcing Plan
Project Work Plan Deliverables Acceptance Note
Deliverables Acceptance Plan

Transition Plan
Business Implementation Plan
RfP RfE RfC
Ready for Planning Ready for Executing Ready for Closing
Monitor & Control

Regularly updated Checklists
- Monitor Project Performance Risk Log
- Manage Issues and Decisions Phase-exit Review Checklist
Activities
Artefacts
- Control Schedule
- Manage Stakeholders Issue Log Quality Review Checklist
- Control Cost
- Manage Deliverables Acceptance Decision Log
- Manage Quality Deliverables Acceptance Checklist
- Manage Transition
- Manage Requirements Change Log Transition Checklist
- Manage Business Implementation
- Manage Project Change Project Work Plan Business Implementation Checklist
- Manage Outsourcing
- Manage Risks Requirements Document
Slide 24 Stakeholder Checklist
The PM² Artefacts Landscape
Requirements Project Change Risk
Management Management Management
Plan Plan Plan
Issue Quality Communications

Management Management Management
Plan Plan Plan
MANAGEMENT PLANS MEETING DOCS PROJECT REPORTS
Outsourcing Deliverables Meetings Project Progress

Plan Acceptance Agendas Report
Plan
Minutes Quality Review

Project Project Report
Business Case Transition Plan Of Meetings
Work Plan Handbook
Project Status
Business Project-End
Project Initiation Project Change Report
Project Charter Implementation Report
Request Stakeholder Matrix Request Form
Plan

Monitor & Control
PROJECT LOGS Project Work CHECKLISTS

Plan (updates) Phase-exit Quality Stakeholders
Change Log Risk Log Review Checklist Review Checklist Checklist
Deliverables Transition Business

Issue Log Decision Log Implementation
Acceptance Checklist
Checklist Checklist
Slide 25
Tailoring
• First, understand purpose and

value of the methodolgy
• Don’t cut, but customize
• Balance control gained against
effort required
• Elimate waste, but respect the
integrity of the method
Slide 26
The purpose of documentation is to…
• Help people think something through

• Provide a clear picture of the project requirements.
• Facilitate communication.
• Facilitate agreement by all project stakeholders.
• Offer a baseline for the monitoring & controlling.
• Document important decisions made (and track
changes).
• Respond to Audit requirements.
• Integrate new-team members.
• Support organizational memory.
• Support maintenance
Slide 27
The PM² Publications & Resources

PM2 PM2 Tools & RM Tools & PM2
Templates Techniques Techniques Study Case
PM² Guide
ide
Agile
Agile Tools
ls PM² PPM Tools
& Techniques & Techniques
In anet
Intranet
Intran et
Agile PM² PPM Guide Wikis
Guide
Slide 28
The Expanding Reach of PM²
Open
n PM
PM²
M
v1.0
PM²² v3
Euro
European
ropean
EU
U Member
Membe YOU
Institutions
States Europe
The World!
EU EU Grants
PM²² v1 PM²² v2 Agencies
es Beneficiaries
DIGIT European
(IT Projects) Commission European EU
Council Contractors
Public
European
Financial Sector
Institutions Private
Sector
Slide 29
The PM² Guide – Open Edition
e PM2 Pr
The Project
Proj
ojec
ect
t Mana
Manage
gement
gement Methodology
Management gy Guide – Open Edition
AVAILABLE via THE EU BOOKSHOP!
https://webgate.ec.europa.eu/fpfis/wikis/display/openpm2
https://joinup.ec.europa.eu/community/opm2
Slide 30
Risk Management
What is Risk?
• Risk is an uncertain event or set of

events, that should it occur, will have an
effect on the achievement of objectives.
• A risk is measured by the combination of

the likelihood of a perceived threat or
opportunity occurring and the magnitude
of its impact on objectives.
• Management of Risk: Guidance for

Practitioners, OGC 2010
Slide 32
What is Risk?
An uncertain event or condition that, if it

occurs, has a positive or negative effect
on one or more project objectives such as
scope, schedule, cost and quality
PMBOK® Guide 5th Edition
Slide 33
Assignment
Have a discussion in your team about:
1. What is ‘Risk Management’

2. What do you see as the benefits of
doing Risk Management?
You have 15 minutes

Prepare to present your findings
Slide 34
What is Risk Management
Management of Risk:
Risk management refers to the systematic
application of principles, an approach and a
process to the tasks of identifying and
assessing risks, and then planning and
implementing risk responses.
ISO 31000 Risk Management:

