MODULE 4.

PLANNING PROJECTS
PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI
 TOPICS
 Crashing project time,
 Resource loading and levelling,
 Goldratt's critical chain,
 Project Stakeholders and Communication plan Risk Management in projects:
 Risk management planning,
 Risk identification and risk register,
 Qualitative and quantitative risk assessment,
 Probability and impact matrix.
 Risk response strategies for positive and negative risks

Prepared and Presented by: Dr. Basavaraj Talikoti

CRASHING PROJECT TIME

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

 CRASHING
PROJECT TIME
 There’s never enough
time when managing a
project. That’s why we
make schedules—to try
and control time, just
enough to get your
deliverable by the
deadline. Sometimes,
however, things go awry.
Changes in a project are
common of course, but
it’s the project
manager’s responsibility This is when the triple constraint usually comes into play; scope, time and budget. If one
to make sure that those
falls behind, the others have to make up the slack. There are many ways to adjust things
changes don’t produce a
negative impact on the
on your project to make up for the time you’ve lost. That includes adding extra
project schedule. resources along the way, which is a method called project crashing.

Prepared and Presented by: Dr. Basavaraj Talikoti

WHAT IS PROJECT CRASHING?

 Project crashing is when you shorten the duration of a project by reducing the time of one or more tasks.
Crashing is done by increasing the resources to the project, which helps make tasks take less time than what they
were planned for. Of course, this also adds to the cost of the overall project. Therefore, the primary objective of
project crashing is to shorten the project while also keeping costs at a minimum.
 Just as the triple constraint says, if you reduce the duration of the project, or its time, then costs will in turn have
to increase. It’s a trade off. Crashing project management accounts for the triple constraint, in that to achieve it,
you include additional resources or reduce the project requirements or scope. However, such drastic measures
cannot be implemented without the sponsor or primary stakeholders agreeing to the changes.
 A result of project crashing can be a change to the critical path and the emergence of a new, different critical path.
Project crash management requires that you return to your project schedule to make sure you’re aware of
changes that have occurred there because of the project crashing.

Prepared and Presented by: Dr. Basavaraj Talikoti

 PROJECT CRASHING MANAGEMENT STAGES
 Once you’ve made the decision to use project crashing, there are some steps you’ll want to follow to get the results
you want.
1. Critical Path: The first thing to do is analyze the critical path of your project. This will help you determine which tasks can
be shortened to bring the project to a close sooner. Therefore, if you haven’t already, calculate your critical path, see which
tasks are essential and which are secondary to the project’s success.
2. Identify Tasks: Get a list of all the tasks you have, then meet with those who have been assigned to complete them. Ask if
they believe any of the tasks they’re responsible for are in the critical path and can be cut down. Then, start looking for ways
to tighten up those tasks.
3. What’s the Trade Off?: Once you’ve narrowed down the tasks in the critical path that you believe can be shortened, start
calculating how much adding more resources will cost. Find the tasks that can be allocated additional resources, and come in
sooner with the least amount of strain on your budget.
4. Make Your Choice: When you know what you will have to spend (compared to how much time you’ll save) for each of the
tasks in your critical path, you must now make a decision and choose the least expensive way forward. Project crashing is not
just adding resources to get done faster, but it’s getting the most in return for that extra expense.
5. Create a Budget: Like any project, once you’ve decided on your plan, you have to pay for it. Making a project crashing
budget is the next step in executing your project crashing plan. You’ll have to update your baseline, schedule and resource plan
to align with your new initiative.
Prepared and Presented by: Dr. Basavaraj Talikoti
RESOURCE LOADING AND LEVELLING

