Real Risk Assessment - Rick Morris

A Real Risk Assessment Rick A A. Morris Morris, PMP PMP, ITIL ITIL, MCTS

Agenda

1. Overview of Current Risk Process 2. Two Constraining Laws 3 How to Capture Real Risk 3. 4. A New Risk Assessment Tool 5. Questions and Answers

Current Process ¾…so we are told: Create WBS

Current Process ¾…so we are told: Create WBS

Identify Risks

Current Process ¾…so we are told: Create WBS

Identify Risks

Qualify Risks

Current Process ¾…so we are told: Create WBS

Identify Risks

Qualify Risks

Quantify Risks

Current Process ¾…so we are told: Create WBS

Identify Risks

Qualify Risks

Quantify Risks

Pick Strategy

Current Process ¾…so we are told: Create WBS

Identify Risks

Qualify Risks

Quantify Risks

Residual Risks

Pick Strategy

What Really Happens PM Creates Plan Create WBS

Identify Risks

Qualify Risks

Quantify Risks

Residual Risks

Pick Strategy

What Really Happens PM Creates Plan

PM Identifies Risks

Create WBS

Identify Risks

Qualify Risks

Quantify Risks

Residual Risks

Pick Strategy

What Really Happens PM Creates Plan

PM Identifies Risks

Create WBS

Identify Risks

PM Fills Out Spreadsheet p

Qualify Risks

Quantify Risks

Residual Risks

Pick Strategy

What Really Happens PM Creates Plan

PM Identifies Risks

Create WBS

Identify Risks

PM Fills Out Spreadsheet p

Qualify Risks

Quantify Risks

Residual Risks

Pick Strategy

Start P j t Project

Why Risk Assessments Fail ¾End up with an ambiguous answer: } }

This project has a risk level of “medium” Your risk assessment score is 4.87

¾Thanks….but now what?

Two Constraining Laws ¾Parkinson’s Law }

Work will naturally fill the timeframe allotted.

¾Murphy’s Law }

Anything that can go wrong will.

Our Dilemmas ¾How to capture risk when our team / sponsor / management does not believe in risk or will not attend risk meetings. ¾How do we account for risk without g Parkinson’s Law. allowing ¾How can I use a risk assessment to help drive the contingency that I need? ¾How can I create a risk assessment that means something?

Simple Approach ¾Set up your Microsoft Project Plan using best practices (i.e. no manually typed dates, everything linked, etc.) ¾Save a copy and “break” your plan. ¾Figure out if you can recover the plan plan. If so, what kind of lead time do you need? ¾If not not, deal with the risk now!

More Involved Approach ¾ Correlate risk score to time and cost guidelines ¾ Utilize real incidents and lessons learned to baseline risk ¾ Create a repository of items to avoid repeatable issues ¾ Create C t a system t that th t updates d t reall time ti as new risks are identified or old risks that are nullified ¾ Approach begins with general risks, p risks then over time, moves to specific

Start General

Second Step ¾How to Capture Real Risk }

Create a real project plan: ƒ No manually entered dates ƒ Everything has a predecessor ƒ Baseline, Baseline, Baseline

Second Step ¾Track variances

Third Step ¾Gather real variances and categorize them. } }

}

Use actual risks and actual impacts Using historical information, correlation can be made between risk and cost/time impacts Instead of a “general” feeling when sales or a customer inquires about the amount of risk, th answer could the ld b be, “I “In project j t A with ith product B, an overrun occurred due to …”

Fourth Step ¾Create new risk assessment utilizing actual risks and actual impacts. Utilize actual variances to determine impacts.

The New Report

The Process Categories / Question weights reviewed periodically and updated

PMO works on the highest risk % categories for mitigation strategies t t i

PM Completes Risk Assessment Tool

Periodic reviews conducted by PM staff

I Impacts t off risks i k compared against baseline and adjusted if necessary

Information is updated in the Risk Assessment tool too

PM assesses probability and impact of each risk

At the completion of the project, the PM fills out Risk Identification Form

Tool establishes amount of risk by utilizing formula listed below

PMO Receives Risk Identification Form Current risks are evaluated and updated, new risks added if necessary

Risk is added to the project

Formula: ((Best Case Actual Risk) + (4 * Most Likely Actual Risk) + (Worse Case Actual Risk)/6) * Probability * Impact * Question Weight Percentage * Category Weight Percentage

Remember the 2 Laws? ¾How do you plan for risk, put it in your project plan, but not give it away to your team?

Questions?