I have #2 page note and I want some one to provide a short set of input on what the most interesting parts of my notes are….Our textbook gives a tremendous description of the RM processes and a thorough consideration of all of the sources of risk?what is missing is a good thought process on how exactly a project leader goes about the risk identification process.The purpose of this document is to provide you a model for thinking about risk identification.My thinking on this and these notes are very heavily influenced by a 2003 conference paper written by a project management expert named Crispin Piney.He first took the convoluted risk identification process and created a set of six steps to walk through.Risk identification is crucial as the completeness of the list of risks and the plans for responding to them must be elaborated progressively.=================================================================The first thing on our RI ?to do? list is to get a good template for our risk statements.It is not just the list of risks that needs to be elaborated progressively, the same holds for the full description of each risk: a fully specified risk statement has to describe not only what may happen, but also why, when and to what effect. The most effective way of ensuring that this is carried out consistently by the project team is to define, in the Risk Management Plan, a standard template for all risk statements.People, naturally, do not think in terms of fully specified risk-statements: when you ask for potential risks, you will initially obtain a mixture ofHere is a solid starting place for a template: ?Because of (insert cause), (insert event) could occur during (insert time window), which could lead to (insert impact) with an (insert effect on project objective?Example:Because of a lack of available software engineers, design work may be delayed during our preparation for Preliminary Design Review, which could lead to significant schedule dlays and corresponding increases in cost as well as risk to completion of the project?s full scope.Next let?s think about the very basics of RI?The first step in any project is to ask two questions:The first question corresponds to a SWOT analysis, whereas the second can be answered by use of ?lessons learned? or other sources of analogy with known projects (Exhibit 4).SWOT AnalysisThe four letters that make up the acronym SWOT stand for ?Strengths?, ?Weaknesses?, ?Opportunities? and ?Threats?. The first two (SW) correspond to internal capacities of the organisation, whereas the last two (OT) refer to factors impacting or impacted by the external environment.Examples:AnalogyThe approach is to learn from previous experience.Here it is important to select a project or set of projects that are fairly similar to the current one.Example: when we came up against these likely competitors before, we lost the contract because of their low cost execution model=====================================================================Now let?s talk about more DETAILED IDENTIFICATIONThe risks identified through SWOT and Analogy will serve as a trigger the thinking in more depth. There are five main techniques here:InterviewingIn order to obtain the best results from an interview, it should be run as a project in its own right: define the objectives and desired outcome. Select the correct people and brief them (interviewers and interviewees). Allocate time and resources. Develop relevant questions. For more details, see Pritchard 1997.For the Sample project, they decided to interview their Chief Financial Officer to identify the financial risks in the case of winning the bid, losing the bid and choosing not to bid.Assumptions AnalysisA number of project decisions are based on (conscious or unconscious) assumptions. Since each assumption could be wrong, each is a potential risk. One challenge in assumptions analysis is to try to make the unconscious assumptions visible.Example: one assumption is that the customer does in fact want to buy the product or service described in the RFP. This could be false (they may have decided to create it themselves and are just looking for additional information or justification for this). This is clearly a threat.Document ReviewsAll of the project documents provide details that can indicate areas of risk. Some risks may come from faulty project process, whereas others may be inherent in the project approach or constraints.Example: the RFP states that in case of satisfactory delivery by the chosen contractor, the contractor may be requested to provide ongoing support and operations for the service. This is an opportunity to be considered.Delphi TechniqueThis technique is especially useful when the views of a large number of distributed people are required. It can be seen as remote interviewing with group feedback (Meredith & Mantel 1995).A document is sent to each participant explaining the situation and asking a specific question or set of questions. The responses are then analysed and assembled into a standardised form, destined to ensure a consistent and objective structure to each statement. The full list is then circulated to all participants with a follow-on question such as ?what is the relative correctness and importance of each statement, and does this list suggest any additional points to you?. These responses are once again collated and a final list circulated