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

 WHAT IS RESOURCE
LOADING?
 Resource loading in project
management is the process of
loading employees’ total available
hours with assignments. In resource
loading, an employee will typically be
assigned a percentage of a project,
and can then be assigned additional
project percentages until that
employee reaches 100% of their
hourly work week capacity. Once an
employee reaches 100%, they are Resource loading's main drawback is that, while managers are technically able to schedule
effectively booked and should not be employees for 100% work, doing so will inevitably mean that employees end up overloaded
scheduled for more work. By looking
at some point.This can happen when unexpected responsibilities come up during a project.
at a resource loading chart, a
In a simple resource loading example, if an employee is scheduled at 100% and has to fill in
manager can view the total hours
for another employee who is sick or unavailable, that employee will then be working at
their employees can work for a
over 100% capacity. Projects can go over deadline or budget due to workforce limitations if
given time period and adjust each
you use resource loading to manage workloads.
team member’s assignments
accordingly.
Prepared and Presented by: Dr. Basavaraj Talikoti
 WHAT IS THE DIFFERENCE BETWEEN RESOURCE LOADING AND
RESOURCE LEVELING?
 Resource loading and resource-leveling are similar in that they both
deal with manpower. However, resource loading attempts to balance
other additional elements. The difference between resource loading
and resource leveling is that resource loading looks to maximize
workforce capacity, whereas leveling prioritizes timelines and
budgets as well.
 Resource leveling requires managers to have an understanding of
whether a project is critical. A manager will then shift all available
resources and money to complete those projects deemed critical.
When resources are utilized, resource leveling will dictate that start
or end dates be adjusted to reduce the conflict.
 The drawback of resource leveling is that it can be difficult for
managers to anticipate which projects are the highest priority ahead
of time. Resource loading and leveling are both important elements
in the project management decision-making arena.
Prepared and Presented by: Dr. Basavaraj Talikoti
 HOW TO ANALYZE AND CALCULATE RESOURCE LOADING?

 Resource loading = Scheduled hours per time period / Hours of capacity per time period
 These resources can be booked for more than one task at once subject to their availability and capacity. For
example, a resource can be loaded to 60% of its total capacity to perform one task and the rest 40% on other
tasks.These tasks can be BAU/admin or more.
 In other words, if a resource is available to work for 8 hours a day, he spends 4.8 hours towards the actual task. The
remaining 3.2 hours is used to attend meetings and carry out other related work. For calculating resource loading,
we consider the total number of hours that he spends on the actual task instead of available hours.
 Another critical factor that enables managers to utilize their workforce most efficiently is resource-leveling. Even
though resource leveling and resource loading enable efficient resource scheduling, they have certain notable
differences.

Prepared and Presented by: Dr. Basavaraj Talikoti

 CONSEQUENCES OF INACCURATE AND OVERLOADING OF
RESOURCES.
 Loss of employee productivity: When employees are over or under-allocated, it may lead to burnout or inefficient
utilization of their skills. Moreover, if they are booked for non-billable or admin tasks, it will reduce their billable utilization.
When their talent is not leveraged at its best, it will result in lower productivity levels.
 Delays in project deadlines: Inappropriate resource loading is a sign of inefficient project resource planning. If less
experienced resources are scheduled for highly-specialized work, it will cause delays in submissions.
 Decline in employee morale: Decreased productivity and inadequate exploitation of resources and their skills bring down
their morale. Employees are not at their productive best when their work does not add value to the organization.
 Unplanned employee attrition: Employees look up to their leaders to provide them opportunities to grow and unleash
their true potential. Incorrect or wrongful resource loading does not fulfill their expectations. When the workforce feels that
their expectations are not met at their workplace, they will look for opportunities elsewhere leading to unplanned attrition.
 Decreased profitability: Sub-optimal resource utilization and inaccurate resource scheduling directly affect the project’s
progress and quality.When clients are not happy with the results, it will cost you the client thereby reducing the profitability.
 Owing to these consequences, resource loading becomes an important parameter in deciding a project’s success.

Prepared and Presented by: Dr. Basavaraj Talikoti

GOLDRATT'S CRITICAL CHAIN

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

WHAT IS GOLDRATT'S CRITICAL
CHAIN THEORY?
 In recent years Eliyahu M. Goldratt has developed several
interesting ideas about project management. One of the
more controversial ideas is his theory of critical chains. This
is a method of adjusting schedules to reduce the probability
of projects being late.
 Using the critical chain theory involves delaying activities'
schedules until the activities are scheduled close to their
late schedule instead of being scheduled to their early
schedule as is traditionally done in scheduling projects.
Because the late schedule essentially places all of the
activities on the critical path, a buffer is placed into the
schedule to allow delays in the project activities without
delaying past the promised project completion date.
 According to Goldratt, delaying the work of the project to
more closely follow the late schedule has the advantage of
allowing the project team to learn from the experience and
knowledge gained in doing other parts of the project.

Prepared and Presented by: Dr. Basavaraj Talikoti

PROJECT STAKEHOLDERS AND
COMMUNICATION PLAN IN PROJECTS

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

 WHAT IS A STAKEHOLDER IN
PROJECT MANAGEMENT?
 Stakeholders are those with an interest in
your project's outcome.
 They are typically the members of a project
team, project managers, executives, project
sponsors, customers, and users.
 Stakeholders are people who will be affected
by your project at any point in its life cycle,
and their input can directly impact the
outcome.
 It's essential to practice good stakeholder
management and continuously communicate
to collaborate on the project.