Coordinated activities to direct and control
an organization with regard to risk.
For effective risk management,

you need to identify, assess and control risks
Slide 35
Why Project Risk Management?
§ Improves chances of delivering the project objectives within budget and on time.
§ A proactive rather than reactive approach.
§ Fewer shocks, crises, and unwelcome surprises.
§ Threats are less likely to happen or have a serious impact.
§ Opportunities are more likely to be exploited.
§ Provides better “control” over uncertainties.
§ Reassures stakeholders.
Slide 36
Risk – a Matter of Attitude
Reactive
Proactive
• React to issues when necessary • Anticipate what could go wrong

• Crisis Management • Trying to prevent bad things from
• Fire fighting happening
• Lack of anticipation • Limit the damage when they happen
• Treatment / Correcting • Focus on prevention
(is typically more costly than
prevention)
Slide 37
Risk – a Matter of Culture
Behaviour
Risk averse towards Risk taking
taking risk
Risk
Behaviour Culture Behaviour
Learning culture towards towards Compliancy
negative policy
Blaming culture outcome compliancy Non-compliancy
Source: RiskIT,
ISACA.
Slide 38
Risk – a Matter of Appetite
Risk Capacity
Risk Appetite
Risk Tolerance
Risk Exposure
Slide 39
Risk - a Matter of Perspective
Financial
Enterprise Risk Management
Continuity
Portfolio
Operational
Governance
Strategic
Health & Safety

Programme
Security
Project Reputation
Purchasing
Environment
Slide 40
Risk of failure in the Value Chain
Project Context
Alignment Estimation & planning Delivery Change Benefits
Slide 41
Types of Project Risks

Interpersonal
Force majeure
Economical • Team conflict
• Floods
• Currency rates • Unqualified personal
• Storm
• Creditworthiness • Earthquake
• Transport • Strike
• Bankruptcy
Project Project
Project initiation
implementation
Objective
Technical
Scheduling Political Socio-cultural • Unproven
• Over-optimism • Influence • Moral hazards technology
• Missed milestones • Trade embargo • Cultural conflict • System failure
• Dependencies • Legislation • Misunderstandings
Slide 42
Risk – a Matter of Choice
Schedule
Risk Resources
constraints
Scope Budget
Quality
Slide 43
It’s a Cyclic Process
Control
Identification
Communicate
Response
development
Assessment
Slide 44
Risk Specialisms
Business Continuity Management
Health and safety management
Financial risk management
Reputational risk management
Incident and crisis management
Security risk management
Environmental risk management
Contract risk management
Slide 45
Risk Management Plan PM2
• Defines and describes the risk management for a project

– Processes, escalation and timing
– Tools and techniques
– Scales and tolerances
– Roles and responsibilities
– Documentation
– Communication
PM2 Guide V.2.5. App. B.1
Slide 46
Summary
• Risk is “an uncertain event or set of events, that

should it occur, will have an effect on the
achievement of objectives.”
• A risk is an uncertain event; an issue is not.
• For effective risk management, you need to identify,
assess and control risks.
• Risk is a matter of attitude, culture, considerations
and perspective each influencing risk management.
• Risk management is not a one-time
activity; you should apply it continuously.
• The Risk Management Plan in PM2 describes the
way Risk management is organized.
Slide 47
Module 2
Identify the Context
Inputs
Regulatory framework
and corporate
governance requirements
Risk management policy
Risk management
process guide
Activity documents
Lessons learned
Context
Techniques Outputs
Activity analysis
Stakeholder analysis
Risk management plan
PESTEL analysis
Stakeholder map
SWOT
Risk matrix Lessons learned
Slide 49

• Structure
• Culture and values
Organisati • Maturity
onal • Pressure
Project context
• Objectives context
• Strategic Alignment
• Organisational support
• Business Case PM Constraints
context HR
• Requirements
Procurement
Communication
Risk Management Plan

Slide 50
Common Process Barriers
• Lack of an organizational culture that appreciates the benefits of risk management

