Risk Management

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 Definition of Project Risk
Management Process
• Risk Management (RM): is a structured
way to think about risk and how to deal
with.
• Risk Management (RM): is the systematic
process of planning , identifying,
analyzing, responding to, and monitoring
project risk.

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 Objectives of Project RM
Process
• RM aims to encourage the project
team to take appropriate measures
to:
• Minimize the probability and impact
of adverse (negative) events on
project scope, cost, schedule , and
quality.

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 Objectives of Project RM
Process

• Maximize the opportunities to

improve the project ꞌs objectives with
lower cost, shorter schedules,
enhanced scope and higher quality.
• Minimize management by crisis.

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 Sequences of Project RM
• Risk Management Process Include:
• 1- Risk Management Planning.
• 2- Risk Identification.
• 3- Qualitative Risk Analysis.
• 4- Quantitative Risk Analysis.
• 5- Risk Response.
• 6- Risk Monitoring.
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 Sequences of Project RM

• 1- Risk Management planning : How to

execute the risk management
activities for a project.

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 Sequences of Project RM
• 2- Risk Identification : Determining
which risks might affect the project
and documenting their
characteristics .
• What risks might negatively or
positively affect the project
objectives?

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 Sequences of Project RM
• 3- Qualitative RISK Analysis :
Prioritizing risks for subsequent
further analysis or action by
assessing and combining their
probability of occurrence and
impact.
• - Which risks are most important?

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 Sequences of Project RM
• 4- Quantitative Risk Analysis:
• Analyzing probabilistically the effect
of the identified risks on the overall
project objectives.
• - How could these risks affect the
overall outcome of the project in
probabilistic terms of cost and
schedule?
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 Sequences of Project RM
• 5- Risk Response :
• Developing options and actions to
enhance positive and reduce
negative impacts on project
objectives.
• - What can be done about risks?

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 Sequences of Project RM
• 6- Risk Monitoring :
• Tracking identified risks, monitoring
residual risks, identifying new risks,
executing risk response plans, and
evaluating their effectiveness
throughout the project.
• - Having taken action, how did the
responses effect change , where is the
project now.
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 Characteristics of Project
RM
• It is a continuous process throughout the
project.
• It should be documented so it can be
reviewed, the assumption can be examined,
and the reasons for particular decision can
be identified.
• The ultimate aim is to manage risk, not
simply to analyze it, so it must lead to
implementation of actions to deal with the
identified risks.
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 Characteristics of Project
RM

• It is most effective when first performed

early in the life of the project and is a
continuing responsibility throughout the
project.

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 Project Risk Management
Team (PRMT)
• PRMT : It is the core group performing,
updating, and reviewing risk management
activities.
• The PRMT should comprise a group of
project personnel from design,
construction, project management , and
the different functional units involved in
the project.

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 Project Risk Management
Team (PRMT)
• - The PRMT should collectively have all
the expertise required to identify , assess ,
and respond to project risks.
• - Representatives from other project
sectors , if any, may be invited to PRMT
meetings to ensure that all parties are fully
informed, and thus avoid surprises.

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 Key Success Factors for
RM
• Supports the honest, realistic, and
open recognition of risks even if they
indicate problems with the project.
• Encourage talking about risks
realistically with no penalty for
people who do so openly within the
RM process.

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 Key Success Factors for
RM

• Promotes discussion in an
appropriate atmosphere where there
is no enforcement of bureaucratic
hierarchy in meeting where risk
identification and assessment are
discussed.

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 Key Success Factors for
RM

• Collecting realistic and high-quality

data about risks.

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 Quiz (1)

• Discuss two different

risk strategies?

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 Quiz (1)

• Discuss the different

characteristics of
risk?

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 Quiz (2)

• What are the

objectives of the
project RM process?

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 Quiz (2)

• What are the

sequences of the
project RM process?

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 THANK YOU
Prof. HOSSAM HOSNY

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