Prepared and Presented by: Dr. Basavaraj Talikoti

 TYPICAL KEY STAKEHOLDERS IN A PROJECT
 Some of the typical key project stakeholders you'll find in a project include:
 Customers: The direct user of a product or service, often both internal and external to the company executing
the project
 Project manager: The project's leader
 Project team members: The group executing the project under the project manager's leadership
 Project sponsor: The project's financier
 Steering committee: An advisory group providing guidance on key decisions, which includes the sponsor,
executives, and key stakeholders from the organization
 Executives: The top management in the company executing the project; those who direct the organization's
strategy
 Resource managers: Other managers who control resources needed for executing the project
 There are many more examples of project stakeholders, including: sellers/suppliers, contractors, owners, government
agencies, media outlets, and even society at large.
Prepared and Presented by: Dr. Basavaraj Talikoti
 WHEN YOU START THE PLANNING PROCESS
FOR A PROJECT, ONE OF THE FIRST THINGS
YOU NEED TO THINK ABOUT IS: WHAT CAN
GO WRONG?
IT SOUNDS NEGATIVE, BUT PRAGMATIC
PROJECT MANAGERS KNOW THIS TYPE OF
THINKING IS PREVENTATIVE. ISSUES WILL
INEVITABLY COME UP, AND YOU NEED A
MITIGATION STRATEGY IN PLACE TO KNOW
HOW TO MANAGE RISKS ON YOUR PROJECT.
BUT HOW DO YOU WORK TOWARDS
RESOLVING THE UNKNOWN? IT’S SOUNDS
LIKE A PHILOSOPHICAL PARADOX, BUT

RISK MANAGEMENT PLANNING DON’T WORRY—THERE ARE PRACTICAL

STEPS YOU CAN TAKE. IN THIS ARTICLE, WE’LL
DISCUSS STRATEGIES THAT LET YOU GET A
GLIMPSE AT POTENTIAL RISKS, SO YOU CAN
IDENTIFY AND TRACK RISKS ON YOUR
PROJECT.

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

WHAT IS RISK MANAGEMENT ON PROJECTS?
 Project risk management is the process of identifying, analyzing and responding to any risk that arises
over the life cycle of a project to help the project remain on track and meet its goal. Risk management
isn’t reactive only; it should be part of the planning process to figure out risk that might happen in the
project and how to control that risk if it in fact occurs.
 A risk is anything that could potentially impact your project’s timeline, performance or budget. Risks are
potentialities, and in a project management context, if they become realities, they then become classified
as “issues” that must be addressed. So risk management, then, is the process of identifying, categorizing,
prioritizing and planning for risks before they become issues.
 Risk management can mean different things on different types of projects. On large-scale projects, risk
management strategies might include extensive detailed planning for each risk to ensure mitigation
strategies are in place if issues arise. For smaller projects, risk management might mean a simple,
prioritized list of high, medium and low priority risks.

Prepared and Presented by: Dr. Basavaraj Talikoti

RISK MANAGEMENT FRAMEWORK

Prepared and Presented by: Dr. Basavaraj Talikoti

RISK IDENTIFICATION AND RISK REGISTER

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

 RISK IDENTIFICATION
 You can’t resolve a risk if you don’t know what it is. There are many ways to identify risk. As you do go
through this step, you’ll want to collect the data in a risk register.
 One way is brainstorming with your team, colleagues or stakeholders. Find the individuals with relevant
experience and set up interviews so you can gather the information you’ll need to both identify and
resolve the risks. Think of the many things that can go wrong. Note them. Do the same with historical
data on past projects. Now your list of potential risk has grown.
 Make sure the risks are rooted in the cause of a problem. Basically, drill down to the root cause to see if
the risk is one that will have the kind of impact on your project that needs identifying. When trying to
minimize risk, it’s good to trust your intuition. This can point you to unlikely scenarios that you just
assume couldn’t happen. Remember, don’t be overconfident. Use process to weed out risks from non-
risks.

Prepared and Presented by: Dr. Basavaraj Talikoti

 WHAT IS A RISK REGISTER?
 A project risk register is a
tool project managers use to
track and monitor any risks
that might impact their
projects. Risk management is
a vital component of project
management because it’s
how you proactively combat
potential problems or
setbacks.
 Using a project risk register,
also called a risk log, is an
essential part of this risk
management process.

