IT Project management Topic: Project Risk Management INSTRUCTOR: SHU LIU HIT SCHOOL OF SOFTWARE Fall 2005 All rights reserved
Topic: Project Risk Management IT Project Management INSTRUCTOR: SHU LIU HIT SCHOOL OF SOFTWARE Fall 2005 All rights reserved
IT Projectmanagement Outline a What is Risk? What is Project Risk Management? Project risk management Processes Risk management planning Risk identification Qualitative risk analysis Quantitative risk analysis Risk response planning Risk monitoring and control Project Integration Management 2
Project Integration Management 2 Outline ◼ What is Risk? ◼ What is Project Risk Management? ◼ Project Risk Management Processes: ◼ Risk management planning ◼ Risk identification ◼ Qualitative risk analysis ◼ Quantitative risk analysis ◼ Risk response planning ◼ Risk monitoring and control IT Project Management
IT Projectmanagement What is risk? aa dictionary definition of risk is “ the possibility of loss or injury” The question is how to minimize the possibility of loss or injury a Risk Management Project Integration Management 3
Project Integration Management 3 What is Risk? ◼ A dictionary definition of risk is ◼ “the possibility of loss or injury” ◼ The question is how to minimize “the possibility of loss or injury” ◼ Risk Management IT Project Management
IT Projectmanagement Risk Management a Risk management is an investment There are costs associated with identifying risks analyzing those risks, and establishing plans to mitigate those risks Those costs must be included in cost, schedule, and resource planning a Organizations take risks to benefit from potential opportunities Project Integration Management
Project Integration Management 4 Risk Management ◼ Risk management is an investment ◼ There are costs associated with identifying risks, analyzing those risks, and establishing plans to mitigate those risks. ◼ Those costs must be included in cost, schedule, and resource planning. ◼ Organizations take risks to benefit from potential opportunities IT Project Management
IT Projectmanagement Risk Utility a Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential payoff Risk-averse people do not like to take risks Risk-seekers have a higher tolerance for risk and their satisfaction increases when more payoff is at stake The risk-neutral approach achieves a balance between risk and payoff Project Integration Management
Project Integration Management 5 Risk Utility ◼ Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential payoff ◼ Risk-averse people do not like to take risks. ◼ Risk-seekers have a higher tolerance for risk and their satisfaction increases when more payoff is at stake ◼ The risk-neutral approach achieves a balance between risk and payoff IT Project Management