We are excited to present the New Vue-Matrix Project Risk Management Software overview video. A good Project Manager knows that Risk Management in projects is incomplete without team involvement.
The primary objective of risk management and fratricide avoidance is to help units protect their combat power through risk reduction, enabling them to win the battle quickly and decisively with minimum losses.
During mission execution, leaders must ensure their subordinates properly understand and execute risk management controls. A thoroughly developed, clearly communicated, and completely understood plan helps minimize fratricide risk. Confirmation briefs and rehearsals are primary tools for identifying and reducing fratricide risk during the preparation phase. IntroductionA better understanding of risk management processes and practices within a government agency is crucial for enhancing the project delivery process and for implementing formally risk management.
The California Department of Transportation (Caltrans), a leading authority in public transportation projects in the US, has used basic project management principles along its statewide Districts offices.
The term quantitative risk analysis is merely described, lacking a sound description of the tools and methodologies that have been in place and use in the industry for many years and even with other government agencies around the world. Cost overruns caused by a lack of using risk management in the practice for infrastructure and transportation projects, has been mentioned in the literature for many years. However, only few examples of how risk management can be use in the real life are available, including how can a risk team be formed and how to educate the team for performing a sound and trusted risk management exercise.2.
The purpose of the study, roles and responsibilities, the scope of the Risk Register, risk identification, analysis methods, implementation period, schedule and budget allocation need to be defined with the plan.
Risk manager roleThe relevance that a risk manager plays during the implementation phase is crucial for the success of the study.
For the above reasons, it is extremely important to develop project communication plans, so the right stakeholders can be identified, together with investigating the best ways of communication with them critical project information for decision making. In this case, a worst and best case scenarios are asked from the SMEs for defining a minimum and a maximum value of the risk. In some cases, the SMEs are reluctant to participate and optional methods should be place on the table by the risk manager for getting the opinion needed from the SME. Figure 4 illustrates an example of combining three differing opinions, but where expert A is given twice the emphasis of the owing to the greater experience of that expert (Vose, 2008).It is relevant to notice that not all the SMEs are willing to participate actively in a risk management exercise at the first time, especially if they have no been exposed before into one. If SMEs are not part of the risk management study, the results will not be trusted, causing this a failure of the process, the PM and the team.7.
Eliciting the risk team members can be such a critical milestone for success or failure for the rest of the risk management process and the project itself. Risk identification, analysis and responseThe whole process of risk management was implemented for three different projects. Regardless of the project scope, cost, schedule, location, type of funding, etc; the same steps were followed in order to determine the overall risk cost 8cost contingency). Figure 10 shows the critical risks obtained for each project once the qualitative analysis was performed. It was a common practice at Caltrans to assign a merely flat rate for risk contingency, without referring to specific project risks or by justifying the percentage upon a formal risk management study.For each project, a set of risk responses were developed by the RMT and placed with the Risk Register.
In other words, if the risk has a source in construction, then the best suitable risk owner should come from that division.The whole risk management implementation, including the risk identification, analysis and response was conducted in three meetings with the RMT. The most critical of the meetings is the planning meeting; which usually includes educating the RMT. Risk monitoring and controlRisk monitoring and control has been mentioned as one of the most common failures of risk management. Risk metrics are fundamental for determining and assessing how risk management is contributing or enhancing the project delivery process. For example, in can be assumed that the baseline risk contingency was the one marked in grey colour. Risk management systemA risk management system could be considered the ultimate tool for managing risks for a portfolio of projects.
In practical terms, for having a risk management system it is necessary to have developed a sufficient number of risk management studies and to have performed formal training to project managers. As well, reports can be generated for supporting the decision making process.Although a risk management system is a great tool for supporting the decision making along the project delivery process. It is recommended first to start risk management with education, a pilot project and training.
After several studies, the role of a system can be justified for enhancing the overall process of risk management and its communication.12.
Caltrans enterprise risk managementAlthough the term of enterprise risk management (ERM) is not new, Caltrans started looking into its current process for doing business.
Program Project Management, Construction, Environmental, Design, Right of Way and Surveys are the most representative functional divisions existing at Caltrans.
It sets out principles, a framework and a process for the management of risks that are applicable to any type of organization in public or private sector.
It does not mandate a "one size fits all" approach, but rather emphasizes the fact that the management of risk must be tailored to the specific needs and structure of the particular organization. ConclusionsCaltrans has evolved considerably in the past five years in the field of project risk management.
