Risk Response Strategy

Plan Risk Response – the process of developing options and actions to enhance or exploit opportunities and to reduce or eliminate threats to project objectives. 

Risk Response planning must be appropriate to: Severity of the risk,Cost in meeting the challenge,Timely to be successful, Realistic, Agreed by all parties,Owned by responsible person.

 Strategies for Negative Risks and Threads:

1. Avoid (Avoidance):  The focus of this strategy is to eliminate the cause of the risks. Taking the action to ensure the risk does not occur. This often accomplished by removing people and/or activities.
2. Transfer (Transference): This responses transfers accountability and responsibility of a risk to a third party. The third party actually performs the work or takes accountability. There is normally a cost incurred when using the transfer or transference response. A prime example of transference is the purchase of insurance
3. Mitigate (Mitigation): This response take actions to reduce the probability of risk occurring, or the impact of risk if it occurs. This could be thought of as developing a Plan B. An example is training. We try to reduce the probability and impact of employees performing poorly on the job training them.
4. Accept (Acceptance). This response entails taking no immediate action until the risk occurs. There are two types of acceptance strategies listed below. One is passive and the other is active.

• Acceptance is a response strategy appropriate for BOTH negative and positive risks
• A contingency Plan or Fallback Plan may be developed for a risk you plan to accept. However, the response will not be initiated until the risk occurs
• Acceptance is often the only choice when risks are generated from external sources, or when risk responses are beyond the control of the Project Manager
• Passive Acceptance: This type of acceptance occurs when no Contingency Plans are created to address the risk.
• Active Acceptance: Develop Contingency Plans to address the risk when it occurs. Active Acceptance is a solid option when necessary to convince risk averse stakeholders that a response plan for accepted risks is in place

Strategies for Positive Risks and Opportunities:

1. Exploit (Exploitation): This is a response that takes action to make a cause occur. Steps are taken to ensure the risk happens. It may require additional time or resources to use the exploit response method. This is the opposite of the avoid response.
2. Share (Sharing): This response enlist the support of a third party to take advantage of the opportunities presented by a positive risk event. Partnering with a third party allows both parties to share in the benefits. This is the opposite of the transfer response. Teaming agreements are an example of a share response.
3. Enhance (Enhancing): This response aims to increase the probability of the risk occurring or the impact of a risk if it occurs. Incentives are a common example of an enhance response. This is the opposite of the mitigate response
4. Accept (Acceptance): Acceptance is a feasible risk response for both negative and positive risks.

 References:

1. Project Management Institute. "Project Management Body of Knowledge (PMBOK), fourth edition, 2008".
2. Daniel C. Yeomans, PMI-RMP, PMI-PMP, CMQ/QE. "Passing the Risk Management Professional (PMI-RMP) Certification Exam, The First Try"".

Project Risk Management

Risk Management is something that we always do even without thinking about it. Risk management involves minimizing the consequences of adverse events as well as maximizing the results of positive events. Therefore, risks can be good or bad events which are commonly called as opportunities or threads.

Risk management is a part of the project management process, and consistently following that process is important for getting results. It allows you to take control of the project, rather than letting the project control you. 

The six processes in Risk Management based on PMBOK Guide is designed to help manage end-to-end project risk. An acronym was developed to remember the steps in this process is PIER-C, Plan, Identify, Evaluate, Respond, and Control.

Risk Definition

Project risk is defined as "An uncertain event or condition that, if it occurs, has a positive or negative effect on at least one of the project's objectives" Project objectives are defined as scope, time, cost, and quality.

The PMI Risk Management Process: PIER-C

PMI developed an interrelated six (6) step approach to manage project risk.The PIER process activities or steps occur during Project Planning Process Group. The Monitor and Control Risks activity occurs during the Project Monitoring and Controlling Process Group, this is the C.

 

1.  Plan Risk Management:  This initial step defines how risk management will be accomplished (methodology). The ultimate goal is to develop a Risk Management Plan which describes how the entire end-to-end Risk Management Process will work.
2. Identify Risks: This steps requires you to develop a list of risk by project, activity, work package, etc. During this step, you define the risk, assign initial ownership, define risk causes, develop initial responses, and categorize each risk. The key output of identify risks is a document referred to as the Risk Register.
3. Perform Qualitative Risk Analysis: This step is the first evaluation step. This is subjective process. During this step, you use the Risk Register to classify risks by probability (likelihood the risk will occur) and impact (effect of the risk consequence on the project). At the end of this step, prioritize all risks and establish a short list of risks that must be aggressively managed. This is often referred to as the Urgent List. You also place low probability and impact risks in a separate section of the Risk Register, which is called Watch List. At the conclusion of this step is the risk register updated.
4. Perform Quantitative Risk Analysis: This step is optional. The Project Manager decides ! You may or may not Perform Quantitative Risk Analysis. This decision is determined by factors such as time, project priority, level of effort as compared to benefits, etc. This evaluation method numerically analyzes the impact of multiple risks to the project. This is an objective method that helps determine probability that stated budgetary and schedule outcomes can be met. The risk register updated is the output of this step.
5. Plan Risk Responses: During this step, develop responses to risks on the urgent or "short"list of risks. The level of response detail is dictated by the priority of the risk. Strive for the responses that address both positive risks (opportunities) and negative risks (threats). The risk register updated is the output of this step as well. In addition, contractual agreements may be developed to support responses that require third party involvement.
6.  Monitor and Control Risk: This is the final step in the Risk Management Process. During this step, monitor and reassess risks on the Risk Register. Implement risk responses as necessary. Identify new or emergent risks that were not identified during the identify risks activity. In addition, evaluate the effectiveness of the risk program for the overall project. 