• Immature risk management practices
• Lack of risk facilitation resources and time
• Lack of policies, process, strategies and plans
• Lack of a senior management sponsorship
• Lack of training, knowledge and formal risk tools and techniques
• Lack of clear guidance for managers and staff
• Lack of incentives for participation in risk management activities
Source: Management of Risk: Guidance for Practitioners (2010)
Slide 51
Techniques
• Stakeholder analysis
• PESTEL analysis
• Risk Matrix
• SWOT analysis
Slide 52
Stakeholder Analysis: Influence/Interest Matrix
4
A
PROTECT
B
GOOD RELATION
interest
3
1
C
LOW PRIORITY
D
MONITOR
1 2 3 4 5
PM2 Tools & Techniques - 8

influence
Slide 53
Stakeholder Analysis: RASCI Diagram
Role 1 Role 2 Role 3 • Responsible

Person working on the activity
Activity 1 R A C
Activity 2 R C A • Accountable
The one person answerable person for
Activity 3 I A R correct completion
Activity 4 R A
• Supports
Helps to complete the task
• Consulted
(Key)stakeholder that should be involved
in the activity
• Informed
PM2 Guide V.2.5, 4.12
Needs to be informed about the activity
Slide 54
PESTEL Analysis
• Helps to capture understanding about

aspects of the context by using the
prompts:
– Political
– Economic
– Social
– Technological
– Environmental
– Legal
• Can be undertaken by individuals, or
during a team meeting or workshop
Slide 55
SWOT Analysis
Positive Negative
Weak-
Internal
Strength
nesses
Oppor-
External
Threats
tunities
Slide 56
PM2 Risk Likelihood/Impact Matrix
PM2 Artefacts V.2.5. Risk Management Plan
Slide 57
Butterfly Matrix
Slide 58
Workshop
In your team choose one of the

projects you are working on and
apply one of the following
techniques:
• Stakeholder analysis
• PESTEL analysis
You have 20 minutes

Slide 59
The PM² Artefacts Landscape
MANAGEMENT PLANS MEETING DOCS PROJECT REPORTS
Meetings
Agendas Project Progress
Report
MoMs
Project Project Status
Handbook Report
Project Transition
Business Case
Work Plan Plan
Change Quality Review
Business Request Form Report
Project Initiation Project Project-End
Project Charter Implementation
Request Stakeholder Matrix Report
Plan
Monitor & Control
PROJECT LOGS CHECKLISTS

Project Work
Phase-exit Quality Stakeholders
Change Log Risk Log Plan (updates)
Review checklist Review checklist checklist
Deliverables Transition Business

Issue Log Decision Log
Acceptance checklist Implementation
checklist Checklist
Slide 60
Roles and Responsibilities
Project Charter
Business Case Risk
&& Management
Project Charter
Project Handbook Plan
A: PO
Risk Risk Log

Risk Log Management (updated)
Plan
R: PM S: BM
RAM (RASCI) AGB* PSC PO BM UR SP PM PCT

Risk Management Plan I C A C I I R I
Manage Risks I C A S/C C I R C
Slide 61
Summary
• In order to be able to manage risk you

need to understand the
organizational, project and project
management context.
• A number of different techniques can
be applied for an analysis of the
context.
• Understanding of the context leads to
the definition of the way risk should
be managed. This is formalized in the
Project Handbook or a more detailed
Risk Management Plan.
Slide 62
Module 3
Risk Identification
Risk Identification
Control
Identification
Communicate
Response
development
Assessment
Slide 64
Risk Identification
Inputs
Activity analysis
Risk management plan
Stakeholder map
Lessons learned
Issues
Identify
Techniques the Risks Outputs
Checklists
Prompt list
Cause and effect diagrams Risk log
Group techniques Early warning indicators
- brainstorming
- Delphi
Questionnaires
Individual interviews
Assumption analysis
Constraints analysis
Risk descriptions
Slide 65
Techniques
• Checklists
• Prompt list
• Cause and effect diagrams
• Group techniques
– Brainstorming
– Delphi
• Questionnaires
• Individual interviews
• Assumptions analysis
• Constraints analysis
• Risk descriptions
Slide 66
Risk Description
Risk event
• Describes the source of • Describes the impact
the risk, i.e. the event or • Describes the area of that the risk would have
situation that gives rise uncertainty in terms of on the organizational
to the risk. the threat or the activity should the risk
opportunity. materialize.
Risk cause Risk effect
Slide 67
Risk Description
Cause Event Effect
Slide 68
Prompt List - Risk Breakdown Structure
Project risk
Technical risk Management risk Commercial risk External risk
Scope definition Project management Contractual T & Cs Legislation and

