risk management 1-2

• Risk- It is the probability of something happening that will have an adverse impact on people, plant, equipment, financials, property or the environment and the severity of the impact” 
• A risk is ANYTHING that may affect the achievement of an organization’s objectives
• •It is the UNCERTAINTY that surrounds future events and outcomes.
• •It is the expression of the likelihood and impact of an event with the potential to influence the achievement of an organization’s objectives.
• Risk – Exposure to chance of hazard
• •Risk Level – A measure to represent the significance of the risk
• •Controls – Action(s) that could eliminate or reduce
• •Residual Risk – Risk level after implementing controls.
• •Risk Response – An action on the risk, whether to accept of not to accept.
• •Speculative risk is a category of risk that, when undertaken, results in an uncertain degree of gain or loss. 
• •Pure Risk is a category of risk in which loss is the only possible outcome; there is no beneficial result.
• Dynamic risk is a risk of loss resulting from changes in culture, taste or policy (i.e. i inflation, recession, and other business cycle changes).
• Static Risk is a risk of loss caused by factors other than a change in the economy (i.e. hurricanes, earthquakes, other natural disasters)
• •Fundamental risks affect the entire economy or large numbers of people or groups within the economy.
• •Particular risks are risks that affect only individuals and not the entire community
• Risk management is the process of analyzing exposure to risk and determining how to best handle such exposure
• Avoidance – Avoiding the risk by discontinuing the activity that generates it
• Acceptance – Retaining the risk (self-insurance)
• Mitigation – Reducing the likelihood and impact of a risk (loss control programs)
• Transfer – Shifting ownership of risk to a third party (insurance)
• Schedule: Whether you will get the hardware or software on time as planned
• •Scope: It is always a risk; whether you have covered all the works required and only the work required. It will cost you hugely in case you have missed any important requirement.
• Resource: This is also unpredictable really; you can’t expect availability of the resources as planned. The planned resources can be used for some other projects as well, in that case you need to get someone new and it can create a problem in schedule and cost both. Sometimes in quality also in case of inexperience.
• Quality: The deliverable can be of poor quality due to some other imposed factors, that is a huge risk.
• Cost: Estimation of cost can be a risk in your project; if something you have planned to purchase and if you are not getting the same in time, it can prove costly, as you have to wait for this particular item for a longer period.
• Material and equipment risks:

  • Required hardware will not be delivered on time.

  • Access to the development environment will be restricted.

  • Equipment will fail.
• Customer risk is related to the customer's key success factors for the project.  A project is not successful if the customer is not successful with the process. It can be sub-divided as follows:

  • Customer resources will not be made available as required.

  • Customer staff will not reach decisions in a timely manner.

  • Deliverables will not be reviewed according to the schedule.

  • Knowledgeable customer staff will be replaced with those less qualified.
• Scope risks:

  • A lack of clarity in the scope definition will result in numerous scope creep.

  • A lack of clarity in the scope definition will result in conflict in the customer     

     about the scope.

  • A lack of clearly defined acceptance criteria will cause delays in acceptance and       

     sign-off.
• Technical risk arises from the capability of the technical solution to support the requirements of the customer.  Again, it can be categorized as follows as well:

  • The technology will have technical or performance limitations that endanger

      the project.

  • Technology components will not be easily integrated.

  • The technology is unproved and will fail to meet customer and project

      requirements.

  • The technology is new and poorly understood by the project team and

      will introduce delays
• Delivery risk is related to the ability of the complete team to deliver against the plan at the cost and schedules estimated, like;

  • System response time will not be adequate.

  • System capacity requirements will exceed available capacity.

  • The system will fail to meet functional requirements.
• Unpredictable risks: 

  • The office will be damaged by fire, flood, or other methods.

  • A computer virus will infect the development environment or operational

      system.
• Project management risks:

  • The inexperience of the project manager will result in budget or schedule

     slippages.

  • Management will deem this project to have a lower priority for resources and   

     attention.
• Resource risks: 

  • Main staff may not be available.

  • Key skill sets will not be available when needed.

  • Key staff will be lost during the project.

  • Subcontractors or vendors will below-perform and fail to meet the milestones.
• Risk Management is defined in the standard (AS/NZS 4360:2004) as "the systematic application of management policies, procedures and practices to the tasks of establishing the context, identifying, analysing, assessing, treating, monitoring and communicating".
• Risk management can be applied to all levels of an organisation, in both the strategic and operational contexts, to specific projects, decisions and recognised risk areas.
• Risk is defined as 'the chance of something happening that will have an impact on objectives'. It is, therefore, important to understand what the objectives of the University, Faculty, work unit or your position, are, prior to attempting to analyse the risks.
• • Identify the Risks
  • Identify the Causes
  • Identify the Controls
  • Establish your Likelihood and Consequence Descriptors
  • Establish your Risk Rating Descriptors
  • Add other Controls
  • Make a Decision
  • Monitor and Review
• 'Risk Management -The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making.