When to Start Risk Management
PMBOK has nine knowledge areas. Risk management comes at the end of the project planning stage, because, for risk management, you need input from other knowledge areas. The only knowledge area that is planned after risk management is procurement management, because you often need to include causes to manage specific risks in your project. This only becomes clear after risk response planning. For example, you decide the contractor should be responsible for risks that may occur due to expected new legislations, then this must be spelled out in the agreement with the contractor.

Knowledge Area	Contribution to Risk Management
Scope Management	What is included in the project and what is not
Time Management	Work breakdown structure and schedule baseline
Cost Management	Cost baseline and budgeting
Quality Management	Quality standards and specification required for the project
Human Resource Management	Organizational chart, project team members, staff availability, etc
Communication Management	Know the stakeholders and their expectations, and the communication plan

References:

1. Abdulla J. Alkuwaiti, RMP, PMP. "Study Guide for the PMI. RIsk Management Professional Exam".
2. Daniel C. Yeomans, PMI-RMP, PMI-PMP, CMQ/QE. "Passing the Risk Management Professional (PMI-RMP) Certification Exam, The First Try"".
3. Rita Mulcahy, PMP. "Risk Management. Tricks of the trade for Project Managers and PMI-RMP Exam Prep Guide".

Project Human Resource Management

There are number of pertinent topics in Project Human Resources that are very important to memorize and understand if you want to take either PMP or PMI-RMP (Project Management Institute - Risk Management Professional) exam.

They include:

• Motivational Theories 
• Leadership Style
• Leadership Style Applicability
• Negotiation Methods

A. MOTIVATIONAL THEORIES

Motivation impact stakeholder attitudes. Be aware of the following motivational theories and the individuals who responsible for each when applicable

 

MOTIVATIONAL THEORY	KEY POINTS
Expectancy Theory	Employees believe effort leads to performance. Performance should be rewarded based on individual expectations. Rewards promote further productivity
McGregor's Theory X and Y	All workers fit into 1 of 2 groups.  Theory X, managers believe people are not to be trusted and must be watched. Theory Y, managers believe people should be trusted, want to achieve success, and are self-directed
Maslow's Hierarchy of Needs Theory	Maslow stated that motivation occurs in a hierarchical manner. Each level must be attained before moving to the next (Physiological - Safety - Social - Esteem - Self Actualization)
Achievement Motivation Theory	David McClelland states that there are three needs that must be met for people to be satisfied. They include achievement, affiliation, and power.
Hertzberg' Theory	There are hygiene factors and motivating agents. Hygiene factors such as salary, working conditions, benefits, etc. They do not increase motivation. Motivating factors such as responsibility, growth, and achievement are those that increase motivation.

B. LEADERSHIP STYLES

Leadership styles also impact stakeholder support of the Risk Management Process. Each style must be used on a situational basis.

LEADERSHIP STYLE	DEFINITION
Directive	Tell people what to do
Facilitative	Coordinate and solicit the input of others. A good Project Manager is facilitative
Coaching	Train and instruct others on how to perform the work
Supporting	Provide assistance and support as needed to achieve project goals
Consensus Building	Solve problems based on group input. Strive for decision buy in and agreement
Consultative	Invite others to provide input and ideas
Autocratic	Make decisions without input from others

Tuckman Model: is a common five-step model used to depict growth of a team from the moment it is formed. This model is used to determine appropriate situation leadership style

STAGE	CHARACTERISTICS
Forming	Team meets and learns about the project. Roles are discussed. Expect hesitancy, confusion, anxiety, lack of purpose, and lack of identity. Productivity is low
Storming	Team begins to address work, technical decisions, and project management approaches. Conflict can occur which may disrupt the team. Leadership is challenged, cliques form, etc. Productivity decreases
Norming	Team members begin to work together. They adjust individual habits to accommodate the team. There is open communication, purpose, confidence, motivation, etc. Productivity improves
Performing	Teams are independent, self-directed, and work through issues quickly and smoothly. There is pride and trust. Productivity peaks
Adjourning	Team completes all work and moves on

