Identifying and Managing Project Risk

Tom Kendrick the former Program Director for the project management curriculum at UC Berkeley Extension, and lives in the Bay area near San Francisco, California. He is a past award recipient of the Project Management Institute (PMI) David I. Cleland Project Management Literature Award for "Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Project" (now in it's fourth edition).  Tom is also a certified PMP and serves as a volunteer for both the PMI Silicon Valley Chapter and PMI.org.

Contents



Acknowledgments vii

Introduction 1



CHAPTER 1: Why Project Risk Management? 4

The Doomed Project * Risk * Opportunities and Risks * Benefits of Project

Risk Management * Costs of Project Risk Management * The Project Risk

Management Process * Anatomy of a Failed Project: The First Panama

Canal Project



CHAPTER 2: Planning for Risk Management 22

Project Selection * Overall Project Planning Processes * Defining Risk

Management for the Project * Risk Management Infrastructure for the

Organization * The PERIL Database * A Second Panama Canal Project:

Sponsorship and Initiation (1902--1904)



CHAPTER 3: Identifying Project Scope Risk 49

Sources of Scope Risk * Defining Deliverables * High-Level Risk

Assessment Tools * Setting Limits * Work Breakdown Structure

* Other Scope-Related Risks * Documenting the Risks * Panama Canal:

Setting the Objective (1905--1906)



CHAPTER 4: Identifying Project Schedule Risk 79

Sources of Schedule Risk * Activity Definition * Estimating Activity Duration

* Activity Sequencing * Documenting the Risks * Panama Canal:

Planning (1905--1907)



CHAPTER 5: Identifying Project Resource Risk 108

Sources of Resource Risk * Resource Planning * Staff Acquisition

* Outsourcing * Effort Estimates Adjusted for Risk * Cost Estimates,

Budgets, and Risk * Documenting the Risks * Panama Canal:

Resources (1905--1907)



CHAPTER 6: Managing Project Constraints and

Documenting Risks 136

Analyzing Constraints * Managing Opportunities * Scope Modification

* Resource Modification * Schedule Modification * Assessing Options and

Updating Plans * Seeking Missing Risks * Creating a Risk Register * Panama Canal:

Improving the Plan (1906)



CHAPTER 7: Quantifying and Analyzing Activity Risks 161

Qualitative and Quantitative Risk Analysis * Probability and Impact * Qualitative

Risk Assessment * Quantitative Risk Assessment * Panama Canal: Risks (1906--1914)



CHAPTER 8: Managing Activity Risks 189

Root Cause Analysis * Categories of Risk * Selecting Risks to Address

* Risk Response Planning * Dealing with Risk Causes * Implementing Preventative

Ideas * Dealing with Risk Effects * Documenting Your Risk Plans and Risk Owners

* Managing a Specific Risk * Bow Tie Analysis for Documenting Risk Responses

* Panama Canal: Risk Plans (1906--1914)



CHAPTER 9: Quantifying and Analyzing Project Risk 232

Project-Level Risk * Aggregating Risk Responses * Project Modeling and

Simulations * Integrated Schedule/Cost Assessment * System Analysis

* Critical Chain Considerations * Questionnaires and Surveys * Analysis of Scale

* Project Appraisal * Scenario Analysis * Project Metrics * Financial Metrics

* Panama Canal: Overall Risks (1907)



CHAPTER 10: Managing Project Risk 276

Project Documentation Requirements * Project Start-Up * Selecting and

Implementing Project Metrics * Establishing Reserves and Managing for

Contingency * Project Baseline Negotiation * Project Plan Validation

* Specification Change Control * Panama Canal: Adjusting the Objective (1907)



CHAPTER 11: Monitoring and Controlling Risky Projects 299

Don't Panic * Applying the Plan * Project Monitoring * Collecting Project Status

* Metrics and Trend Analysis * Responding to Issues * Communication and Risk

Reporting * Project Archive * Managing Risk Reserves * Project Reviews and Risk

Reassessment * Taking Over a Troubled Project * Panama Canal: Risk-Based

Replanning (1908)



CHAPTER 12: Closing Projects 321

Project Closure * Project Retrospective Analysis * Panama Canal: Completion (1914)



CHAPTER 13: Program, Portfolio, and Enterprise Risk Management 330

Project Risk Management in Context * Program Risk Management * Portfolio Risk

Management * Enterprise Risk Management * Panama Canal: Over the Years



CHAPTER 14: Conclusion 367

Choosing to Act * Managing Your Risks * Panama Canal: The Twenty-First Century



APPENDIX: Selected Detail from the PERIL Database 373

Scope Risks * Schedule Risks * Resource Risks



Index 381