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EdrawMindHow to become an excellent IT project manager 06 Project Risk Management
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How to become an excellent IT project manager 06 Project Risk Management
Project risk management is like managing life, family, workplace, and interests. It starts with the basic concepts and definitions of risks, processes, and various strategies, allowing us to face our work, life, and ideals more actively. Create excellence in the workplace, family happiness, and personal happiness. Now society has given us the greatest opportunities and the greatest learning platform. As long as you work hard, you can always live it up!
Edited at 2021-01-31 12:08:16- One Hundred Years of Solitude Character Relationship Chart
One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
- One Hundred Years of Solitude Character Relationship Chart
One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
- Project Management Process Template
Project management is the process of applying specialized knowledge, skills, tools, and methods to project activities so that the project can achieve or exceed the set needs and expectations within the constraints of limited resources. This diagram provides a comprehensive overview of the 8 components of the project management process and can be used as a generic template for direct application.
How to become an excellent IT project manager 06 Project Risk Management
- One Hundred Years of Solitude Character Relationship Chart
One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
- One Hundred Years of Solitude Character Relationship Chart
One Hundred Years of Solitude is the masterpiece of Gabriel Garcia Marquez. Reading this book begins with making sense of the characters' relationships, which are centered on the Buendía family and tells the story of the family's prosperity and decline, internal relationships and political struggles, self-mixing and rebirth over the course of a hundred years.
- Project Management Process Template
Project management is the process of applying specialized knowledge, skills, tools, and methods to project activities so that the project can achieve or exceed the set needs and expectations within the constraints of limited resources. This diagram provides a comprehensive overview of the 8 components of the project management process and can be used as a generic template for direct application.
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- Outline
How to become an excellent IT project manager 06- project risk management
1. Key points of project risk management
1. What are the characteristics of risks?
2. What are the various classification methods and classifications of risks?
3. The definition of risk and the relationship between risk tolerance and income, investment, status, and resources.
4. What are the processes of project risk management?
5. The content of the risk management plan and related terms involved, such as checklists, contingency reserves, etc.
6. The main content of risk identification and the main methods of risk identification, such as Delphi method, brainstorming method, SWOT method (competitive advantages/competitive disadvantages/opportunities/threats) evaluation method, diagramming technology, etc.
7. Qualitative and quantitative risk analysis methods, such as risk probability and impact assessment, risk and impact matrix, etc., as well as related terms involved, such as EMV (Expected Monetary Value), Monte Carlo analysis, etc.
8. What are the risk response strategies?
2. Characteristics and classification of risks
definition
Refers to the combination of the possibility and consequences of a specific dangerous situation.
feature
1. The objectivity and universality of existence.
2. The contingency of a specific risk.
3. The inevitability of a large number of risks.
4. Variability of risk.
5. Diversity and multi-level risk.
attributes of risk
1. Randomness
The occurrence and consequences of each specific risk are accidental, but the occurrence of a large number of risks conforms to statistical laws.
2. Relativity
The same risk has different impacts on different entities.
Relativity is reflected in:
The greater the return, the greater the risk tolerance;
The smaller the return, the smaller the risk tolerance.
The more you invest, the smaller your risk tolerance;
The less you invest, the greater your risk tolerance.
The higher the status and the more resources, the greater the risk tolerance;
The lower the status and fewer resources, the smaller the risk tolerance.
3. Variability
Changes in the nature of risk
Changes in Risk Consequences
New risks emerge.
The overall goal of risk management
Minimize the negative impact of risks on project goals, seize the opportunities brought by risks, and increase the benefits of project stakeholders.
Risk classification: There are many classifications based on different classification perspectives.
Classification by risk consequences
pure risk
Risks that do not bring any opportunities or benefits
Two possible consequences: causing loss and not causing loss.
speculative risk
It may bring opportunities and gain benefits, but also implies threats and risks of losses.
Cause loss, not cause loss, gain benefit.
Pure risks and speculative risks can transform into each other under certain conditions, and project managers must avoid speculative risks transforming into pure risks.
Classification by risk source
natural risks
Natural risk refers to the risk of property damage or casualties caused by natural forces.
man-made risk
It refers to the risks caused by human activities and can be subdivided into behavioral, economic, technical, political and organizational risks.
By risk manageability
Manageable risk
unmanageable risk
by predictability
Known risks
Predictability risk
Unpredictable risks
Unforeseen risks, also known as unknown risks and unrecognized risks, are generally the result of external factors.
3. Risk management process
The process steps are as follows
1. Preparation of risk management plan
2. Risk identification
3. Qualitative risk analysis
4. Quantitative risk analysis
5.Preparation of risk response plan
6. Risk monitoring
Develop a risk plan
Definition: Used to determine the activities planned and arranged for project risk management, which is the primary task of project risk management.
Risk Identification
Identify existing risks to clarify the factors that pose threats to the project so as to formulate plans and strategies to avoid and reduce risks.