Establishing timelines The second task in formation of your plan is establishing a time frame for implementation. Risk management The foreseeable project risks are documented on a risk plan with a set of actions to be taken to prevent the risk from occurring and to reduce the impact of the risk if it should materialize. As project managers, we have our hands full with the day-to-day management of our initiatives, and it is difficult enough to keep a lid on all the tactical actions that are taking place, let alone plan for the future.
The answer: A specific risk management strategy which can be simple to implement and can directly help to improve one’s ability to identify, manage and effectively communicate risks. As stated previously, we choose to manage some project risks via a spreadsheet template (see diagram). As shown above, each of the processes is included within the spreadsheet (or risk register), with the exception of risk management planning. The last two fields include the risk owner (the person primarily responsible for the risk) and a running status of the risk. An explanation of the identifying and analysing first steps of the risk management process to be used in the meeting. Assessing Risk - Analysis and Prioritisation: You need to know those risks that will have your attention.
After the team meeting make sure you have identified the means you will use to follow through on the rest of the Risk process.
Simon Robertson, PMP, runs his own business, Robertson Consulting Ltd., providing Professional Project Management Consultancy and Project Management Training services.
The Risk Matrix is used during Risk Assessment and is born during Qualitative Risk Analysis in the Risk Management process.
A project is a temporary endeavor with a defined beginning and end undertaken to meet unique goals and objectives to bring about beneficial change or added value.
Modification of an existing plan can be as simple as adding activities that would make an impact on the project.
Once your team has planned, created, implemented, and the change has become part of your daily work (standard operating procedure), you are ready to evaluate the process (see Figure 6). Risk identification has been shown to be a significant part of risk management in that it makes one aware of potential events or issues that may impact the group.
We hope that by using the tool discussed and its implementation it will prove to be useful for providing a framework in which project managers can successfully manage project risk. Now I want to say straight off, this is just about the start of the whole risk management process, not the whole. The processes used to manage the project include defining the work, identifying the team members, building the work plan and budget, managing the work plan and budget, scope management, issues management, risk management, and communication plan.
I have been involved in countless discussions with project management peers who agonize over the typical dearth of information with which they have to start up a project. Then I would provide an overview of the current state of the project delivery plan phases and key milestones. There needs to be a commitment from the staff and management, and a specific plan for implementing the change. A company-wide contest for the name that reflects the project objective will increase buy-in. You will need to follow through with each of the risk owners after the team meeting to bottom this out and capture it in the Risk Register.
Internal deliverables are produced as a consequence of executing the project and are usually needed only by the project team. For example: Risk planning, identification, qualitative analysis, quantitative analysis, response planning, and monitoring and controlling.
This produces a risk event number (REN), a way of ascribing a value (one to 100) to each risk. To this end, we prefer to categorise the plans as either mitigate, monitor, encourage, or accept. The essentials include a strong project manager, an effective project team, and a detailed implementation plan. It is very important to develop a system to identify and maintain contact with individuals who have been assigned specific responsibilities within the plan. This would involve the coordination of teams within the two project plans to ensure the water system is in place prior to the dialysis delivery system conversion.

However, keep in mind that although initial timelines are put in place, they may be changed depending on the internal and external factors impacting the project. Project and Enterprise Risk Management at the California Department of TransportationPedro Maria-Sanchez1[1] California Department of Transportation, District 11 San Diego, USA1. Risk management is the process of identifying and controlling hazards to conserve combat power and resources. Demonstrating consistent and sustained risk management behavior through leading by example and stressing active participation throughout the risk management process. Graphics are a basic tool commanders at all levels use to clarify their intent, add precision to their concept, and communicate their plan to subordinates. During execution, in-stride risk assessment and reaction can overcome unforeseen fratricide risk situations.
This chapter outlines the whole implementation process carried out with the risk management team formed from different functional units and backgrounds. Risk management has been part of the project management menu; nevertheless its application was limited only to developing a risk register and a qualitative analysis at the most. Risk management planningAs any other process in project management, risk management has to be planned in order to forecast the total effort required by the project team for developing the full scope of risk management. The roles of the Project Manager (PM) and the Risk Manager (RM) are critical for developing a realistic implementation plan (Figure 1). The RM as a risk expert should be able to lead, coordinate, educate, explain, convince, propose, monitor and evaluate the entire process; plus he or she needs to be able to have experience in leading teams from different backgrounds and coming from different functional units and agencies. Figure 4 shows a typical stakeholder analysis used at Caltrans, which is part of the project communication plan.
This function assumes that there are three different values assigned to a variable of risk; a minimum, a most likely and a maximum. The downside of conducting these interviews is that they are rather time consuming.In some cases, we can get different SMEs opinions for the same variable or risk as mentioned by Vose (2008). Risk management team elicitationThe selection of members for the Risk Management Team (RMT), is not an easy task at all.
