What is Advanced Project Risk Management?

Rubin Jen, P. Eng, PMP Beyond Execution March 3, 2011

About The Speaker

Rubin is a speaker, writer, teacher and consultant of project management
PM for 15 yrs across several industries Presented at PMI Global Congress, ProjectWorld Toronto, PMI Ottawa Symposium Served on board of directors for the PMI Southern Ontario Chapter from 2005-2007 Project Management training on Risk, Scope and PMP
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Agenda
1. What is Advanced Project Risk Management? 2. How can it help? 3. What should I know? 4. How can I use and implement it?

Whats Your Opinion?

What do you think Advanced Project Risk Management (APRM) is?

Different Ideas around APRM

Risk Database Monte Carlo Qualitative Analysis Opportunity Management Risk Awareness Insurance Bubble Graphs Risk Communication Quantitative Analysis Urgency Predictive Metrics Risk Tolerance Calibration Issues Analysis Lessons Learned Monitoring & Control

Probabilistic analysis

Visualization Attack Risk

Delphi

Risk Breakdown Structure Risk Reporting

Confidence Levels Range Estimates

Audits

Enterprise Risk Management

Risk Project Manager

Common Perception
Most Project Managers would likely consider APRM as deeper in Risk Analysis
Software analysis (Monte Carlo, probabilistic analysis) Quantification, cost analysis Expected Monetary Value, decision trees

What about Risk Planning, Identification, Response and Monitoring & Control?

So, What Is It?

To understand this better, we need to understand what is regular project risk management, as well as what we mean by Advanced

Risk Management
Risk:
The effect of uncertainty on objectives

Risk Management:
The identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events

Project Risk Management

Project Risk Management:
The processes of conducting risk management planning, identification, analysis, response planning and monitoring & control on a project

What is Advanced?
dictionary.com:
1. placed ahead or forward 2. ahead or far or further along in progress, complexity, knowledge, skill, etc 3. pertaining to or embodying ideas, practices, attitudes, etc., taken as being more enlightened or liberal than the standardized, established, or traditional

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Advanced Project Management

The use of tools, techniques and practices that are above the standard, to enable better decisions and more effective project management
Different Different Different Different tools techniques processes level of thinking

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Proposed APRM Principles

1. Further reduction of uncertainty 2. More effective response plans 3. Higher level competency and skills

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Reduction of Uncertainty
Greater clarity and understanding of risks More detailed analysis Uncover hidden information and trends

Better Assessment

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More Effective Response Plans

Improved prioritization Greater option development More effective project management

Better Decisions

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Competency and Skills

Risk ownership Training Risk awareness Increased teamwork, buy-in & performance

Better Performance

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What should I know?

Define Your Objectives

Better decisions
Tools & techniques, processes, decision tree

Better performance
Visualization, buy-in Team awareness

Better assessment
Monte Carlo Timeframe/urgency
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APRM Outcomes
Better Decisions
Increased identification Delphi technique Risk audits Risk breakdown structures Attacking risk Mitigation and contingency plans Decision trees
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APRM Outcomes
Better Performance
Risk management training Team involvement Risk awareness Team meetings Visualization
Visual Ishikawa Risk Technique (VIRT) Heat map/bubble chart

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APRM Outcomes
Better Assessment
Monte Carlo simulation Increased subjective range assessment Confidence level estimation Range estimates Probabilistic/statistical analysis Weighted scoring Urgency
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Implementation Costs
Risk management has been a difficult realm to show ROI Some risk tools & techniques can cost a lot but provide very little improvement in return Its not just about software

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How Can I Use It?

Choosing APRM
Which parameters provide the maximum effectiveness for the minimum amount of time? (biggest bang for the buck?)
1. Techniques that are simpler and practical 2. Knowledge that can be easily shared and explained to others 3. Techniques that can involve others 4. Visualization 5. Better risk prioritization
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Better Decision Techniques

Collaborative Techniques Prioritization Knowledge Transfer Simple Technique Graphical

Increased identification Delphi technique Risk audits Risk breakdown structures Attacking risk

Mitigation/contingency plans
Decision trees

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Better Performance Techniques

Collaborative Techniques Prioritization Knowledge Transfer Simple Technique Graphical

Training Team involvement Risk awareness Team meetings VIRT

Heat map/bubble chart

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Better Assessment Techniques

Collaborative Techniques Prioritization Knowledge Transfer Simple Technique Graphical

Monte Carlo Increased range Confidence level Range estimates Probabilistic analysis

Weighted scoring
Urgency

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Implementing APRM
Understand and assess risk stakeholders
Champions By-standers End users

Continual education and communication See results <-> creates buy-in Create mini case studies of successes Know each techniques implementation costs
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Are We Done Yet?

Summary
There are a number of ways to be "advanced" but don't confine yourself to simply analysis tools Utilizing APRM is like a project management process:
Understand what your needs are, then choose an appropriate technique(s)

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Contact Information
Name:
Email: Phone:

Rubin Jen, P. Eng, PMP

rubin.jen@beyondexecution.com (416) 618-1734

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