Saturday 5 October 2019

Risk Management in Projects

A Risk Management in the project includes steps to understanding and identifying potential problems that may occur, evaluating, monitoring and managing risks. Proactive risk management means answering how people are actively trying to reduce their risk and improve the level of success probability of the project.

Risk Management in Projects


Risk is a combination of possible occurrences and consequences of such incidents by not closing the probability that there is more than one consequence that may occur for a particular incident. Generally the risk is seen from negative perspectives, such as loss, danger, loss, failure and so forth. These things are essentially forms of uncertainty that should be understood and managed effectively so that it can be an added value for the organization.

definition is an opportunity or opportunity that can be mathematically formulated as follows:
risk exposure = risk likelihood x risk

Impact

Risk likelihood is the probability of an event being quantified into probability numbers, Risk impact is the impact of the event which is usually measured by monetary unit For example, rupiah, the level of risk interest is called risk exposure, which in cost-benefit analysis will reflect the amount of cost. This risk exposure will later be compared to the risk exposure of another job and be a reference for people to choose which work to do.

Types of risks

There are at least 4 types of risks that have been known by people, namely:
  • Operational risk, which is the risk associated with the operation of the organization, Antra other such as risk that includes the system of organization, work process, technology and human resources.
  • Financial risk, which is the risk of impacting the Organization's financial performance such as risk events resulting from currency fluctuations, interest rates including the risk of lending, liquidity and market conditions.
  • Hazard Risk, namely the risks associated with physical accidents such as fire damage, earthquakes, physical threats etc.
  • The risk of stratejics, namely the risks that have to do with corporate strategy, politics, economics, law. This risk is also related to the reputation of organizational leadership and changing customer tastes.

Project

Risk Management in General, the primary risk management objective is to prevent or minimize any adverse influences due to unexpected events through risk aversion or Contingency plan preparations relating to such risks. In Project risk project management is a uncertain event or condition, and if there has been a positive influence or can also be negative on the project objectives. A risk has cause and if it happens it will take effect, therefore the risk can be expressed as a function of possibilities and impacts.

Furthermore , in the context of project management, project risk management is understood as arts and sciences to identify, analyse and respond to risks during the project life and still guarantee the achievement of project objectives. Good project risk management will be able to improve the project's success rate significantly. However, project risk management will give a positive impact on choosing projects, determining project scope, creating realistic schedules and good cost estimates. There are three things to consider in project risk management namely:

  • Identify, analyze and risk assessment at the beginning of the project systematically and develop a plan to anticipate risk.
  • Allocate responsibility to the most appropriate party to manage risk
  • Ensure that the cost of handling risk is quite small compared to the value of the project. This means that the cost required to reduce the negative impact of a risk is relatively lower or equal to the benefits of the inevitable/reduced risk.
  • Uncertainty about the risk of decision-making generally can enter into three categories, namely

Decision making is in definite condition. 

What is meant here is that in a certain condition, it means that all information about an event can be determined with certainty so that the results of each decision can be known with certainty anyway. Comparisons of various alternative decisions can be made directly as all the alternative related information decisions can be identified with certainty

Decision making under risk. It means that the decision is taken with the availability of definite information about possibilities and impacts so that the value of hope can be known.

Decision making in uncertainty. It means that decisions are taken with conditions where information about possibilities and impacts cannot be obtained so that people cannot estimate anything about possibilities.

RiskManagement

processof risk management process gives us an idea that to manage risk there are several stages: Planning Covers step Deciding how to approach and plan risk management activities for a project. Taking into consideration the project scope, project management plan, corporate environmental factors, the project team can discuss and analyse risk management activities for specific projects. To make planning risk management, there are several things that are necessary:

  • Project Charter, which is a document issued by senior management that formally declares a project. This document authorizes project managers to use organizational resources to execute project activities.
  • Risk Management Policy,
  • The arrangement of roles and responsibilities
  • Stakeholder tolerance to risk
  • Tamplate for organizational risk management plan
  • Work Breakdown Structure (WBS)

The Output of risk management planning is the Risk Management Plan which contains:
  • Methodology that outlines tool definitions, approaches, data sources that may be used in certain project risk management
  • Roles and responsibilities that outline the responsibilities and leading roles and supporters of the following risk management team membership for each action
  • Budget plan for project risk management
  • Time plan for the execution of risk management process throughout the project cycle
  • Scoring and intepretation that outlines the scoring method and interpretation of the appropriate type and timing of qualitative and quantitative risk analysis.

2. Identification of risk

as a series of processes, identification of risk begins with understanding what is exactly the risk. Next is a risk definition that may affect the success rate of the project and document the characteristics of each risk by doing the main result of this step is the risk register.


Risk identification can be done by analysis of risk source and analysis of risk source analysis problem namely risk analysis by looking at where the risk comes from. There are three known risk sources of internal risk, namely the risk of internal organizations that can be categorized in non-technical risk (human, material, financial) and technical risk (design, construction and operations). Problem analysis is a risk analysis associated with concern/anxiety.

To be able to identify the risk of at least four methods used, namely:
  • Identification of risk based on objectives the risk is identified based on the extent to which an event may harm the achievement of the objectives in part or overall project work.
  • Identify risk based on scenario. The risk is identified based on scenarios made based on the approximate occurrence of an event.

Risk identification based on taxonomy. Namely the risk of breakdown based on the risk source by using existing practice knowledge through a list of questions that have been compiled that the answer will show the risk.

Common risk check. The risks that are already common are listed and made the selection of the risks that correspond to the project being worked.

3. Qualitative

Risk Analysis 4. Quantitative risk Analysis 5 . Risk handling risk is interpreted as a process done to minimize the level of risk faced up to the acceptable limit.

SACRA Quantitative, the effort to minimize risk is done by implementing measures directed at the decline in the number of measured results from risk analysis. Although in the case of risk management can be done with one or more ways applied simultaneously or simultaneously for example reducing risk while transferring risk, but in general, the technique used to deal with the risk Categorized into categories:

  • Avoid risk by not conducting risky activities and choosing to do activities that do not risk.
  • Mitigation/reduction of risk by carrying out measures to reduce the chances of an unverified event. For example by choosing competent people to be employed in the project.
  • Accept the risk of maintaining a risk-taking job by not making any changes but preparing contingency plans if the risk occurs.
  • Risk transfer by transferring the risk to other parties for example by purchasing insurance.

Risk management planning.

Qualitative analysis of risk management greetings is the process of assessing the impact and possible risko that has been identified. This process is done by developing risks based on their impact on project objectives. This analysis is a way of prioritization of risk so as to form a risk image that should be given special attention and how to respond to such risks in case.

Quantitative risk analysis is a method to identify the possible risk of system failure and predict the magnitude of the loss. This analysis is done by applying a mathematical formula associated with the financial value. Mathematically, risk calculation is done by multiplying the degree of possible incidence with the impact. The results of this analysis can be used to take a strategic step in addressing the identified risks. Although this quantitative analysis uses a mathematical approach, it is principally a follow-up to the results of qualitative analysis. The main difficulty in quantitative risk analysis is when determining the level of possibilities because statistical data is not necessarily available for all events.

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