At the end, risk management is an input-output process that if wrong data or knowledge is feed into, then the results expected, most likely would be trustless or would included biases which at the end affect seriously the integrity and best practices in risk management. The main goal of the risk analysis for each project was to determine the cost risk contingency associated to each project risk register. For the qualitative risk analysis in particular, it was useful to provide tangle examples to the team before and during the meeting.As can be observed, the critical risks are only a few ones in compare with all the risks identified at the initiation phase. Risk management meetingsIt was not common at all at Caltrans to have risk management meetings for the PDT members and even for executives. In some cases, critical project issues were discovered thanks to the risk discussions.The risk management meetings were properly planned, one for the identification, analysis and results.
In part because the follow up process is usually forgotten by the project and risk manager and as results, there is no comparison between the baseline and actual Risk Registers or risk results. If the benefits of risk management are tangible and can be promoted with management and executives, the chances for formalizing the risk management process are very high. Then, after the risks responses implementation, risks are mitigated and the contingency is reduced (red colour).
By having a set of projects in which risk management was previously implemented, the system can be fulfilled with data, including lessons learned. Taken together, management of these components constitutes a Department-wide Risk Management Strategy.
The most common project risk management techniques used in the private sector are currently part of Caltrans project delivery process.
Communication plan Prior to implementing the plan it is necessary to identify how each of the stakeholders will be kept informed of the progress of the project.
Before delving into the details of a risk management implementation, a few aspects of risk must be discussed. As part of risk identification, we also capture the date on which the risk was identified and the category to which the risk belongs.
While risk management is far more than maintaining a risk register, the tools for making decisions are essential.
A Useful Tip: The most important means to ensure you have your risk under control is to identify all the possible causes of each risk. Consider what strategies will be used to achieve the goals and objectives, as well as the resources (including staff, budget, equipment, and technical assistance) needed to carry out the plan. This is an important activity within the planning phase as it is necessary to mitigate all potential risks prior to beginning the project.
Additionally, risk management is, “… the systematic process of identifying, analysing, and responding to project risk”. The latter should be updated each time the risk status is changed, so that one has a history log for all the risks.
A risk is uncertain and may happen in the future; an issue is happening now and requires immediate action. It is important to recognize that this is a complex process, but a project has a beginning and an end. This piece assumes you have already decided on a risk process, you have already initiated the project, and you are basically looking for a great way to start to identify and to assess any uncertainties around the project. Once you have done that, look at ways you can minimise the causes and you have gone a long way to mitigating some of your risk! A project can also have external stakeholders, including suppliers, investors, community groups, and government organizations. Because risks are uncertain events, it is useful to state them in this format so that the point at which this risk may become an issue is clear. He believes passionately in using great teamwork to achieve the impossible and uses a pragmatic approach to project delivery based on PMI PMBoK® and Prince2® best practices. For example, a team for the project to convert from one type of dialysis delivery system to another should have a representative from nursing, technical department, administration, social services, education, as well as a patient representative (see Figure 3). It is here at the point of business case inception that it is critical to the success of the project that risk should be addressed properly. For example, if the team is looking to convert from one dialysis delivery system to another, senior management may insist that the water system be changed at the same time.
A trigger is an indication that a risk is about to or has occurred, and is usually based on parameters that have been ‘set off’.
Document everything; keep track of the changes made to the plan for discussion at project team meetings (see Figure 4). Make informed risk decisions; establish and then clearly communicate risk decision criteria and guidance. In addition, a discussion is held over the critical steps and aspects for performing project and enterprise risk management in the real world.Risk management is not new for the transportation industry in the United States, specifically in highway projects.
This also presents some risk in that an acceptable location for a leach field may not be available. The California Department of Transportation (Caltrans), developed a Project Risk Management Handbook which is being used as a reference for planning the steps for applying risk management into specific projects. Nevertheless, additional knowledge is provided to the team members for assessing properly the risks and opportunities during the qualitative and quantitative analysis. Vose (2008) enounces the following as the characteristics of the risk analysts: creative thinkers, confident, modest, thick-skinned, communicators, pragmatic, able to conceptualize, curious, good at mathematics, a feel for numbers, finishers, cynical, pedantic, careful, social and neutral. A key part for soliciting the information for the SMEs, are the questions asked by the Risk Manager or Risk Facilitator.
The analysis, brainstorming, experience, background of the RMT members is critical not only for the risk management identification; it is for all the process including the monitoring and control. The purpose of the qualitative risk analysis was to select those risks that represent a major negative or positive impact into the project objectives.
