RICHWF.I.!

Subject: PROJECT MANAGEMENT

Author: Mr. Viron R. Calma
Editor: Mr. Joven Q. Lumague
Reviewer: Mr. Victor T. Reyes

Lesson 4: 1. THE PROJECT PLAN

11. RISK MANAGEMENT PROCESS
(Weeks 7 and 8)

When you begin the planningprocessfor a project, one

ofthefirst things you need to think about is: what can go wrong?

It sounds negative, but realistic project managers know this

kind of thinking is preventative. Problems will inevitably come up, and
you need an easing strategy in place to understand how to manage risks
when projectplanning.

Description of the Lesson:

Objectives (What I Need to Know)-

At the end of this lesson, the student is expected to do the following:

I. Understand the overview of the project plan;

2. Learn the project activity network diagram and the critical path;
3. Learn the risk management process in project management; and
4. Know the six steps in the risk management process.

Day I: Pre-assessment (What I know)

Instruction: Encircle the letter of the correct answer. (2 points each)

Date Accomplished:

1. A graphical representation (just like a flow chart) that displays the flow in which project's terminal
elements must be accomplished.
a. project network c. PERT and CPM
b. critical path d. Gantt chart
2. An activity network diagram helps you to identify the most rational sequence of events for a project,
and gives the basis of a realistic project timetable.
a. True c. Maybe
b. False d. I don't know

3. The provides you the information of the duration to complete the entire project.

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 a. Gantt chart c. critical path
b. PERT and CPMd. project network

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4. The process of identifying, analyzing and responding to any potential risk that
life cycle of a project to help the project remain on track and meet its goal.
a. strategic planning process c. scenario planning
b. strategic management process d. project risk
management

5. The process of determining, categorizing, prioritizing and planning for risks before they becom•
issues.

a. risk management c. scenario planning

b. strategic management process d. financial management

Day 2: Lesson Content (What's new)

Part 1: THE PROJECT PLAN

A. The Project Network

A project network, also known as project activity network, is a graphical

representation (just like a flow chart) that displays the flow in which project's terminal
elements must be accomplished. Every terminal element represents an activity that
associates with a work package at the lowest level ofthe work breakdown structure
(WBS).

Though the WBS doesn't identify the floeof events or the length of any activity,
the project networkaimsto recognieathe flow i!
fWhiehactivities OCcUi' and other activities, if
any, on which a partic•tilaå• activity dependS.

There are several approaches used to create a project activity network. Some
techniques that are commonly used include Gantt charts, Critical Path Management
(CPM) and the Project Evaluation and Review Technique (PERT). In some techniques,
each terminal element is represented by a node on a graph, while in others it is
represented by an edge (line connecting two nodes). Every terminal element should align
on a single path through the network.

An example of a project activity network diagram is illustrated below.

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 A genericproject activity network diagram. Source: https://www.technologyuknet/

An activity network diagram helps you to identify the most rational sequence of
events for a project, and gives the basis ofa realistic project timetable. It will allow you to
determine the total amount of time needed for the project, identi$' the order in which
tasks

219
must be carried out, and give emphasis to those tasks that are critical to the project schedule. When
the WBS has been finalized, you will have a list of activities at different levels Of decomposition
that must be completed in order to achieve the project's goals.

You can now identify the task dependencies and the length of each task to allow a
schedule to be made. Project management software is now available that will execute the
scheduling for you, compute the overall time needed for accomplishing the project, and determine
the schedule's critical path. All you have to do is to input the duration of each task and determine
any task dependencies. The software will provide network activity charts and Gantt charts based
on the information that you give.

Although project management software is easily accessible these days, it is helpful to understand
the process by which an activity network diagram is created. The following steps can be used to do the
process manually:

1. Make a list of all of the tasks that need be completed (these are the work packages
identified as a result of creating the work breakdown structure) and write the name
of each task on a small piece of card or paper (let's assume we will use Post-it
notes, which are ideal for this purpose).

2. Determine which task must be carried out first (call it Task I), and place it
on the left-hand side of a large work surface (for the purposes of this
exercise I will assume we will use a whiteboard).

3. Find any other tasks that can be Carried out at the same time, and place
them above
pr below TåskA on the whiteboard, Identify theseßasks (if any) as Task
2, Task 3 . . . and so on.
4. Determine what the next task will be (Task n), and place it to the right of
Task I. Again, find any other tasks that can be carried out at the same
time, and place them above or below Task n. Continue to number each
task as you place it on the whiteboard.
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 5. Repeatthe process until all ofthe tasks are arranged in sequence, and in
parallel, and make sure that each task has been assigned a number.

6. Draw an arrow from each task to the one that immediately follows it.

7. Estimate the time required for each task and write it on the Post-it (use the
same unit of time for each task, i.e. hours, days, or weeks).

8. Find the critical path. This is the path of connected activities which, if the
duration of all of the tasks on it is added together, requires the longest
time to complete.

