Professional Development Unit

PMP Exam Prep Course

Project Risk Management
Session 21
What is Risk?
 Discussion Question
Discussion Question

Do You see any risk?

 Introduction to Risk
Introduction to Risk
 Introduction to Risk
Introduction to Risk

What is Risk?
 Introduction to Risk
Introduction to Risk
 Introduction to Risk
Introduction to Risk

Based on which criteria do we evaluate risks?

How Do You Deal With Risks in
Your Project?
 Avoid
Response Strategies – Negative Risks

The best thing that you

can do with a risk is avoid
it—if you can prevent it
from happening, it
definitely won’t hurt your
project.
 Mitigate
Response Strategies – Negative Risks

If you can’t avoid the risk,

you can mitigate it. This
means taking some sort of
action that will cause it to
do as little damage to your
project as possible.
 Transfer
Response Strategies – Negative Risks

One effective way to deal

with a risk is to pay
someone else to accept it
for you. The most common
way to do this is to buy
insurance.
 Accept Accept
Response Strategies – Negative Risks

When you can’t avoid,

mitigate, or transfer a risk,
then you have to accept it.
But even when you accept
a risk, at least you’ve
looked at the alternatives
and you know what will
happen if it occurs.
 Escalate
Response Strategies – Negative Risks

If the risk is not in your

project’s scope, you might need
to tell somebody else about it
to find an appropriate response
 Exercise
Exercise

Risk Response Strategies

Risk Breakdown
Structure (RBS)
A tool to categorize risks in
the project. You can divide
risk into separate
categories/sources
 Risk Mgt. Steps
Risk Mgt. Steps

How to manage risks in a project?

 Identify Risks 1. Identify Risks

The first thing you need to

do when planning for risk is
to gather the team together
and come up with a list of
Step 1

every possible risk you can

think of.
RBS can help you in this
part
 2. Perform Qualitative Analysis

Once you have got a list of

risks, you need to assign
probability and impact for
Step 2

each risk.
Prioritize Risks based on
their importance
 3. Perform Quantitative Analysis

You can make better

decisions with more precise
Step 3

data – assigning numerical

values for the probability
and impact of each risk
 4. Plan Risk Responses
Plan Risk Responses

Now plan responses to each

risk. This is where you
decide whether to avoid,
Step 4

mitigate, transfer, or
accept… and how will you
do it.
 5. Implement Risk Responses

When triggers happened,

Step 5

take action as planned in

the risk response plan
 6. Monitor Risks

Regularly check the status

Step 6

of the risks, and look for

new potential risks.
Risk Register
 Expected Monetary Value (EMV) of Risk
Expected Monetary Value
 Expected Monetary Value (EVM) of Risk
Expected Monetary Value
 Expected Monetary Value (EVM) of Risk
Expected Monetary Value
 Exercise
Exercise

Expected Monitory Value of Risk

Decision
Tree
Analysis
Decision Tree
Analysis
 Exercise
Exercise

Decision Tree Analysis

 Positive Risks
Positive Risks

Risk Responses for Positive Risks

 Positive Risks

Exploit
Positive Risks

This is when you do everything you can to make sure that you take
advantage of an opportunity. You could assign your best resources to it.
Or you could allocate more than enough funds to be sure that you get the
most out of it.
 Positive Risks

Share
Positive Risks

Sometimes it’s harder to take advantage of an opportunity on your own.

Then you might call in another company to share in it with you.
 Positive Risks

Enhance
Positive Risks

This is when you try to make the opportunity more probable by

influencing its triggers. If getting a picture of a rare bird is important,
then you might bring more food that it’s attracted to.
 Positive Risks

Accept
Positive Risks

Just like accepting a negative risk, sometimes an opportunity just falls in

your lap. The best thing to do in that case is to just accept it!
 Positive Risks

Escalate
Positive Risks

If you found an opportunity that might help your overall company

strategy beyond what your project set out to do, you might escalate that
opportunity to people who could take advantage of it.
 Exercise
Exercise

Risk Responses for Positive/Negative Risks

 Discussion Question
Discussion Question

Can You Identify All Risks in the

Beginning?
 New Risks
New Risks

Some Risks may Show Up Later

 New Risks
New Risks
 New Risks
New Risk
 Regularly Monitor Risks
Monitor Risk
 When Risks Happen
Step 6
 When Risks Happen
Risk Management