Requirements definition Organization Financing regulatory
Technical processes Resourcing Liabilities and warranties Exchange rates
Technology Communication Payment terms Site/facilities
Technical interfaces Information Suspension and Competition
Technology scaling Health and safety termination Weather
Performance environment Internal procurement Political
Reliability, safety, Corporate policy Subcontracts Pressure groups
security Reputation Client stability Force majeure
Test and acceptance Applicable law
Partner financial stability
Partner relevant experience
Slide 69
Cause and Effect Diagram
Third party Poor management of plan
Business analyst on holiday

Poor
representation in
project Analysis data
incomplete
Misunderstanding over
payment schedule
Payment outstanding
for analysis work
Delay to functional
specification sign
off
Concern
Business
over Insufficient
requiremen Project
developme user input
t unclear board
nt cycles Estimates User unable to
for front- have no requirements did
Technica User sign off
end panels precedent not address
l
in IS archiving
Concern over
costs of developing
Busines archiving sub-
s system
Slide 70
PM² Risk Log
Risk Identification and Description
ID Identified By Identification Category Risk Nam e Risk Description Status
Date
1 Name X xx/xx/xx Business Example 1 Detail text 1 Proposed

2 Name Y xx/xx/xx IT Example 2 Detail text 2 Approved
Risk Assessment Risk Response
3 Name Z xx/xx/xx External Example 3 Detail text 3 Approved
Identified By Identification Risk Risk Risk Risk Owner Escalation Risk Action Details Target Date Traceability/Comments
4
Date Name A
Likelihood xx/xx/xx
Impact Level IT Example 4
Response Detail (effort
text 4& responsible) Approved
5 Name B xx/xx/xx(L*I) Business ExampleStrategy
5 Detail text 5 Approved
<Name X> <xx/xx/xx> <Name M> <Yes>
<Name Y> <xx/xx/xx>
6 Name C xx/xx/xx <NameLegal
H> <Yes> Example 6 Detail text 6 Approved
<Name Z> <16/04/13> <3> <4> <12> <Name K> <Yes> <Reduce> <The contract with the <05/06/2013> <Related artefacts:
Outsourcer will include - Decision Log ID: DL03.>
detailed SLAs and associated
financial penalties.>
<Name A> <16/04/13> <2> <4> <8> <Name L> <Yes> <Reduce> <Define and agree on with the <05/09/2013> <Related artefacts:
hosting environment - Decision Log ID: DL04
Responsible the necessary - Work Plan ID: WP05>
activities, document them in a
plan and monitor the
Slide 71
Risk Status
Approved
Rejected
Slide 72
Workshop
In your team choose one of the projects you

are working on
Identify and make risk descriptions for at
least 3 risks
Have at least one risk with a positive effect
Fill in the Risk Identification and Description
columns of the Risk log
You have 20 minutes

Slide 73
Summary
• In order to manage the uncertainty in a

project you need to identify and
understand the risks involved.
• A variety of techniques can be used to
identify the possible risks for a project.
• A good risk description shows the
situation that causes the risk, the
uncertain event and the effect and the
outcome of the project.
• In PM2 the risks are documented in a risk
log maintained by the Project Manager.
Slide 74
Module 3
Risk Assessment
Risk Assessment
• Estimate
Control • Evaluate
Identification
Communicate
Response
development
Assessment
Slide 76
Qualitative vs. Quantitative Risk Analysis
PMBOK® Guide Fifth Edition defines Perform PMBOK® Guide Fifth Edition defines Perform
Qualitative Risk Analysis “The process of Quantitative risk Analysis as “—the process of
prioritizing risks for further analysis or action numerically analysing the effect of identified
by assessing and combining their likelihood of risks on overall project objectives”
occurrence and impact.”
• This analysis is only performed on risks
• We identify (or mark) risks for further which are marked for further analysis by
analysis. Perform Qualitative Risk Analysis process
• We identify actions for the rest of the • We identify “effect of identified risks on
risks based on the combined effects of overall project objectives.”
likelihood of occurrence and impact on
project objectives.
Slide 77
Risk Assessment — Estimate
Inputs
risk log
Early warning indicators
Estimate
Techniques Outputs
likelihood assessment
Delphi technique
risk log
Impact assessment
Proximity assessment
Expected value
assessment
Slide 78
Techniques for Estimate
Likelihood
Expected
Value
Impact
Slide 79
Impact over Time