Prepared and Presented by: Dr. Basavaraj Talikoti

 WHO CREATES A PROJECT RISK REGISTER?
 If you’re working on a very large, complex, or critical project, you may have a risk coordinator
or risk manager on your team. In this scenario, it would be their job to create and maintain the
risk register.
 However, for most projects, responsibility for creating the risk register falls on the project
manager.
 This doesn’t mean the risk manager or project manager is responsible for identifying or taking
action against all the risks. Everyone on the project team and potentially impacted by the
project’s success should help identify and assess risks.
 For instance, the client or sponsor may be aware of a potential problem that no one on the
project team knew about.

Prepared and Presented by: Dr. Basavaraj Talikoti

 WHAT IS INCLUDED IN A RISK REGISTER?
 A risk register is essentially a table of project risks that allows you to track each identified risk and any vital information about it.
 Standard columns included in a project risk register are:
 Identification number (to quickly refer to or identify each risk)
 Name or brief description of the risk
 Risk categories (whether it’s internal or external, material-related or labor-related, etc.)
 Probability (how likely is the risk to occur)
 Impact (if the risk takes place, how seriously will it impact your project)
 Rating (where does this risk fall on your priority list)
 Approach (will you monitor the risk, try to mitigate it, avoid it, etc.)
 Action (if you plan to mitigate or avoid the risk, what are the steps involved, and when will they occur)
 Person responsible for overseeing or mitigating the risk
 Comments

Prepared and Presented by: Dr. Basavaraj Talikoti

QUALITATIVE AND QUANTITATIVE
RISK ASSESSMENT

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

 QUALITATIVE RISK ANALYSIS VS QUANTITATIVE RISK ANALYSIS
 Perform qualitative and perform quantitative
risk analysis are two processes within the
project risk management knowledge area, in the
planning process group. Understanding the
difference between the two processes may be
tested on the PMP, CAPM, and the PMI-RMP
exams.
 While qualitative risk analysis should generally
be performed on all risks, for all projects,
quantitative risk analysis has a more limited use,
based on the type of project, the project risks,
and the availability of data to use to conduct the
quantitative analysis.

Prepared and Presented by: Dr. Basavaraj Talikoti

 QUALITATIVE RISK ANALYSIS
 A qualitative risk analysis prioritizes the
identified project risks using a pre-defined rating
scale. Risks will be scored based on their
probability or likelihood of occurring and the
impact on project objectives should they occur.
 Probability/likelihood is commonly ranked on a
zero to one scale (for example, .3 equating to a
30% probability of the risk event occurring).
 The impact scale is organizationally defined (for
example, a one to five scale, with five being the
A qualitative risk analysis will also include the appropriate
highest impact on project objectives - such as
budget, schedule, or quality).
categorization of the risks, either source-based or effect-based.

Prepared and Presented by: Dr. Basavaraj Talikoti

 QUANTITATIVE RISK ANALYSIS
 A quantitative risk analysis is a further analysis of the highest priority risks during a which a
numerical or quantitative rating is assigned in order to develop a probabilistic analysis of the
project.
 A quantitative analysis:
 Quantifies the possible outcomes for the project and assesses the probability of achieving specific project
objectives
 Provides a quantitative approach to making decisions when there is uncertainty
 Creates realistic and achievable cost, schedule or scope targets
 In order to conduct a quantitative risk analysis, you will need high-quality data, a well-developed project
model, and a prioritized lists of project risks (usually from performing a qualitative risk analysis)

Prepared and Presented by: Dr. Basavaraj Talikoti

QUALITATIVE V/S QUANTITATIVE

Qualitative Quantitative

risk-level project-level

subjective evaluation of probability and impact probabilistic estimates of time and cost

quick and easy to perform time consuming

no special software or tools required may require specialized tools

Prepared and Presented by: Dr. Basavaraj Talikoti

PROBABILITY AND IMPACT MATRIX

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

 IMPACT AND PROBABILITY IN RISK ASSESSMENT
 Impact and probability are the two main components of Risk analysis. Looking at impact versus probability is common in
order to categorize and prioritize risks as some risks may have a severe impact on projects objectives but only happen on
rare occasions, while other have a moderate impact but occur more frequently.
 All organizations activities involve risk. Risks are events caused by uncertainties, which can have a positive or negative effect
on the project objectives.
 All projects are unique and thus the associated risk varies between projects. Therefore, Risk Management is an important
part of any organization as proper management increases the likelihood for the success of a project.
 Risk management involves identifying possible risks and analyzing their potential in order to respond to and control the
projects most significant threats and opportunities. The risk analysis is a two-stage assessment process. Initially, qualitative
methods are used to examine, categorize and determine the main risk events identified, which are relevant for a more
detailed quantitative assessment. In risk analysis, risk is traditionally defined as a function of probability and impact.
 The Impact and Probability Matrix is a simple and easily understood method of prioritizing risks and allocating resources.
There are other, quantitative methods for analyzing risks, such as Sensitivity analysis, Expected Monetary Value analysis and
Monte Carlo Simulations.All these methods, though beneficial for management, have their limitations and drawbacks.

