SLIDE 1 CONTENT OVERVIEW

Understanding Risk
Risk classification
What is Risk management ?
Risk management process

SLIDE 2 WHAT IS RISK ? WHAT ARE ITS TYPES ?

Risk definition

The likelihood (probability) of occurrence of an undesirable event that will

have an impact (positive or negative) on objectives.

Positive risk

Definition: Positive Risk

Positive risk is the chance that your objectives will produce too much of a good
thing. Positive risks are deemed as undesirable despite being positive at face
value.
A project management team controls the risk that a project will go over budget
and the positive risk that the project will be under budget.

Being under budget is a good thing because the company saves money.
However, in the context of project management it's considered a planning error.
You didn't really save money the project manager overestimated the project.

Negative risk

Negative risks are unwanted and potentially can cause serious problems and
derail the project, positive risks,
SLIDE 3 WHAT IS RISK MANEGEMENT ? WHAT IS ITS NEED ?
1.It is a systematic method of identifying, analysing, evaluating, treating, and
monitoring the risks involved in any activity or process.

2.It is a methodology that minimize the risks of not achieving the objectives.

3.Factors which inherit risk management :

>High levels of disputes and litigation.
>Pressure to produce a high return on funds invested.
>Will to save time and money.
>Importance of health and safety provision
SLIDE 4 STAGES IN RISK MANAGEMENT

Risk identification
Risk assessment
Risk evaluation
Treatment and monitoring
SLIDE 5 RISK IDENTIFICATION

Internal risks
External risks

SLIDE 6 AND 7 RISK ASSESSMENT

RISK MAGNITUDE : SEVERITY X LIKELIHOOD

SLIDE 8 RISK EVALUATION

1. Risk evaluation involves comparing the level of risk found during the analyses
process with previously established risk criteria, and deciding whether
these risks require treatment.

2. The result of the risk evaluation is a prioritized list of risks that require further
action.

3.In general, this step is about whether risks are accepetable or require treatent
SLIDE 9 RISK TREATMENT AND CONTROLLING

Mitigate
In this type of risk response strategy, you try to minimize either the probability
of the risks happening or the impact.

For example, you find that a team member from your team may leave for a
certain duration during the peak of your project. Therefore, to minimize the
impact of his absence, you identify another employee with similar
qualifications from your organization and inform his boss that you may need
him for your project for a period of time.
Transfer
In transfer risk response strategy, you transfer the risk to a third party to
manage it. Please note that the transfer of risk does not eliminate the risk; it
only transfers the responsibility of managing the risk to the third party.

For example, in your project there is a task to install some equipment and you
dont have much experience in this type of task. Therefore you ask a
contractor to come and install it and sign a fixed price contract.

In this way you have transferred the responsibility of the whole task to a third
party, and now it is his responsibility to complete the task within the agreed
time and cost.

Avoid
Here you try to eliminate the risk or its impact on your project objective. You
do this by either changing your project management plan, by making some
changes to the project scope, or by changing the schedule.

For example, you observe that during certain periods of your project there is a
chance of rain and you have some work planned outdoors at that time.
Therefore, to avoid this risk, you move these activities to some other time to
avoid the effect of rain.

Accept
This risk response strategy can be used with both kinds of risks, i.e. either
positive risks or negative risks.

Here you dont take any action to manage the risk but you do acknowledge it.

You can accept the risk either by actively acknowledging it or passively

acknowledging it.

In active acceptance you keep a separate contingency reserve to manage the

risk if it occurs, and in passive acceptance you do nothing except note down
the risk.