Risk
High
Degree
Cost of change
Low
Project time
Slide 80
Delphi Technique
• Described in
PM2 Tools & Techniques
• The Delphi Technique is a method used to

estimate the likelihood and outcome of
future events. A group of experts
exchange views, and each individually
gives estimates and assumptions to a
facilitator who reviews the data and
issues a summary report.
Slide 81
PM² Risk Log

Risk Identification and Description
ID Identified By Identification Category Risk Nam e Risk Description Status
Date
1 Name X xx/xx/xx Business Example 1 Detail text 1 Proposed

2 Name Y xx/xx/xx IT Example 2 Detail text 2 Approved
Risk Assessment Risk Response
3 Name Z xx/xx/xx External Example 3 Detail text 3 Approved
Identified By Identification Risk Risk Risk Risk Owner Escalation Risk Action Details Target Date Traceability/Comments
4
Date Name A
Likelihood xx/xx/xx
Impact Level IT Example 4
Response Detail (effort
text 4& responsible) Approved
5 Name B xx/xx/xx(L*I) Business ExampleStrategy
5 Detail text 5 Approved
<Name X> <xx/xx/xx> <Name M> <Yes>
<Name Y> <xx/xx/xx>
6 Name C xx/xx/xx <NameLegal
H> <Yes> Example 6 Detail text 6 Approved
<Name Z> <16/04/13> <3> <4> <12> <Name K> <Yes> <Reduce> <The contract with the <05/06/2013> <Related artefacts:
Outsourcer will include - Decision Log ID: DL03.>
detailed SLAs and associated
financial penalties.>
<Name A> <16/04/13> <2> <4> <8> <Name L> <Yes> <Reduce> <Define and agree on with the <05/09/2013> <Related artefacts:
hosting environment - Decision Log ID: DL04
Responsible the necessary - Work Plan ID: WP05>
activities, document them in a
plan and monitor the
Slide 82
Workshop
In your team revisit the risk log you have

made in the previous assignment.
Estimating the likelihood, impact and
proximity of the risks
Fill in the Risk Assessment columns of the

Risk log (on a flip-chart)
You have 15 minutes

Slide 83
Summary
• In order to be able to deal with risks it is

useful to have a measure of both likelihood
of the risk occurring and the impact on the
objectives if the risk does materialize.
• likelihood per definition is an uncertainty
and can only be estimated.
• Impact and likelihood can sometimes be
more precisely predicted.
• Establishing the size of individual risks can
help prioritize and manage the totality of
risk for an activity or project.
Slide 84
Risk Assessment — Evaluate
Inputs
risk log
Evaluate
Techniques Outputs
Summary risk profiles

Summary risk profile
Summary expected
value assessment Relationships and
interdependencies
Probabilistic risk models
likelihood trees
Sensitivity analysis
Slide 85
Techniques for Evaluate
• Summary risk profiles

• Summary expected value
assessment
• Probabilistic risk models
• likelihood trees
• Sensitivity analysis
Slide 86
Probabilistic Risk Model
Slide 87
Summary Risk Profile

VH Red
Amber
Green
H
Likelihood (likelihood)
Blue
M Unacceptable risks
L
Acceptable risks Risk
tolerance
threshold
VL
VL L M H VH
Impact (effect)
Slide 88
Summary
• Evaluating the risks for a given

project helps you to manage and
control your projects
• Techniques like Summary Risk
Profile can aid you in looking at
the (developments) in the risk
exposure of your project
• A technique like a likelihood tree
helps you look at the effect of a
combination of several uncertain
events.
Slide 89
Module 4
Risk Response Development
Control
Identification
Communicate
Response
development
Assessment
Slide 91

Inputs
Summary risk profile
Relationships and
interdependencies
risk log
Lessons learned
Existing insurance
policies
Plan
Techniques Outputs
Risk response planning
Risk owner
Effort and Cost estimates
Risk log (including risk
Cost-benefit analysis
responses and
Decision trees secondary risks)
Project Work Plan
Slide 92
Techniques
• Risk response development

• Effort and Cost estimates
• Cost-benefit analysis
• Decision trees
Slide 93
Opportunities
Exploit Share Enhance Ignore
Eliminate Allocate Modify Subsume in

uncertainty Ownership Exposure Baseline
Avoid Transfer Reduce Accept
Threats
Slide 94
Avoid Tr
Transfer Reduce Accept
Threats
Slide 95
Cost /Benefit Analysis