Prepared and Presented by: Dr. Basavaraj Talikoti

 Relative / Numerical Scale
Objective Very Low / Moderate / Very High
Low / 0.1 High / 0.4
0.05 0.2 /0.8
IMPACT Cost
Insignificant
change in
< 10% 10 - 20% 20 - 40% > 40%
increase increase increase increase
cost
 Impacts are often defined as the consequences, or
Insignificant
effects of a risk event on the project objectives. These < 5% 5 - 10% 10 - 20% > 20%
Time change in
impacts can be both beneficial or harmful to the schedule
increase increase increase increase
objectives.
Barely Project end
 The impact of risk events on different project objectives Scope
noticeable Minor areas Major areas Unacceptabl item
can be defined in both a qualitative and quantitative scope affected affected e reduction effectively
decrease useless
manner. These project objectives are cost, schedule,
quality, scope, health, safety, etc. Barely Only
Quality
Project end
reduction Unacceptabl
 The Impact scale can vary, but the most common scale noticeable demanding item
Quality requires e quality
quality applications effectively
is the five-point scale. Typically, the impacts are described degradation effected
sponsor reduction
useless
relatively; as very low, low, moderate, high and very high, approval
but often also defined using numerical scales.
Table 1: Impact Scale Example
 Dependent on the objective, the scales are given a Table 1 shows how the impact can be defined for various objectives. The
description of what the impact entails. One risk event possible impacts on each objective is described and given a ranking. The
can affect more than one objective, so the impact of all ranking in table 1 is both relative, from very low to very high, and numerical,
the possible objectives effected must be considered. giving numerical values based on the specific project.

Prepared and Presented by: Dr. Basavaraj Talikoti

 PROBABILITY
 Risk probability, or likelihood, is the possibility of a risk
Table 2: Probability Scale Example
event occurring. The likelihood can be expressed in both a
qualitative and quantitative manner. Likelihood
Description
 When discussing probability in a qualitative manner, terms Relative Numerical
such as frequent, possible, rare etc. are used. It is also
possible to describe the probability in a numerical manner. Very Low 0.1 Highly unlikely to occur.
 This can be done using scores, percentages and frequencies
defined by the organizations dependent on the relative
Low 0.3 Will most likely not occur
description.
 Table 2 show an example on how an organization can define
Moderate 0.5 Possible to occur
the ranking for the likelihood of risks. The table shows the
ranking in both a relative and numerical manner and a High 0.7 Likely to occur
description of the ranking is given.
Very High 0.9 Highly likely to occur

Prepared and Presented by: Dr. Basavaraj Talikoti

 Table 3: Impact vs Probability Matrix
Probability Threats
Very High /
PROBABILITY AND IMPACT MATRIX 0.9
0.05 0.09 0.18 0.36 0.72

