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Risk ManagementBy Andriy Mudry
VP Delivery / CTO @ Team Technologies
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“The major difference between a thing that might go wrong and a thing that cannot possibly go wrong is that when a thing that cannot possibly go wrong goes wrong it usually turns out to be impossible to get at or repair…”
Douglas Adams
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Initiating Processes
Planning Processes
Executing Processes
Monitoring & Controlling Processes
Closing Processes
Project Integration Management
Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Project Human Resource Management
Project Communication Management
Project Risk Management
Project Procurement Management
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What is a risk ?
Uncertain Event or Condition
Always in the Future
Impact on project
ObjectivesHa s
Causes, Impact and Probability
Negative or Positive Outcome
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What are the Benefits of the Risk Mgmt. ?
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Risk Mgmt. Process
Plan Risk Management *Identify Risks
Perform Qualitative Risk AnalysisPerform Quantitative Risk Analysis
*Plan Risk Responses
Monitor & Control Risks
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Plan Risk Mgmt.
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Risk Breakdown Structure
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Risk Sources
Platforms, environment of development and implementation, tools, security, performance
Technologies
• Government regulations, natural factors, competitors, industrial standards
External Environment
• Terms, Budget, Scope, Business area, Infrastructure, Working processes
Internal conditions (Project, Process):
• Client, Management, Team, Staffing, Professionalism and qualification
People | Communication
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Categorize Cause & Impact
Impact Source Time Budget Quality Scope …
Technologies
External Environment
Internal conditions, Project, Process
+ + +
People, Communication+ +
…
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Probability & Impact Matrix
Scale: 1… 3 | 1… 5 | 1… 10 | …
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Probability & Impact MatrixScale: 1… 3 | 1… 5 | 1… 10 | …
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Impact Definition MatrixCorrelates with:• Probability & Impact Matrix • Categorization of Sources and Influence
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Impact Definition Matrix
Project Objective
Very Low5%
Low10%
Moderate20%
High40%
Very High80%
Cost Insignificant cost increase
<5% cost increase
5-10% cost increase
10-20% cost increase
>20% cost increase
ScheduleInsignificant schedule slippage
Schedule slippage <5%
Overall project slippage 5-10%
Overall project slippage 10-20%
Overall project schedule slips >20%
ScopeScope change barely noticeable
Minor areas of scope are affected
Major areas of scope are affected
Scope reduction unacceptable to the client
Project output is effectively useless
QualityQuality degradation barely noticeable
Only very demanding applications are affected
Quality reduction requires client approval
Quality reduction unacceptable to the client
Project output is effectively unusable
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Give it a Try…
There is a web application – business analytics. Known technologies, DB, 23 main modules, DB architecture is very complex, DB performance is very critical with the strict acceptance criteria. Requirement are 50% defined, very low chances for requirements to be changed, but they should be very clear before the realization. Now is August, release is on April 1. Client wants to have full transparency on progress. There couldn’t be delay with the delivery of the whole scope, it is more important than budget. Test environment is on client’s side, very big load on the network connection (more than the channel is now). Client is very qualified in business area, will be doing UAT. Main expert on the client’s side is Jar Jar Binks. Project team should be 15 people, 5 are missing, they will be not used after project completion. DB architect works on another project 60-70%. Client’s expert Jar Jar Binks hardly uses email and has strong non-English accent.
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Give it a Try…
Challenge:
1. Categorization of Sources and Influence (Matrix)2. Matrix of Probability and Impact3. NB! Matrix of Influence Definition4. Roles and responsibilities. Plan of activities in risks
management.5. Tolerance and watchlist, reserves.
6. Present
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Identify Risks
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Risk Registry
ID Risk Impact Probability Impact Risk Value Notes
1
Application response will be
worse than expected
according to the acceptance
criteria
Architecture redesign – 3 weeks
2Specifications
aren’t confirmed by client
Corresponding time delay, budget
increase
3 … …
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Risk Registry
• ID• Description• Impact• Likelihood• Impact• Score • Status
• Type (risk | opportunity)• Responsible person• Response strategy• Comments (history)
• I use it to track all the action and comments to see the track record of what was going on with this risk
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Keep up giving it a try …
• Identify 10 Risks
•Create Risk Register.
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Qualitative Risk Analysis
Likelihood | Impact | Score
Current Risks & Watchlist
Additional properties
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Qualitative Risk Analysis
ID Risk ImpactProbabilit
y Impact Risk Value Notes
1
Application response will be worse than
expected according to the acceptance criteria
Architecture redesign – 3
weeks3 5 15
2 Specifications aren’t confirmed by client
Corresponding time delay,
budget increase2 1 2
3 … …
Current Risks
Watchlist
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Quantitive Risk Analysis
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Plan Risk Responses
Negative• Avoid• Transfer• Mitigate
Positive• Exploit• Share• Enhance
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Plan Risk Responses
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Plan Risk Responses: Likelihood & Impact Matrix
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Monitor & Control Risks
Planning
Identification
Analysis
Response Monitor & Control Risks
Project Start
Project EndProject PlanChange RequestsRisk RegistryProject Documentation
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Risk Management Rules
Make Risk Management Part of Your Project Identify Risks Early in Your ProjectCommunicate About RisksConsider Both Threats and OpportunitiesClarify Ownership IssuesPrioritize RisksAnalyze RisksPlan and Implement Risk ResponsesRegister Project RisksTrack Risks and Associated Tasks
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Questions ?
“Questions are never indiscreet, Answers sometimes are.”
Oscar Wilde