Costs Benefits
• Cost of risk response • Effect of actions =
actions Inherent Risk – Residual Risk
• Secondary risks
Slide 96
Decision Tree
EMV = 20% X £1000K =
£680K £200K
No 80% X (£750K-£150K) =
EMV = £680K £480K
Build
prototype?
Yes 75% X £800K = £600K

EMV = £712.5-
£250
EMV = £462.5K
EMV = 25% X (£600K-£150K) =

£712.5K £112.5K
Slide 97
Workshop
With your team revisit the risk you have

previously identified.
Determine the type of actions you

propose
Describe the actual actions
Fill in the Risk response columns of the
Risk log
You have 15 minutes

Slide 98
Summary
• There are different types of

possible actions in respons to risk
identified
• Deciding on the proper actions
can be aided by cost / benefit
analysis, decision trees and other
techniques
Slide 99
Module 5
Risk Control
Risk Control
Control
Identification
Communicate
Response
development
Assessment
Slide 101
Control
Inputs
Risk owner
Risk log
Risk response plan
Control
Techniques Outputs
Risk Log
Update summary
Project Reports
risk profiles
Risk exposure trends
Update probabilistic
risk models
Slide 102
Slide 103
Techniques for the Control Step
• Update summary risk profiles

• Risk exposure trends
• Update probabilistic risk
models
Slide 104
Summary
• The cycle of risk management is

completed by controlling the risk.
• Monitoring the risk and the
effectiveness of responses is
necessary to control the risks in
your project.
Slide 105
Module 6
Communication
Communicate
Control
Identification
Communicate
Response
development
Assessment
Slide 107
Communicate
• Communication is a continuous
activity throughout the Risk
Management process.
• Communication is the key to effective
risk management.
It helps to:
– Identify new threats and
opportunities
– Monitor and review the overall
effectiveness of risk management
for an activity
– Provide assurance to third parties
Slide 108
PM2 Artefacts Landscape
Slide 109
Summary
• Effective communication about

risks contributes to effective risk
management.
• Effective communication about
risks contributes to a positive Risk
Culture
• Stakeholder analysis is basis for
effective communication about
risks.
Slide 110
Wrap-up
Course End: Lessons Learned (& Shared)
• What are you top 3 learnings?

• Which aspects of this course were delivered effectively?
• How can this course be improved?
Slide 112
Questions & Discussion
Slide 113

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EUCPMC3_CE C3 PM² Risk Management v1.0

This course enables participants to:

Pre-requisite courses Follow-up courses

1. Take a minute to introduce yourself to

Rules of the Road

Choose Student Login

Type room name Capgemini

Type your (first) name

Wait for the trainer to start the quiz

Use the PM² manual

The Purpose of PM²

• The purpose of PM² is to

The House of PM²

PM² Project Lifecycle

Initiating PlanninPlanning Executing Closing

PM² Phases Description

PM² Project Lifecycle - Phases & Drivers

Project Project Project Project

Phase Business Project

Monitor & Control

Phase Gates RfP RfE RfC

• These check points contribute to the overall project

Initiating Planning Executing Closing Archived

RfP RfE RfC

PM² Phases & Artefacts

Business Case Project Handbook Meeting Agendas/MoMs Project-End Report

Quality Review Report - Post Project Recommendations

Deliverables Acceptance Plan

Monitor & Control

Issue Quality Communications

MANAGEMENT PLANS MEETING DOCS PROJECT REPORTS

Outsourcing Deliverables Meetings Project Progress

Minutes Quality Review

Initiating Planning Executing Closing

PROJECT LOGS Project Work CHECKLISTS

Deliverables Transition Business

• First, understand purpose and

• Help people think something through

The PM² Publications & Resources

The PM² Guide – Open Edition

• Risk is an uncertain event or set of

• A risk is measured by the combination of

• Management of Risk: Guidance for

An uncertain event or condition that, if it

PMBOK® Guide 5th Edition

Have a discussion in your team about:

1. What is ‘Risk Management’

You have 15 minutes

ISO 31000 Risk Management:

For effective risk management,

Why Project Risk Management?

• React to issues when necessary • Anticipate what could go wrong

Risk – a Matter of Culture

Risk - a Matter of Perspective

Health & Safety

Alignment Estimation & planning Delivery Change Benefits

Types of Project Risks

It’s a Cyclic Process

Business Continuity Management

Health and safety management

Financial risk management

Reputational risk management