C. LEADERSHIP STYLE APPLICABILITY

Each leadership style can be used to support a variety of situations. The table shows common situations and recommended leadership

SITUATION	BEST LEADERSHIP STYLE
Team is forming and new. They need direction and task oriented information	Directive; Coaching
Team is storming. There is much conflict, frustration, and confusion	Facilitative; Consensus Building; Consultative
A decision must be made quickly. Time is of the essence. There is little time for input	Autocratic
The team is well established and skilled. They are in the norm or perform stages	Supporting

D. NEGOTIATION

There are some tips to negotiate with stakeholders:

• Understand and be able to explain the needs of the project. Be able to specifically spell out "what, why, who, where, when, and how factors" impacting project risk
• Be able to explain the business need for the project in an effort to gain support. The Functional Manager may not recognize project risks, benefits, etc
• Understand that key stakeholders have other jobs to do. Understand their work situations. Be realistic
• Build a relationship. Find out how to assist the stakeholder and create a win-win situation surrounding the need for their support
• Be willing to compromise. Be flexible

References:

1. PMBOK fourth edition 2008, Project Management Institute
2. Passing the Risk Management Professional (PMI-RMP) CertificationExam. The First Time 2011. Daniel C. Yeomans, PMI-RMP, PMP, CMQ/OE

 

PMP Exam Preparation Course

What is PMP?

The Project Management Professional, or commonly known as PMP^®, certification is a credential given to those who successfully pass an exam by the Project Management Institute (PMI). PMI provides a professional development program that is based upon the Project Management Body Of Knowledge Guide (PMBOK^® Guide). The PMBOK^® Guide contains proven practices for managing projects and is constantly evolving as new innovative techniques emerge and gain adoption.

PMP will provide professional/personal recognition, expedite professional advancement, create job growth/opportunities within an organization, provide framework for standardized Project Management requirements and increase employee’s value to the organization

Furthermore, the PMP^® exam is for individuals who have the requisite experience, education and training in project management. The certification is not for individuals who never managed a project or at the very minimum, do not have some training in project management.

What the Exam Test?

PMP Certification Exam DOES NOT TEST

-        Your project management experience

-        Your common sense

-        Your knowledge of industry practices

-        Your knowledge of how to use software tools

-        What you learned in management school

-        Your intelligence

PMP Certification Exam DOES TEST

-        Your knowledge of PMI's processes

-        Your understanding of the many terms that are used to describe the processes

-        Your ability to apply those processes in a variety of situations

-        Your ability to apply key formulas to scheduling, costing, estimating, and other problems

-        Your understanding of professional responsibility as it applies to project management

In order to help the PMP candidate to pass the exam, Aveco dinamis provide a PMP exam preparation course for 5 full days workshop.

The Objectives of PMP® Exam Preparation Training

1.      To give the participants the knowledge base of the concept of Project Management (PM) based on PMBOK (Project Management Body of Knowledge from PMI International, ISO 9001)

2.      To guide the participants in preparing the PMP exam certification from PMI. The exam itself will be carried out at the last day of the workshop.

Duration and Fees

The duration of the workshop is 35 hours, 5 days, from 09.00 to 17.00 WIB intensively every day. The fee is Rp. 5.000.000,- including training kit, snacks, lunch, PM Professional Certification and the PMP exam preparations (PMI, USA).

Module Overview

 Day 1

Introduction to PMP certification course

Project Management Framework

Project Management Processes Group and Knowledge Areas and Practice Test

Project Integration Management and Practice Test

Day 1

Project Scope Management and Practice Test

Project Time Management and Practice Test

Project Cost Management and Practice Test

Day 3

Project Quality Management and Practice Test

Project Human Resources Management and Practice Test

Project Communication Management and Practice Test

Day 4

Project Risk Management and Practice Test

Project Procurement Management and Practice Test

Professional Responsibility and Practice Test

Day 5

Review Session

Simulation 200 questions

How to register the course?

You can fill the form on the registration form, or you have any question regarding the course, you can contact us....

Project Management Plan

What is Project Management Plan???

In terms of project management in planning process, a Project Management plan is the most important document that needed to perform work. The project management plan is the sole outputs of develop project management plan in integration management. 

