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TSE004-P5 Project Risk Management

The Practical Approach to applying the Six Steps

Course Description

As we tend to learn the hard way, risk is everywhere!  Whether we are involved in one or many projects, our goal is always to reach successful completion, while still maintaining our daily responsibilities.  Not an easy task!  This workshop introduces tools, techniques, and the way to follow a Six Step Process for successfully managing RISK.  The process will lower risk in simple, matrix and cross-functional projects.

This module is intended for anyone who has taken Project Planning and Control (The Foundations of Project Management) program, who needs to follow and implement a systematic approach to Project Risk Management. Although previous attendance at PP&C is recommended, it is not a prerequisite.

The course is designed to follow the Project Risk Management Knowledge Area of PMI’s PMBOK® Fifth Edition (Project Management Body of Knowledge), in a very practical way.  It prepares participants for on-the-job use of the Six Steps of managing risk, while providing the benefit of following the PMI way. 

Upon client request, the workshop can also be taught as a PMP® Preparation session to assist team members wanting PMP Certification. Those involved with PMI and the Project Management Professional – PMP program are awarded 8 PDUs or “Contact hours”.  Our Global R.E.P. number is 1270.

Upon completion of this workshop, each participant will be able to:

Understand and Use the Six Steps to Manage a project's Risks;

  • Develop a Project Risk Management Plan;
  • Use Several Techniques for Risk Identification (including the Risk Triggers);
  • Identify the most Critical Issues facing the Project and Determine the Organizations Risk Tolerance;
  • Quantify the Probability and Impacts of the most Critical Risks;
  • Develop appropriate Risk Responses (Avoidance, Mitigation, Transference, anr/or Acceptance) for Project Risks;
  • Monitor and Control Risks throughout a Project.

Instructional methods for this one-day module are lecture, discussion, exercises, and workshops. Reference to and inclusion of the PMI® PMBOK Fifth Edition are certainly included and applied to real-world situations. Session also has participant discussions and feedback of on-going project situations.  When taught in-house, we gladly include reference and use for our client's internal risk processes and templates.

Course Outline

I.   Introduction and Course Objectives

     A. PMI® as a Resource

     B. The Project “Reality Check”

II. Review of Risk Basics

     A. What is Risk (Both Bad and Good) 

     B. What are Issues (Hint: They’re not risks!) 

     C. Why We Need to Manage Risk

     D. Project Risks vs. Product Risks

     E. The Six Steps to Effective Risk Management

         1.   Plan Risk Management

         2.   Identify Risk

         3.   Perform Qualitative Risk Analysis

         4.   Perform Quantitative Risk Analysis

         5.   Plan Risk Response

         6.   Monitor and Control Risk

III. The Risk Management Plan

     A. Definition

     B. Why must we make a plan to Manage Risks?

     C. Contents of the Plan

     D. Presenting the Plan

IV. Identify Risk

     A. Definition

     B. Identification Methods

        1. Data Gathering

        2. Project Closeout Reports

        3. Checklists

        4. Using Subject Matter Experts (SME)

        5. Project Team Member Experiences

        6. Diagramming Techniques

        7. History - and Learning from it!         

     C. Risk Categories

        1. Technical Risks

        2. Project Management Risks

        3. Organizational Risks

        4. External Risks

        5. Unknown Risks

     D. Risk Types

        1. Business

        2. Pure

        3. Known

        4. Unknown

     E. The Risk Register

     F. Risk Statements

     G. Ranking the Risks

     H. Determining the Risk “Triggers”

        1. Do we always switch to Plan B?

        2. When do we go to “Plan B” = contingency plan?

V. Qualifying the Risk (Probability and Impact)

     A. Perform Qualitative Risk Analysis

     B. Estimating “How likely is the Risk?”

     C. Assess the potential Impact

     D. Calculating Risk Exposure

     E. The Probability-Impact Matrix

     F. Determining your Stakeholder Risk Tolerance

     G. Which risks need additional analysis?

VI. Quantifying the Risk (Running the Numbers)

     A. Quantitative Risk Analysis

     B. Refine our Previous Risk-related Estimates

        1. Decision Tree Analysis

        2. Simulation

        3. Additional Tools

     C. Rules to Determine Probabilities

     D. Risk Referent Level

     E. Sensitivity Analysis

     F. Cost and Budget

VII. Developing Risk Response Plans (What are we going to do?)

     A. Plan Risk Response

     B. Risk Response Strategies

        1. Avoiding Risks

        2. Mitigating Risks

        3. Transferring Risks to Third Parties

        4. Actively and Passively Accepting Risks

     C. Contingency Plans

     D. Positive Risks

         1. Exploit

         2. Enhance

         3. Share

         4. Accept

     E. Secondary and Residual Risks

     F. Project Reserves

VIII. Monitoring and Controlling the Risks

     A. The Importance of Effective Project Communications to Risk Management

     B. Risk Tracking and Control Methods

        1. Risk Triggers

        2. Measures

        3. Job Aides

     C. Are we Creating New Risks?

        1. When we fixed it (Developed risk responses)

        2. Later in the project

     D. How to Effectively Use of the Risk Register

        1. Project Risks

        2. Risk Responses

     E. Effectively performing a Lessons Learned

IX. Conclusion

     A. Review Major Topics/Issues

     B. UPON REQUEST Additional:

        1. PMP Examination Preparation

        2. Specific PMBOK Issues

        3. Sample Questions and Answers

     C. Participants Critique Workshop



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