No meeting took more than two hours and instead of meeting minutes, the Risk Register was used as the deliverable for discussion and follow up.10. Nevertheless, the monitoring and control process continues and a new risk arises, increasing again the project contingency (blue colour). A system can represent a considerable advantage for executives and project managers since can provide risk management status reports for a set of projects for specific data dates. Project Delivery staff can assess and take intelligent risks in delivery because taking intelligent risks fosters innovation and responsible decision-making.
The implementation of project risk management has assisted Caltrans executives and project managers in assessing properly the project contingency cost based upon specific identified risks. The project team consists of the full-time and part-time resources assigned to work on the deliverables of the project.
Closure Following the completion of all project deliverables, a successful project will have met its objectives and be ready for formal closure. The tool or risk register (in this case, a Microsoft Excel Spreadsheet) provides a mechanism for capturing project risks and issues, yet also covers all of the PMBOK® KPA processes, with the exception of risk planning. Additionally, this mechanism enables users to collectively sort all of the risks, allowing them to recognise at any point how close any particular risk is to turning into an issue.
Gareth Byatt, Gary Hamilton, and Jeff Hodgkinson are experienced PMO, program, and project managers who developed a mutual friendship by realising they shared a common passion to help others and share knowledge about PMO, portfolio, program and project management.
The communication plan identifies the type of information to be distributed, the methods of distributing, the frequency of distribution, and the responsibilities of each person on the project team (see Figure 5). Firstly, by definition projects are the creation of a unique entity; therefore, a certain amount of risk will always be present. This includes the current potential for a risk becoming an issue (via REN), as well as its current owner and status.

Adding all the other key characteristics to do with risk, like causes, impacts, mitigation costs, contingency actions and costs, post-mitigation assessments of probability and impact and so on.
Get feedback from the project team and the stakeholders to determine if the project was managed effectively. Simon has over 30 years’ experience as a Project Manager in a variety of market sectors around the world.
These can be documents, plans, computer systems, buildings, educational tools, or other items identified by the team.
We find that having multiple plans in place helps to maintain a balance as to how we’ll manage our risks. Publish the working plan by posting it on the organization’s website, bulletin board, or other sites used by the organization. This article focuses on how you can get off to a great start in identifying risk being with the team. While risks are ‘uncertain’ events that have not yet occurred, an issue is an event that has already transpired. Getting this right at the beginning will save both cost and effort in providing a sound foundation for project success. Thoroughly brief all aspects of the mission, including related hazards and controls, and ensure that subordinates know the plan.
Accurately evaluate the unit's effectiveness, as well as subordinates' execution of risk controls during the mission.
The Office of Statewide Project Management Improvement (OSPM), has developed a Project Risk Management handbook which is a guide for project managers at Caltrans for using risk management.
Although there are considerable resources for learning about risk management, Caltrans has adopted this process into its project development process (Figure 2). The reality is that we not always can find individuals that have all the virtues mentioned before, therefore; we need to select the most critical characteristics that a risk manager should have. In addition, the team members should feel free to talk about risk and in some cases having more than one member coming from the same division of functional unit, can cause some limitations for discussion and brainstorming.
A model was built for running the Monte Carlo Simulation technique for obtaining the risk cost contingency for each project. Figure 11.Risk contingency behaviourCaltrans has implemented risk monitoring through the project development team meetings, where the project manager and the risk manager address any changes within the current risks or document new risks.
In addition, some members for example the project manager, the design manager or the risk manager can have rights for edition. But, at the same time, Caltrans needs to follow its project-related processes and controls to manage that risk. Nevertheless, management is taking currently formal steps in implementing it through all the state of California with the intention of managing and controlling not only project risks. Defining the work Begin the process by brainstorming potential goals, objectives, and activities for the project. Here’s a truism I’ve learned in over 30 years of delivering a variety of projects, whether infrastructure, software, business change projects around implementing a new methodology or process, expect the unexpected.
There is of course more to risk management than I have been able to cover here, and as a project manager I would insist that this is absolutely your responsibility to champion. Most successful project managers are effective because they simultaneously balance the immediate challenges and demands facing them with future needs, opportunities and risk-avoidance.
Once the plan is in place, it guides the team and they perform the work according to the plan. It also allows us to understand how we really depend on each other to call anything a "success." Understanding how we are going to manage the risk also gives the team a real sense of being involved things being under control.
He has had the privilege of working with some great companies including Fujitsu and Microsoft and has learnt valuable lessons from working with the best teams on the planet! Such positive risks, or opportunities, as they are commonly referred to, are the events you seek to act upon to create a net positive impact on your project. Reduction of fratricide risk begins during the planning phase of an operation and continues through preparation and execution.