Qualitative risk analysis
An assessment process that identifies the likelihood and impact of risks, prioritizing potential impacts on project objectives and laying the foundation for quantitative risk analysis.
The qualitative risk analysis process requires the use of the results of the risk management planning process and the risk identification process. After the qualitative risk analysis process is completed, you can enter the quantitative risk analysis process or directly enter the risk response planning process.
Quantitative risk analysis
After qualitative risk analysis, in order to further understand how likely the risk is to occur and how serious the consequences are, quantitative analysis is needed to analyze the degree of overall analysis of the project.
Strategies to deal with project risks
Common: mitigation, prevention, transfer, avoidance, acceptance and backup measures, etc.
For each risk, the strategy or combination of strategies that is most likely to produce an effect should be selected, and the most appropriate response method should be selected through risk analysis tools (such as decision tree analysis methods).
4. Develop a risk management plan
Compilation basis
environmental and organizational factors
organizational process assets
project scope statement
Project Charter
project management plan
Formulation: usually in the form of a meeting.
should include
Introduction
Risk summary
risk management tasks
Organization and Responsibilities
Budget
Tools and techniques
Risk items to be managed, etc.
Technologies and methods are
risk checklist approach
A risk identification check chart prepared based on similar project information and other relevant information.
Generally arranged by risk source.
Advantages: fast and simple;
Disadvantages: Idle by project comparability.
Can contain a variety of content
Reasons for success or failure of previous projects
Planning results for other aspects of the project
scope
cost
quality
schedule
Procurement and Contracts
Human resources and communication, etc.
Project product or service description
Project team member skills
Available resources for the project, etc.
Risk Management Form
Document basic information for managing risk.
A systematic way of recording risk information and tracking it to the end
Project risk management software
Risk database schema
Indicates how to identify risks and related information, organize risk information, and allow workers to query, track status, sort, and generate reports. A mobile APP software can be developed to facilitate filling in tasks, risks, and solutions.
5. Risk identification
definition
Determine the sources of risks, the conditions that generate them, describe their risk characteristics, determine which risk events may affect the project, and record them in documents.
main content
Identify and determine potential project risks.
Identify the main factors causing these risks.
Identify possible consequences of risks.
Features
Everyone participates
Systematic
Covering the entire life cycle of the project
Dynamic
Risk identification is not a one-time event; it is ongoing and changing during planning, implementation and closing.
information dependence
Whether the risk information is comprehensive, timely and accurate determines the quality of risk identification and the reliability and accuracy of the results.
Tools and techniques
Document review
Conduct a systematic and structured review of project documents such as project plans, assumptions, previous project documents, and other information.
information collection technology
Delphi method
It is essentially a letter inquiry method of anonymous feedback. It is a method for experts to reach a consensus on a certain topic.
Risk management experts participated in this activity anonymously. The host used a questionnaire to ask for a brief introduction to the risks of important projects, and then comprehensively organized, summarized and counted the opinions, and then anonymously fed back to the experts, solicited opinions again, concentrated, and Give feedback again until stable opinions are obtained.
Advantages: Helps to reduce data bias and avoid personal factors from adversely affecting the results of project risk identification.
Brainstorming
Brainstorming is a process in which participants can speak freely, fully communicate, inspire each other, and generate a large number of creative opinions by creating a non-critical and free meeting environment.
Focusing on a common goal, participants build their own opinions based on others' opinions.
Give full play to collective wisdom and improve the accuracy and efficiency of risk identification.
interview method
Risk interviews by interviewing experienced project participants, stakeholders, or experts on a particular issue can help identify risks that are not identified in conventional methods.
Pre-project interview records obtained during project feasibility studies are often also good material for identifying risks.
SWOT method
Strengths, weaknesses, opportunities, threats;
From multiple angles and aspects, we conduct a comprehensive analysis of the project's internal strengths and weaknesses as well as the project's external opportunities and threats, and then identify the risks of the project.
checklist
Commonly used tools for recording and organizing data in project management. When conducting risk identification, many potential risks that may occur in the project are listed on a table for identification personnel to check to determine whether there are risks listed in the table or similar risks in the project.
What-if analysis
Conceived and formulated based on a set of assumptions, assumptions, or hypotheses. What-if analysis is a technique for hypothesizing the validity of fake cigarettes.
Identify risks to the project caused by unclear, imprecise, inconsistent, and incomplete assumptions.
Illustration technology, etc.
Diagramming techniques mainly include cause-and-effect diagrams, system or process flow diagrams, etc.
6. Qualitative risk analysis
Tools and techniques mainly include
Risk probability and impact assessment
Probability and Impact Matrix
Tracking of the top ten risk matters
Risk data quality analysis
Risk classification
Risk Urgency Assessment
1. Risk probability and impact assessment
Risk probability refers to the possibility of risk occurring
Impact assessment is the impact that a risk will have on project objectives once it occurs.