The criticalpath provides you the information ofthe duration to complete the entire project
(based on current information). The tasks on the critical path, therefore, must be watched
more closely than those tasks not on the critical path, because any set back in one of these
tasks will cause the critical path to increase in length (the time required to complete the
project will increase). One way of minimizing the overall duration of the project is to
accomplish faster one or more tasks on the critical path — if this is possible. For other paths
through the network, every task can be delayed — up to a point — because it is not on the

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 critical path. Always remember seriously delayed, the path affected may result to
an overall duration that excee the critical path. It will then become the new
critical path.

Gantt charts, PERT and CPM are all helpful techniques that give information
project schedules in a graphical way, but they do not provide you all the information. They
do not tell you, for example, what are the requirements for a specific task. Activity network
diagrams are images of the current status of a project at a specific time. It will be essential to
update them as situations change. If a task is taking more time than expected, it may affect
the overall project schedule. The same is true for tasks that are completed ahead of schedule.
The effect on resources will not be evident from looking at the network diagram alone, and
other tools and techniques must be utilized to identify where the peaks and troughs will
show in terms of the demand for critical project resources.
Reference: https://www.technologvuk net/computing/sofiware-
development/project-management/project-networks.shtml

Part 11: RISK MANAGEMENT PROCESS

B. The Risk Management Process in Project Management

When you begin the planning proceSs project, one of the first things you
need to think about is: what can go wrong?

It sounds negatiQ/é, Ebut fealiSti€Üöjeci inånagerSkhowthiS kind of thinking is

preventative. Problems will inevitably come up, and you need an easing strategy in place
to understand how to manage risks when project planning.

Source: https://www.projectcentral.com/blog/project-risk-management/

What is Risk Management on Proiects?

Project risk management is the process of identifying, analyzing and responding

to any potential risk that emerges over the life cycle of a project to help the project
remain on track and meet its goal. Risk management isn't only reactive; it should also be
part of the planning process to figure out risk that can emerge in a project and how to
resolve that risk if it ever occurs.

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 A risk is anything that could potentially affect your project's timeline, performance
or budget. Risks are potentialities, and in the context of project management, if they

41 9
become realities, they then become identified as "issues" that must be resolved. so, risk
management, then, is the process of determining, categorizing, prioritizing and planning for
risks before they become issues.

Risk management can mean several things on different types of projects. On

wideranging projects, risk management techniques might include substantial detailed
planning for each risk to ensure easing strategies are in place if issues ever arise. For smaller
projects, risk management might mean a simple, prioritized list of high, medium and low priority risks.

How to Manage Risk?

To begin managing risk, it's very important to start with a clear and direct
definition Of What your project needs to deliver. In other words, write a very
comprehensive project charter, with your project vision, objectives, scope and
deliverables. This way, risks can be determined at every Stage of the project. Then
you'll want to engage your team early in determining any and all risks.

Do not fear in getting more than just your team involved to determine and
prioritize risks, too. A lot of project managers just email their project team and request to
send them things they think might become a problem on the project. But to better plan
project risk, you should get the whole project team, your clients' representatives, and
vendors into one room and do a risk identification session.

Source: https://unvw.projecttimes.com/articles/using-risk-management-in-your-projects/

With every risk you determine, you'll want to write it somewhere—using a risk
tracking template assists you to prioritize the level ofrisk. Then, make a risk management
plan to identify the negative and positive impacts to the project and what moves you will
make to deal with them. You'll want to schedule regular meetings to keep track of the
risk while your project is ongoing. Transparency is very important.

C. Six Steps in the Risk Management Process

1. Identify the Risk

You can't settle a risk if you no idea what it is. There are several ways to identify risk.
As you go through this step, you'll want to gather the data in a risk register.

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 One way is deliberating with your team, colleagues or stakeholders. Find the
individuals with related experience and conduct interviews so you can collect the
information you'll need to both determine and resolve the risks. Think of the many
things

519
that can possibly go wrong. Write them down. Do the same with historical data projects.
Now your list of potential risk has grown.

Assure the risks are rooted in the cause of a problem. Basically, reach
dowrv root cause to determine if the risk will have the kind of effect on your
project that t identifying. When trying to lessen risk, it's good to listen to your
intuition. This can you to unexpected scenarios that you just assume couldn't
happen. Always put in mind e. not be overconfident. Use process to identify risks
from non-risks.

2. Analyze the Risk

Analyzing risk is difficult. There are never enough details you can collect. Of
course, a lot of that data is complicated, but majority of industries have best practices, which
can aid you with your analysis. You might be amazed to discover that your company already
has a framework for this process.

When you assess project risk you can definitely and proactively resolve many
impacts, such as avoiding potential litigation, addressing regulatory issues, complying
with new legislation, minimizing your exposure and impact.

So, how do you analyze risk in your project? Through qualitative and quantitative
risk analysis; you can identify how the risk is going to affect your schedule and budget.

Project management software belpyyayfiderstand risk by keeping track of your project.