High / 0.7 0.04 0.07 0.14 0.28 0.56

 The Probability and Impact Matrix is one the most commonly used Moderate /
qualitative assessment method. It is based on the two components of 0.03 0.05 0.10 0.20 0.40
0.5
risk, probability of occurrence and the impact on objective(s) if it
Low / 0.3 0.02 0.03 0.06 0.12 0.24
occurs. The matrix is a two-dimensional grid that maps the likelihood
of the risks occurrence and their effect on the project objectives. Very Low /
0.01 0.01 0.02 0.04 0.08
The risk score, often referred to as risk level or the degree of risk, is 0.1
calculated by multiplying the two axes of the matrix. Very Low / Moderate Very High
Impact Low / 0.1 High / 0.4
0.05 / 0.2 / 0.8
 Risk = Impact x Probability
 As the impact and probability can be described in both a relative and High risk | Score > 0.14 A organization defines its risk
numerical manner so can the risk score. The higher the combined Moderate thresholds, low, moderate and
ratings are, the higher the score and thus the risk level. These ratings 0.05 < Score < 0.14
risk high. These thresholds can differ
are generally defined from low to high or from very low to very high. between projects.
Low risk Score < 0.05
 The ratings for likelihood and impact are made using gathered Creating these definitions of impact and probability levels can help reducing
opinions from interviews. These ratings must be classified by each the influence of bias. The result from these risk matrices are used to
organization, specific for each activity. The organizations must define prioritize the risks, plan the risk response, identify risks for quantitative
their risk tolerance. assessment and guide resource allocations.
However, the objective effected by the risk must also be considered. E.g., a
risk events which has high safety or health risk would be prioritized over a
Prepared and Presented by: Dr. Basavaraj Talikoti risk event which would have very high financial risk.
 PROBABILITY AND IMPACT MATRIX
 Low impact – Low probability: The risks that are characterized as
low, or very low, risks have both a low impact and likelihood of
occurrence. For negative risks, threats, the response required is not
necessarily as proactive management action. However, they should be
included within the risk register for future monitoring. Positive risks,
opportunities, within the low-risk category should be monitored or just
simply accepted. Opportunity acceptance means taking advantage of the
opportunity if it arises, but not actively pursuing it.
 High impact – Low probability: Risks with high impact but low
likelihood of occurrence can be characterized from low to high risks but
most often within the moderate category. The characterization is
dependent on the organizations defined threshold. These events rarely
occur, defined as rare catastrophes. It is difficult to determine the
probability based on historical records due to lack of data. Therefore, the
probabilities must be estimated subjectively. The most commonly
responses are to insure or mitigate the problem.

Prepared and Presented by: Dr. Basavaraj Talikoti

 PROBABILITY AND IMPACT MATRIX
 Low impact – High probability: Risks with low impact but high
likelihood of occurrence can be characterized from low to high risks
but most often within the moderate category. The characterization is
dependent on the organizations defined threshold. These risks are
mostly due to uncertainties of numerous elements that individually,
are minor risks but combined, could amount to higher risks. These
are such uncertainties as actual cost and duration of different aspects
of a project, changes to activates or other similar uncertainties, that
alone, have little impact.
 High impact – High probability: The risks that are characterized
as high risks have both a high impact and likelihood of occurrence. A
risk which has a negative impact, is a threat to the objective, may
need priority actions and aggressive responses. These aggressive
responses could be mitigation of the risk or even terminating the
project if the risk is to great. A risk that has a positive impact, is an
opportunity, is most likely obtained easily, with the greatest benefits
and should thus be targeted first.

Prepared and Presented by: Dr. Basavaraj Talikoti

RISK RESPONSE STRATEGIES FOR POSITIVE AND
NEGATIVE RISKS
A RISK IS AN UNPLANNED EVENT THAT CAN AFFECT YOUR PROJECT’S OBJECTIVES IF IT OCCURS. THE
IMPACT CAN BE POSITIVE OR NEGATIVE.
IF THE RISK IS NEGATIVE, YOU WILL TRY TO AVOID OR MINIMIZE THE IMPACT. IF THE RISK IS POSITIVE, YOU
WILL TRY TO REALIZE ITS BENEFITS.
AS THESE TWO ARE DIFFERENT TYPES OF RISKS, THE STRATEGIES TO DEAL WITH THEM ARE ALSO
DIFFERENT.

PREPARED AND PRESENTED BY: DR. BASAVARAJ TALIKOTI

 RISK RESPONSE STRATEGIES FOR
POSITIVE RISKS OR OPPORTUNITIES
 This risk is also known as an opportunity. They have a positive impact on your project, so you
will always want them to happen. The most desired strategy for an opportunity is “exploit,”
which ensures that you realize the opportunity, although it is not possible to do all the time.
 Accept is the least desired strategy in which you take no action and hope the risk is realized on
its own.
 Escalate
 Enhance
 Exploit
 Accept
 Share

Prepared and Presented by: Dr. Basavaraj Talikoti

 RISK RESPONSE STRATEGIES FOR
NEGATIVE RISKS OR THREATS
 We have five strategies to manage negative risks:
 Escalate
 Mitigate
 Transfer
 Avoid
 Accept
 Ideally, you want to avoid risks, but it is not possible in most cases.
 Negative risks affect your project objective negatively and as a project manager, you will try to minimize
the impact. You have five strategies to manage negative risks. Every strategy has its own importance and
you will select the best strategy suitable for the situation and risk. Out of these five strategies, escalate is
the only strategy where you don’t have any responsibility since top management handles it.
Prepared and Presented by: Dr. Basavaraj Talikoti