The next assignment will be about risks, and it should be one of the less demanding ones. 

In risk management, we first identify all the uncertain events that may happen in the project. Be careful as this can have both positive (opportunity) and negative (threat) impacts on the project. After all the stakeholders identify all the risks, qualitative analysis begins. Here, every risk is assigned two abstract values (for example, 1 to 5) to assess the probability and impact of each risk if it were to occur. The risk of a team member becoming ill may have a low probability and impact (let's say [2, 2]); the possibility of a customer losing interest in the product can be similarly low, but the impact would trigger the immediate end of a project ([2, 5]). Here, you can also multiply these values to get the qualitative exposition of the risk -- in our examples, it would be 2x2=4 and 2x5=10. It is apparent here which risks should make you more nervous as a PM. https://www.project-risk-manager.com/wp-content/uploads/2017/03/5x5-Risk-Matrix.png

After the qualitative analysis, the quantitative analysis takes place. For all your risks, you exchange your probability to percentage points (if some incident occurs once in 10 years, and your project is planned for 2, maybe the probability is 20%). You also exchange the "abstract impact" for money earned/lost due to the risk (if the risk presents a delay in work for two weeks, you may want to count in all the wages + fees for missing the deadline, for example -500k CZK). The quantitative exposition of the risk is yet again a multiplication of the two numbers; here, the "value" of the risk is 100k CZK (an opportunity would have a negative value).

In the next step in planning the risks, you plan for the risk response, i.e., what you are going to do about each of the risks. There can be three types: Avoid, Mitigate and Transfer (or Exploit, Enhance and Share for positive risks). You can also accept the risks if their exposition isn't too high. In the last step, you create contingency plans for all the risks, i.e. what action should be taken if the risk occurs. No matter what responses you implement, you won't be able to avoid, mitigate or transfer all of them, and you need to plan your reactions before the project execution phase. 

The risk management is essential for a successful PM. Risk management renders projects more predictable: the project team is more aware and able to react to different situations without stress, you as PM, can better argue for a proposed budget, the awareness of opportunities may bring additional value to the company or customer, etc. Many PMs don't do proper risk management and fail their projects due to this mistake. 

For your next assignment:

•  identify 15+ risks of your project of different categories (you can google the possible grouping of risks)
• assess the qualitative values of these risks
• evaluate the quantitative values of these risks
• order the risks by their values
• plan your responses to each risk (ideally with [type -- short description in 1 sentence])
• plan your contingency plans for each risk (short description (1 sentence) of what you'll do if the risk occurs)

Add the Risk Management section to your single .pdf with all the previous Assignments, and submit it to “odevzdávarna” in IS MU by Friday, 10.5.2024.