mp09

=MP09 – Managing Risk=

1. Introduction
Planning a project normally means to work with estimates for the involved parameters like costs, time, quality etc. Therefore within every project one has to face the fact that there exist uncertainties. Additionally there are a lot of events that may happen or not and which may have negative (risk) or positive (chance) influence to the objectives of the project.

One main topic of the course is to work out what is necessary to implement a risk culture in a company or a project team. Here aspects like attitude to risk, open communication, and compensation and reward mechanism have to be mentioned.

The other main topic is the operative risk management process that contains the risk management plan, risk identification, qualitative and quantitative risk analysis, risk response planning, and risk monitoring and control.

2 Course Structure
• Introduction • Risk culture • Aspects of risk • The PMBOK-framework of project risk management • Risk Management Planning • Risk Identification • Qualitative Risk Analysis • Quantitative Risk Analysis • Risk Response Planning • Risk Monitoring and Control

3 Case Studies
• Different case studies concerning risk in time, in costs, and in quality

4 Parameters
• ECTS: 3 • Hours of study in total: 90 • Weekly hours per semester: 2 • Contact hours: 30 • Self study hours: 60 • Course characteristics: compulsory • Course frequency: every year - winter semester • Maximal capacity: 15 students • Course admittance prerequisites: no special requirements • Skills trained in this course: professional, methodological, and personal skills • Assessment of the course: • 75% contributions within the course (homework, group work, presentations, case studies) • 25% written or oral examination at the end of the course • Teaching staff: Prof. Dr. Wolfgang Tysiak

5 Learning outcomes

 * 5.1 Knowledge**

The students can


 * explain what risk finally is
 * explain personal, cultural, and organizational parameters of risk regarding awareness, avoidance, etc.
 * describe the different phases and the core issues of a risk management process
 * explain the different dimensions of risks (probability of occurrence, impact, etc)
 * explain how to collect necessary information for risk evaluation and how to start the evaluation of risk
 * explain that there is no chance without risk


 * 5.2 Skills**

The students can


 * detect and identify risks by applying creativity techniques, using risk breakdown structures, etc.
 * apply methods to evaluate risks
 * use techniques to analyze compound risks (e.g. Monte Carlo simulation)
 * apply the appropriate risk response measures to the individual risks

in a given context in the course


 * 5.3 Competence - attitude**

They are able to


 * assess the given risk culture
 * able to develop and improve a risk culture
 * detect and identify risks by applying creativity techniques, using risk breakdown structures, etc.
 * apply methods to evaluate risks
 * use techniques to analyze compound risks (e.g. Monte Carlo simulation)
 * apply the appropriate risk response measures to the individual risks

in a new context / project


 * 5.4 On scaling outcomes**

The assessment of learning outcomes is based upon the following core perspectives:


 * Completeness – regarding identified risks and categories of risk
 * Analysis – identify and analyze risks in regard of the probabilities of occurrence, the impact, the correlation with other risks…
 * Concept building - develop a concept for risk management and a risk culture
 * Problem solving – translate a problem in a mathematical model (Excel)
 * Tools - apply Monte Carlo simulation to analyze compound risks
 * Complexity – regarding risk structure, processes, and models

6. Teaching and training methods:

 * Lectures introducing concepts, methods and tools
 * Group work to practice concepts and methods, to develop skills and to work on case studies
 * Home work to add individual contributions
 * Presentations to communicate results

7. Course mapping
This course is linked to other courses of the study program in the following way:


 * MP01 introduces to the study programme and to each individual course.**

**MP02: Life-cycle Concepts, Maturity Models, Customer Relation Ship, Stakeholder Management** MP02 follows MP01 embedding projects into life-cycles, and considering maturity models for project management, as well as customer relationship and a deeper stakeholder analysis.

MP03 includes standards with respect to risk management like PMBOK or PMI Program Management with chapters on risk management. Students learn that risk management is included in these standards and that there are well developed processes dealing with risk management.
 * MP03: Standards and Mainstreams**

MP04 deals with core issues on project planning including work breakdown structure, resource planning, and time planning. Here students learn that project planning has to consider risks. Elementary aspects of risk management are discussed here. Further contributions on risk management are included in MP09.
 * MP04: Project Planning**

Risk controlling is a central aspect of risk management. Therefore a permanent risk monitoring is needed.
 * MP05: Project Control**

Human resources can cause risks and can help to manage risk. MP06 contributes to the human side of risk management. On the other hand the risk management process can only be successful if there is an implemented risk culture. Additionally the reward and compensation mechanism within the project team has much influence on the behaviour towards risk.
 * MP06: Human Resource Management in Projects, Team Building and Leadership**

The development of a project organization has an impact on risk management.
 * MP07: Project Organization**

Quality management contributes to risk management.
 * MP08: Quality Management**

Every risk management needs a special budget for the covering of risks (e.g. for insurances).
 * MP10: Project Economics**

This course supports communication, negotiations and conflict management within a project organization and with stakeholders. Especially if you consider risks an open communication is indispensable.
 * MP11: Communications, Negotiation and Conflict**

Social competencies are discussed in relation to risk attitude and risk culture.
 * MP12: Social Competencies**

Change management is strongly linked to risk management. Change request are checked under risk aspects. Organizational change is risky.
 * MP13: Managing Change**

Especially in the risk identification phase a lot of creativity techniques are needed.
 * MP14: Creativity and Decision Making**

Intercultural communications will reduce risks in international projects with intercultural teams.
 * MP15: Intercultural Communications**

Risk management needs information and knowledge management to support risk registers, risk analysis, etc.
 * MP16: Information and Knowledge Management**

MP09 contributes to MP17. MP17 will include the special aspects of financial risks in projects.
 * MP17: Project Finance**

There are different relations to MP09, let it be the definition of responsibilities for risks within contracts, let it be the legal aspects or the collaboration with insurance companies.
 * MP18: Contracts, Procurement and Legal Aspects**

MP19 include the special aspects of risk management in programs. Risk management processes in program management are discussed here.
 * MP19: Program and Portfolio Management**


 * MP20: Safety, Health and the Environment**

8. References:
1. A guide to the project management body of knowledge, (PMBOK®Guide) PMI 2008 2. Chris Chapman, Stephen Ward: Project Risk Management, John Wiley & Sons, Chichester 2003 3. Andrew Holmes: Smart Risk, Capstone Publishing Limited, Chichester 2004 4. Tom DeMarco, Timothy Lister: Waltzing with Bears, Dorset House Publishing, New York 2003 5. Rita Mulcahy: Risk Management – Tricks of the Trade for Project Managers, RMC Publications, 2003 6. Schelle/Ottmann/Pfeiffer: Project Manager, GPM German Association for Project Management, 2006 7. Harold Kerzner: Project Management, John Wiley & Sons, Hoboken, New Jersey, 2009 8. Andy Garlick: Estimating Risk – A Management Approach, Aldershot, Gower, 2007