Project Management Plan is a formal and approved document that defines how the project is executed, monitored and controlled. It may be in a form of an executive summary or a detailed document, and it may compose one or more subsidiary management plans and other planning documents

Project plan is used to:

• Guide project execution
• Document project planning assumption
• Document project planning decision based on the selected alternatives
• Facilitate communication among stakeholders
• Define key management review 
• Provide a baseline for progress measurement and project control

The keys to understanding the project management plan:

1. The project management plan is formal. It is important to think of the project management plan as a formal, written piece of communication.
2. The project management plan is a single document. It is not 15 separate plans. One those separate documents are approved as the project plan, they become a single document.
3. The project management plan is approved. In other words, there is a point in time at which it officially becomes the project plan. Who approves it is going to differ based on the organizational structure and other factors, but typically it would be the project manager, the project sponsor, the functional managers who are providing resources for the project.  
4. The project management plan defines how the project is managed, executed, and controlled. This means that the document provides the guidance on how the bulk of the project will be conducted.
5. The project management plan may be summary or detailed. 

Components of Project Management Plan:

• Change Management Plan
• Configure Management Plan
• Scope Management Plan
• Time Management Plan
• Cost Management Plan
• Quality Management Plan
• Process Improved Plan
• Human Resources Plan
• Communication Management Plan
• Risk Management Plan
• Procurement Management Plan
• Requirements Management Plan
• Scope Baseline
• Cost Performance Baseline
• Schedule Baseline

 

Project Management Mapping

Based on PMBOK Guide, Project Management Process consists of five processes, which are:

1. Initiating Process; Processes performed to define a new project or a new phase of an existing project by obtaining authorization to start the project or phase.
2. Planning Process; Processes required to establish the project scope, refine the objectives, and define the course of action required to attain the objectives that the project was undertaken to achieve.
3. Executing Process; Processes performed to complete the work defined in the Project Management Plan to satisfy the project specification.
4. Monitoring and Controlling Process; Processes required to track, review, and regulate the project progress and performance; identify any areas in which changes to the plan are required; and initiate the corresponding changes (corrective action)
5. Closing Process; Processes performed to finalize all activities across all Project Management Process Groups to formally close the project or phase.

9 Project Management Knowledge Areas:

1. Project Integration Management
2. Project Scope Management
3. Project Time Management
4. Project Cost Management
5. Project Quality Management
6. Project Human Resource Management
7. Project Communication Management
8. Project Risk Management
9. Project Procurement Management

Project Management Mapping

Knowledge Area & Process	Initiating	Planning	Executing	Monitoring & Controlling	Closing
Project Integration Management	Develop Project Charter	Develop Project Management Plan	Direct & Manage Project Execution	Monitor & Control Project Work Perform Integrated Change Control	Close Project or Phase
Project Scope Management	----------	Collect Requirements Define Scope Create WBS	----------	Verify Scope Control Scope	----------
Project Time Management	----------	Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Duration Develop Schedule	----------	Control Schedule	----------
Project Cost Management	----------	Estimate Costs Determine Budget	----------	Control Costs	----------
Project Quality Management	----------	Plan Quality	Perform Quality Assurance	Perform Quality Control	----------
Project Human Resources Management	----------	Develop Human Resource Plan	Acquire Project Team Develop Project Team Manage Project Team	----------	----------
Project Communication Management	----------	Plan Communication	Distribute Information Manage Stakeholder Expectation	Report Performance	----------
Project Risk Management	----------	Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses	----------	Monitor and Control Risk	----------
Project Procurement Management	----------	Plan Procurement	Conduct Procurement	Administer Procurement	Close Procurement

The Triple Constraint or as some know it, the iron triangle, is simply the concept that SCOPE, TIME, and COST are closely interrelated.
Work Authorization System is part of the overall project management information system (PMIS), the work authorization system is used to ensure that work gets performed at the right time and int the right sequence.

Common Inputs, Tools, Techniques and Outputs
INPUTS
Enterprise Environmental Factors

• Organizational structure
• Organization's values and work ethic
• Laws and regulations where the work is being performed or where the product will be used
• Project's stakeholders characteristic (expectations and willingness to accept risk)
• Marketplace
• Organization's infrastructure
• The stakeholder or organization's appetite for risk

Organizational Process Assets

• Templates for common project documents
• Examples from a previous project plan
• Organizational policies, procedures, and guidelines for any area (risk, financial, reporting, change control, etc)
• Software tools
• Databases of project information
• Estimating data for budget or schedule components
• Historical information
• Lessons learned
• Knowledge bases
• Special corporate competencies

Project Management Plan

• Scope management plan
• Requirements management plan
• Schedule management plan
• Cost management plan
• Quality management plan
• Process improvement plan
• Human resource plan
• Communications management plan
• Risk management plan
• Procurement management plan
• Schedule baseline
• Cost performance baseline

Work Performance InformationBegins to flow as the actual work on the project is executed.

TOOLS AND TECHNIQUES

• Expert Judgement
• Project Management Information System

OUTPUTS

• Change Request
• Updates (All Categories)