1

UNDERSTANDING
PROJECT
MANAGEMENT
A PRACTICAL
GUIDE
SECOND EDITION
Chapter 9
Risk Planning

Professor:
Term:

© 2021 Dave C. Barrett

 2

The Project Life Cycle (PLC)

Initiating Planning Executing Closing
Phase Phase Phase Phase
Ch 3. Stakeholder Planning
Ch 11.
Executing, Monitoring, and
Ch 4. Scope Planning Controlling the Plan

Ch 5. Schedule Planning

Ch 2. Ch 6. Budget Planning Ch 12. Ch 15.

Starting the Managing Disruptions to the Closing the
Project Ch 7. Project Team Planning Plan: Issues and Change Project

Ch 8. Quality Planning
Ch 13.
Managing the Human Resources
Ch 9. Risk Planning
Aspects of the Project

Ch 10. Communications Planning

Ch 14. Project Procurement

© 2018 Dave C. Barrett
 3

Agenda

What Can Go Wrong During the Project?

How Can the Risks Be Managed?

© 2021 Dave C. Barrett

 What Can Go Wrong During
4

the Project?
• The first step is to consider everything that could possibly go wrong

• Risks may be identified through discussions with various stakeholders,

review of the project scope, and research into previous projects

• Each risk identified should be assessed as follows:

• How likely is it that this risk will occur?
• If it does occur, what will be the impact on the project?

© 2021 Dave C. Barrett

 Describing the Probability
5

and Impact
• The probability and impact may be described qualitatively:
• e.g. “High”, “Medium”, “Low”
• Or they may be described quantitatively:
• e.g. 10% (probability) or $10,000 (impact)
• This course combines qualitative and quantitative as follows:
Probaility Probability Factor Impact Impact Factor
Likely 0.8 Critical 10 For each risk:
Possible 0.5 Severe 8 Risk Score =
Unlikely 0.2 Moderate 5 Probability Factor X
Low 2 Impact Factor
© 2021 Dave C. Barrett
 6

Identifying and Analyzing Project Risks

© 2021 Dave C. Barrett

 7

Link to YouTube
© 2021 Dave C. Barrett
 Identifying and Analyzing
8

Project Risks
• The project team identifies as many risks as possible
• Using the probability and impact tables, a probability
factor and risk factor is determined resulting in a risk
score for each risk
• This information is placed in the Risk Register

Identify and analyze the project risks according to their

probability and impact.
© 2021 Dave C. Barrett
 9

How Can the Risks Be Managed?

• In order to address risks before they occur, certain actions may be
taken – these are called risk response strategies.
• What are the five different types of risk response strategies?

• Any risk that remains after performing the risk response strategy is
called residual risk

• The action to be taken if the risk actually occurs is called the

contingency plan
© 2021 Dave C. Barrett
 10

Creating Risk Response and Contingency Plans

© 2021 Dave C. Barrett

 11

Link to YouTube
© 2021 Dave C. Barrett
 Creating Risk Response and
12

Contingency Plans

• Sophie adds the following to the Risk Register:

• A complete description of the risk response plan for each risk

• A complete description of the contingency plan for each risk

including the conditions that would trigger the contingency plan

Determine the risk response and contingency plan for each

risk.

© 2021 Dave C. Barrett

 13

Key Terminology

• Contingency Plan
• Residual Risk
• Risk
• Risk Register
• Risk Response Plan

© 2021 Dave C. Barrett

 14

References
• “Agenda” Slide
• Image: “thunderstorm-lighening-cloud-gray” by Clker-Free-Vector-Images is licensed by Pixabay
• Image: “pressure-detection-system” by OpenClipart-vectors is licensed by Pixabay

© 2021 Dave C. Barrett