Unfortunately, the latest version of the manual which is from 2007, did not included a detail explanation of the benefits for performing quantitative risk analysis while determining the risks impacts into the project objectives, in terms of cost and time. The RM is a neutral element of the project team and can reduce the bias, which can seriously affect the outcome of the risk management study.4. Definitely a risk manager should be a good communicator, must have an analytical mind and needs to be able to think outside the box. This approach definitely will help the whole process and will assist the RM to maintain the team focused in talking only about risk.8. In this case, the risk manager is in charge of contacting the risk owners for updates and feedback regarding their risks.Risk status reports have been developed with the purpose of maintaining informed the executive though a proper risk management communication.
According to the Minesota Department of Transportation (MnDOT, 2012), ERM is a risk-based approach to managing an enterprise, incorporating concepts of internal control, planning and budgeting.
Before creating a new plan of action to address the project, the team should first consider whether there is an existing plan that can be modified. The executive sponsor provides project funding, resolves issues and scope changes, approves major deliverables, and provides high-level direction. Balancing risk categories can help provide greater assurance that one is being effective when examining various areas of the project. Depending upon your organisation’s preferences, you may consider color-coding the REN cell (clear, yellow, red) as a means of drawing attention to high-probability, high-impact risk. However, the risk manager needs to deal with risk assessment that in the quantitative arena requires analytical modelling skills that the project manager is usually not trained for.
These reports are developed by the RM and are updated every time there is a change with the Risk Register.Risk monitoring and control must be maintain through the project life cycle until the closeout phase, were the lessons learned can include feedback from risk management. It is important to notice that outside of the common risk sources (corporate, programmatic, project and operations); other variables such the quality of life indicators, market research and performance measures are included. Identifying the project team The first task in formulating your plan is to identify the project team. Normally stakeholders are from within the company and may include internal clients, management, employees, administrators, etc. The planning component within the risk management plan can be relatively short (summarised within a couple of paragraphs) by referencing the self-contained risk register, identifying the methods for updating the risk tool, and communicating the risks and issues from the risk tool. Finally make sure both the actions and the costs are part of your project plan and covered by your project budget. It is a demanding list and indicates; that risk analysis should be performed by people who have a proven track record of doing risk management for several projects ideally. The PM and RM should put extra care in keeping a constant review of the baseline Risk Register with the purpose of actively managing the project contingency and for assessing the effectiveness of the risk responses.11. These variables have a direct impact into the risk sources, which at the end could influence the results and benefits of risk management. Before you start to implement a change or project, it is important to know the overall objectives, scope of work, deliverables, risks, assumptions, barriers, project organization chart, and project budget. This requires that we look ahead, consider and plan as to what we will do to manage our risks and their potential progression to becoming issues.
Establishing a timeline allows project team members to follow the tasks and responsibilities required for successfully completing the project. The California Department of Transportation (Caltrans, 2007) describes the risk manager (Risk Officer) responsibilities as risk management planning, identification, qualitative and quantitative analysis, risk response and risk monitoring and control. Risk management has to be implemented for projects or within projects, but this is only the first step.
One of the most important topics handled by the ERM is the determination of the Risk Appetite. Special attention should be placed into the human resource (method selection) aspect and in identifying the right phase of the project to initiate with the study. In addition, before starting working wit the RMT, the PM and RM should ensure that important project data is available.
Project stakeholdersDue to the nature of the transportation projects, several stakeholders are usually involved. As can be seen, the stakeholder analysis aid in selecting those stakeholders that could play a relevant role in the project. The frequency is another factor which needs to be addressed carefully, some people like to be informed about every change or movement in the project and others, only want to receive updates related to considerable changes in scope, time or cost for example.6.
In practice and with transportation projects, usually two or three variable values are asked to the SMEs. It is difficult to define which function is better for obtaining the data from the SMEs, since it will depend of their experience, the type of project and the project data available at the moment of the study.
However, the recommendation is to have this information during the meetings, so the rest of the team can discuss and in some cases even do they can challenge the SMEs opinion, which is a very productive and healthy action for the project. A set of cost ranges where developed for each project for matching the impact value selected. What is a reality is that those meetings are critical for performing in depth thoughts about what can go wrong with the project. Each division plays a role with the project delivery process; usually representatives of each division formed the project development team (PDT) which has the responsibility of carried on the project since the initial phase until the closeout. Caltrans expects to implement ERM in a near future with the intention of reinforcing its project and business processes.13.

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