Project Risk Management
Course Handbook
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INDEX
Introduction ........................................................................................................................ 4
Objectives of Learning Programme .............................................................................. 4
Introduction to Project Risk Management ..................................................................... 5
MAIN HANDBOOK ............................................................. Error! Bookmark not defined.
Section 1 – Plan Project Risk Management ........................ Error! Bookmark not defined.
Purpose, Objective and Scope ...................................... Error! Bookmark not defined.
Purpose....................................................................... Error! Bookmark not defined.
Objective ..................................................................... Error! Bookmark not defined.
Scope .......................................................................... Error! Bookmark not defined.
Representation Profile (Participants) ............................. Error! Bookmark not defined.
Assumptions.................................................................. Error! Bookmark not defined.
Risk Categories ............................................................. Error! Bookmark not defined.
Definition of Probability & Severity Measurements Including MatrixError! Bookmark not defined.
Risk Ranking ................................................................. Error! Bookmark not defined.
Section 2 – Identify Risks .................................................... Error! Bookmark not defined.
Risk Area ...................................................................... Error! Bookmark not defined.
Describe Risk ................................................................ Error! Bookmark not defined.
Determine the Cause of the Risk ................................... Error! Bookmark not defined.
Determine the impact of the Risk................................... Error! Bookmark not defined.
Section 3 – Perform Risk Analysis ...................................... Error! Bookmark not defined.
Measure Inherent Risk .................................................. Error! Bookmark not defined.
Describe current Risk Controls ...................................... Error! Bookmark not defined.
Determine Risk Controls Effectiveness.......................... Error! Bookmark not defined.
Measure Residual Risk ................................................. Error! Bookmark not defined.
Section 4 – Mitigate Risks ................................................... Error! Bookmark not defined.
Describe Preventive Mitigation ...................................... Error! Bookmark not defined.
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Describe Contingent Mitigation ...................................... Error! Bookmark not defined.
Measure Mitigated Risk ................................................. Error! Bookmark not defined.
Section 5 – Manage Implementation of Mitigation Actions .. Error! Bookmark not defined.
Determine Cost of Mitigation ......................................... Error! Bookmark not defined.
List Monitoring Mechanisms / Comments ...................... Error! Bookmark not defined.
Determine Timeframe for Implementation ..................... Error! Bookmark not defined.
Determine Responsibility for Implementation................. Error! Bookmark not defined.
Section 6 – Reporting of Project Risk Management ............ Error! Bookmark not defined.
Work in Progress Documentation .................................. Error! Bookmark not defined.
Risk Graph .................................................................... Error! Bookmark not defined.
Risk History ................................................................... Error! Bookmark not defined.
Governance Requirement Documentations ................... Error! Bookmark not defined.
Process Questions & Definition ..................................... Error! Bookmark not defined.
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Introduction
Project Risk Management is the activity of identifying, assessing and prioritising risks
(defined as the effect of uncertainty on achieving objectives, whether positive or negative)
followed by coordinated and economical application of resources to minimise, monitor, and
control the probability and/or impact of respective events or to maximise the realisation of
opportunities.
Risks can come from uncertainty in financial markets, project failures (at any phase in
design, development, production, or sustainment life-cycles), legal liabilities, credit risk,
accidents, natural causes and disasters as well as deliberate attack from an adversary, or
events of uncertain or unpredictable root-cause.
Several risk management standards have been developed including the Project
Management Institute, the National Institute of Standards and Technology, Actuarial
Societies, and ISO standards.
Methods, definitions and goals vary widely according to whether the risk management
method is in the context of project management, security, engineering, industrial processes,
financial portfolios, actuarial assessments, or public health and safety.
The strategies to manage risk typically include transferring the risk to another party, avoiding
the risk, reducing the negative effect or probability of the risk, or even accepting some or all
of the potential or actual consequences of a particular risk.
Certain aspects of many of the risk management standards have come under criticism for
having no measurable improvement on risk, whether the confidence in estimates and
decisions seem to increase.
This Handbook has been compiled by VM Services (Pty) Limited to combine the most
appropriate tools utilised in the Industry and successfully applied in major projects in mining
and construction.
The methodology described in this handbook allows for the application of Project Risk
Assessments for small and large project including Enterprise / Strategic Risk Management.
Objectives of Learning Programme
The Learner will be able to provide a robust approach to risk management that:
•
embeds Project Risk Management Principles;
•
aligns with the principles of recognised Project Management Risk Assessment
techniques;
•
reflects best practice within the context of optimising achievement of Projects
objectives;
•
is demonstrable across all areas of Projects Management; and
•
recognises that risk management is an integral part of good management and of
execution planning.
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Introduction to Project Risk Management
This training course sets out the risk management process that can be applied to most
projects, small or big, and provides the basic principles of managing risks to secure
successful project execution.
It also provides the requirements for identifying, recording, monitoring, reviewing and
reporting of risk management activities and aims to achieve the following objectives:
•
to ensure that the project team have identified and assessed all project related risks,
threats and opportunities, in a consistent and demonstrable way;
•
to ensure that the project team have implemented effective control measures which
continue to provide appropriate mitigation or avoidance of risks, or realisation of
benefits from opportunities
•
that risks are being appropriately managed throughout the project management
program; and
•
to ensure that the project team applies the relevant governance standards required
within the organisation.
By risk, we mean the uncertainty of something happening that will impact on our objectives.
In this, we include positive impacts that can be achieved by exploiting opportunities, as well
as negative impacts that might materialise.
A risk should not be confused with an “issue”. Risk and issue are two words that are often
confused when it comes to their usage. Actually there is some difference between them.
A risk is an uncertain event that has a probability associated with it. An issue does not have
this attribute.
Issues are problems right now that the project team has to do something about. Think of risk
management as a proactive activity, while issue management is reactive.
Therefore an issue can also be defined as a hazard. In a HAZOP study we identify the
hazard and measure the potential impact but not the probability of occurrence since it is
already present in the design and / or selected environment.
Should an issue / hazard arise during a Risk Assessments it is advised to apply the “parking”
method for later investigations outside of the actual risk assessment. (i.e. HAZOP study)
Full Handbook available during training
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