for approval.Example: the leaders of each functional entity were solicited in this way and differing views on the types and levels of risk were brought to light:BrainstormingThe basic concept of brainstorming is to encourage creative thinking by allowing all participants to propose ideas with no fear of criticism or negative judgement (Meredith & Mantel 1995). This can lead to considerable synergy and unexpected ideas.There are two main approaches:The classic approachIn this case, the facilitator writes down each of the suggestions ? normally on a flip chart or similar. The facilitator ensures that there is no analysis or criticism of any ideas. The only discussion allowed is for clarification. The facilitator consolidates the list once the session is over. The success of this technique depends on the ability of the facilitator to ensure that everyone gets a fair chance to express themselves.Nominal Group TechniqueIn this case the participants start of by writing their ideas on stick-on notes, one idea per note. The facilitator then gets each participant in turn to read out one idea; the note is then stuck on the wall. Once again, the facilitator ensures that there is no analysis or criticism of any ideas. Participants can create additional notes as ideas come to them while this process is going on and read them out as their turn comes back. This technique is more structured than the classic approach and allows people more time to prepare their thoughts. It ensures that each participant can express themselves.=====================================================================================Now we will ?Expand the List? with an External Cross CheckAt this point we would have pretty extensive list of risks. However, this is almost entirely based on knowledge and ideas from within your project team. The next step is to evaluate whether there is any relevant information available beyond the project.Use these tools:ChecklistsRisk checklists are normally aimed at a specific market or technology area. They consist of a list of typical risks with their causes and typical impacts (see Appendix in Pritchard 1997). They will often also propose typical responses. They should only be used once the initial list has been developed because they tend to stifle creativity if used prematurely.CategoriesThe clusters developed in the Affinity Grouping step are examples of categories. However, in a similar way to checklists, there are some published of structured lists of categories for typical projects. One useful approach is to obtain or develop a hierarchical breakdown into sub-categories to create a ?Risk Breakdown Structure? for the project. The chart below gives an example of a RBS, in which the technical area has been broken down further.====================================================================Now we ?Validate against the scope? with an Internal Cross Check?However well the list has been produced, it is always important to verify that it does correspond to the defined scope. For this we would use the project Work Breakdown Structure (WBS), which provides a hierarchical breakdown of all of the work planned for the project.Mapping to the WBSFor each item from the risk list, identify which elements of the WBS correspond to it, add this information to the risk list and flag the corresponding elements of the WBS accordingly. This will make planning the response more straightforward, as well as assigning a person responsible for managing that risk.Checking the WBSThis is carried out after mapping to the WBS: you should check each of the WBS elements ? and especially those that are not flagged as having an associated risk ? to see whether they suggest any specific risks. If no risks are identified for any elements, it is recommended to flag those elements as ?risk-free?.Also?.take some time to think about whether that is really true!!=================================================NOW WE HAVE A LIST OF RISKS AND WE WILL WORK TO FINALIZE RISK STATEMENTSYour list of risks will be a mixture of causes, impacts, areas and events. To finalize we need to fill in missing elements in each risk statement.Here are specific tools for determining each missing element:FlowchartingA flowchart shows the activities and decisions as well as the flow of control and data through a specific area or process. In order to determine the risks associated with the area or process in question, each action and decision-point has to be investigated from the point of view of threats and opportunities that it might represent.Fishbone diagramThis technique is best known in the Quality Management area and is also known as a ?cause-and-effect diagram?: it provides a pictorial method of breaking down the potential causes of a given situation hierarchically into more and more detail: the ?head? of the fish is the situation and the ?backbone? links all potential causes ? which are the main fish bones. For each bone, the same breakdown into potential cause is carried out, to produce an added level of fishbone, and so on to the required level of analysis.Influence diagramAn influence diagram is a way of showing the relationship between actions ? in their chronological order ? and potential causes. In this way the full set of risk scenarios can be shown. All that then remains is to read the various scenarios off the diagram by following the influence relationships
