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Risk Management in GFDK2a - Coggle Diagram
Risk Management in GFDK2a
One thing we should know for sure in our project is that there are uncertainties which will hit us and torpedo our initial plans
The challenge is how to deal with the risks in our project
In RM our attitude towards risks plays an important role
are you a risk seeker yourself?
what is your attitude towards risks in our project?
do you see a lot of bears and pitfalls along the route?
is the famous glass of water half empty or half full?
or do you feel more comfortable avoiding any risks upfront?
our attitude will influence the outcome of our project risk workshop
In a project context, we distinguish the cause of a risk, the risk event itself, and its effect
The cause is the circumstance that exists today that provides uncertainty to the project
The event is the possible event that might or might not happen
The effect is the result of the event, which has an impact on the project objectives
Although most often the negative effects are considered, we stress the importance the upside of risks as well.
And opportunities are equally important.
So there are two sides of the coin.
The first side is the threats, and the second side is the opportunities
Cost
Time
Quality
Sustainable development (reputation, environment, etc)
As a result of
define cause
an
uncertain event
may occur, which would lead to an
effect on the project objectives
Let's illustrate with an example the structured risk description, because it helps us in selecting an appropriate mitigation strategy
Cause
Cows are standing in a meadow, but there is no fence between the meadow and the lake where cows drink water
Summarizing this in a structured definition provides: "Because of the absence of a fence in the meadow, the cow might fall into the lake which will decrease her milk production
Note that our attitude will influence the exact formulation of the risk and its effects
what to do about this risk?
We can choose between 4 risk mitigation strategies
Avoid
End risk exposure. If we are really scared about the effects, we might want to avoid the risk
In our example this means empty the meadow and the farmer changes business
Reduce
Treat the risk to reduce the probability and/or impact on objectives to an acceptable level.
In the example of the cow, we might decide to treat the risk by putting a fence around the lake. Hence, reducing the probability of this event happening. This means we adjust the scope of our project in order to mitigate the risk
Transfer
Find another party to deal with the risk
We might even want to transfer the risk to an insurance company
Accept
No action is taken although it is possible to develop contingency plans (either in actions or a reservation in time/money/resources)
We just take the risk, but we prepare a contingency plan in case the risk fires. So, we could establish a hot line with a local crane driver
What happen if the risk is upside (which means an opportunity)?
Realise
Ensure that the risk will definitely occur
Water for free! Request the respective permits to ensure the water can be utilised
Enhance
Increase impact and/or likelihood
Use the water not only for the cows, but also as source to irrigate the crops and grass during dry season
Share
Find another party to improve management of the risk (by realising enhancement)
Join with other farmers in the neighbourhood to buy a pump to enhance the water supply
Accept
No action is taken although it is possible to develop contingency plans (either in actions or a reserve in time/money/resources)
The cows continue drinking water for free, but in case the lake dries out, there is a water tank
The risk event
As a result, a cow might fall into the lake
Effect
Obviously, this will influence its milk production and hence the farmer's income
In the worst scenario the cow might even drown. What a lost of capital