Target specific risk events, not the entire project.
Probability and consequence analysis helps identify risks that need priority management.
It can be described in qualitative terms such as extremely high, high, medium, low, and very low.
2. Probability and Impact Matrix
A risk rating matrix that combines probability and impact scaling.
High probability and high impact risks may require further analysis, including quantitative and active risk management.
When assessing risk levels, each risk must have its own matrix and risk scale.
3. Tracking of the top ten risk matters
Frequently used qualitative risk analysis tool. Maintain risk awareness throughout the project.
The management department regularly reviews the most significant risk items of the project together with users, summarizing the risk source status, ranking changes, the number of times the list appears within a period of time, and a summary of the progress made in solving this risk during the last review.
4. Risk data quality analysis
Qualitative risk analysis needs to be credible, using accurate and unbiased data.
A technique for assessing the usefulness of data about risk to risk management.
This includes checking how well people understand the risks, as well as the accuracy, quality, reliability and completeness of risk data.
5. Risk classification
Classify project risks by source of risk (using a risk breakdown structure), affected project areas (using a work breakdown structure), or other classification criteria (such as project phase) to identify the project areas most affected by uncertainty.
Segmenting risks based on common root causes helps develop effective risk responses.
6. Risk Urgency Assessment
Risks that require response measures in the near future;
The time required to implement risk measures, risk signs, warnings and risk levels can all be used as indicators to determine risk priority or urgency.
7. Quantitative risk analysis
definition:
Risks that are ranked first in the qualitative risk analysis process as having a significant impact on project requirements are analyzed and assigned a numerical value to the risks.
It is a quantitative method for making decisions under uncertainty, using technologies such as Monte Carlo simulation and decision tree analysis.
Analytical Tools Technology
1. EMV
A statistical concept used to calculate the average result (and analysis under uncertainty) that will or will not occur in a certain situation in the future.
The expected monetary value of an opportunity is generally expressed as a positive number, while the expected monetary value of a risk is generally expressed as a negative number. The value of each possible outcome is multiplied by its probability to obtain the expected monetary value.
The expected profit and loss in each case is:
EMV= sum of Pi *Xi i= 1 to m)
2. Calculate analysis factors
Typically describing risk probabilities or outcomes in terms of high, medium, or low, a calculated risk factor is a number that represents the overall risk of various specific events (based on their probability of occurrence and consequences for the project.) This technique uses probability and impact A matrix that shows the probability or likelihood of a risk occurring, and the impact or consequences of the risk.
3. PERT
Program/Project Evaluation and Review (Tcehniue, program evaluation technology) is a technology that uses network analysis to formulate plans and evaluate plans. It can coordinate the various processes of the entire plan, rationally arrange manpower, material resources, time, and funds to accelerate the completion of the plan.
4. Monte Carlo analysis
Statistical Experimental Methods. It is a quantitative analysis method that uses probability and mathematical statistics methods to predict and study the impact of various uncertain factors on the project and analyze the expected behavior and performance of the system.
It is a commonly used simulation analysis method. It randomly selects samples from each uncertainty factor, performs a calculation on the entire project, and repeats it many times to simulate various uncertainty combinations and obtain various combinations. There are many results below.
Through statistics and processing of these result data, the pattern of project changes can be found.
For example: Arrange these result values from large to small, count the number of times each value appears, and use these values to form a frequency distribution district and county, so that you can know the possibility of each result occurring.
Based on statistical principles, the data is analyzed to determine the maximum value, minimum value, average value, label difference, variance, skewness, etc. This information can provide a more in-depth and quantitative analysis of the project and provide basis for decision-makers.
8. Risk response strategies
Three strategies are usually used to deal with risks or threats that may have a negative impact on project goals. The strategies are avoidance, transfer, and mitigation.
Use three strategies to deal with risks that may have a positive impact on project goals: develop, share, and improve.
Risk avoidance
It refers to avoiding risks by changing the project when the potential threat of project risks is extremely likely and will bring serious consequences, which cannot be transferred and cannot be tolerated.
transfer risk
The most frequently used method in projects is to transfer project risks to third parties through means such as partners, project outsourcing and guarantees.
Mitigate risk
Mitigate risks by means of mitigation or prediction, reduce the possibility of risk occurrence or reduce the impact and scope of adverse consequences after the risk occurs, and try to reduce the probability or consequences of adverse risk events to an acceptable critical value.
Positive Impact Strategies
If an organization wants to ensure that opportunities are realized, it can adopt a pioneering strategy for risks that have a positive impact.
The goal is to eliminate the uncertainty associated with a specific positive risk by ensuring that the opportunity is certain to materialize.
Positive risk sharing refers to the allocation of responsibility for risks to third parties who have the best opportunity to obtain benefits for the project, including establishing risk sharing partnerships.
Enhancement strategy: Aims at changing the “size” of opportunities by identifying and maximizing the drivers of positive risks by increasing their probability or their positive impact.