Project Managermay takecthgt one s!ep further with ygal-time dashboards that
shows live data. Uillikeother sOfrwareåoOls, you åoh'Qneedto set upour dashboard. It's
ready to give you an accurate view of your project from the get-go. We compute the live
data and then show it to you in easy-to-read graphs and charts. Identify issues quicker as
you monitor time, costs and more.

3. Prioritize the Risk

Not all risks are of the same weight. You need to assess the risk to know what
resources you're going to need to settle it when and if it occurs.

Having a long list of risks can be overwhelming. But you can resolve this by
simply classifying risks as high, medium or low. Now there's a horizontal line and you can
view the risk in context. With this perspective, you can start to plan for how and when
you'll resolve these risks.

Some risks are going to need immediate attention. These are the risks that can
destroy your project. Failure isn't an option. Other risks are crucial, but perhaps not
threatening the success of your project. You can act suitably. Then there are those risks

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 that have little to no effect on the overall project's schedule and budget. Some ofthese
lowpriority risks might be important, but not crucial enough to waste time on.

4. Assign an Owner to the Risk

All your hard work determining and assessing risk is for nothing if you don't
assign someone to oversee the risk. In fact, this is something that you should do when
writing the risks. Who is the member who is responsible for that risk, determining it
when and if it should occur and then leading the work towards resolving it?

M W 619

That decision is up to you. There might be a team member who is more proficient or experienced
in the risk. Then that member should take lead in resolving it. Or it might just be a random choice. But
of course, it's better to allocate the task to the right member, but equally important in making sure that
every risk has a member assigned for it.

Remember, ifyou don't assign each risk to a member a member of the team, you're opening
yourself up to more risk. It's one thing to determine risk, but if you don't manage it then you're not
protecting the project.

5. Respond to the Risk

Now in the real world. You've found a risk. All that planning you've made is
going to be applied. First, you need to identify if this is a positive or negative risk. Is
it something you could utilize for the betterment of the project?
For every major risk identified, you create a plan to resolve it. You create a strategy;
it can be preventative or a contingency plan. You then act on the risk by how you prioritize it.
Build communications with the member assigned to that risk and, together, make a decision
on which of the plans you formulated will be used to resolve the risk.

6. Monitor the Risk

You can't the progress 'Ofthatnitiative. This is where the monitoring comes
Whoever the risk
in. is assigned to, will be responsible for monitoring its progress towards its
resolution. But you will need to be updated to have an overview of the project's
overall progress to determine and monitor new risks.

You'll want to facilitate sets of meetings to manage the risks. Make sure you already
have a decision regarding the communication system to do this. It's best to have different
channels committed to communication.

Whatever you decide to do, always put in mind: always be transparent. It is better if
every team member in the project has an idea of what is going on, so they know what to
look for and assist in managing the process to resolve potential risks.
Reference: https://www.projectmanager.com/blog/risk-
managementprocess-steps

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 Day 3: Review
Good morning. How was the lesson yesterday? I hope you enjoyed the lesson. Today, I am encouraging you
to review your notes. After reviewing, answer the activity below.

Instruction: Write T if the statement is correct; otherwise, write F if the statement is incorrect on the space
provided before each number. (2 points each)

Date Accomplished:

719
l. Project management software is now available that will execute
the sc you, compute the overall time needed for accomplishing the project, and determine
the schedul path.

2. One way of minimizing the overall duration of the project is

to accomplish f one or more tasks on the critical path — if this is possible.

3. Gantt charts, PERT and CPM are all helpful techniques that
give information about project schedules in a graphical way, but they do not provide you all the
information.

4. When you assess project risk you can definitely and proactively resolve many
impacts, such as avoiding potential litigation, addressing regulatory issues, complying with new
legislation, minimizing your exposure and impact.

5, Risk management can mean several things on different types of projects.

Day 4: Valuing/lntegration (What's more)

Instruction: Arrange the steps/processes by which an activity network diagram is created manually. Number
the blanks from I as the start and 7 as the end. (7 points)

Date Accomplished:

Repeat the process until all of the tasks are arranged in sequence, and in parallel, and make
sure that each task has been assigned a nåmber.j

Find the critical

Determine which task must be carried out first, and place it on the left-hand side of a large
work surface.

Draw an arrow from each task to the one that immediately follows it.

Make a list of all of the tasks that need be completed and write the name of each task on a

small piece of card or paper.

Estimate the time required for each task and write it on the Post-it.

Project Management Week 7-8 Page

 Determine what the next task will be (Task n), and place it to the right of Task 1. Again, find
any other tasks that can be carried out at the same time, and place them above or below Task n. Continue to
number each task as you place it on the whiteboard.

Find any other tasks that can be carried out at the same time, and place them above or below
Task I on the whiteboard. Identify these tasks (if any) as Task 2, Task 3 . . . and so on.

Day 5: Application (What can I do)

Good Day! Today, we will do something different. If you were able to answer our activity yesterday, I bet
you were. This is what I want you to do.

Instruction: Identify the six (6) steps in the risk management process and briefly discuss each step. (3 points
each)
Date Accomplished:

819

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