FACULTY OF BUSINESS MANAGEMENT

Transcription

1 THE OPEN UNIVERSITY OF TANZANIA FACULTY OF BUSINESS MANAGEMENT OAF 626: PROJECT PORTFOLIO AND RISK MANAGEMENT COURSE OUTLINE Introduction Project portfolio and risk management is a level VI course which is aimed at enabling students to successfully manage their projects. It is designed to introduce and discuss various project portfolio and risk management concepts, tools, and techniques in global context. Using integrated approaches, the course emphasizes discussion on the design and implementation of risk management practices. Basically, it purports to help students realize, understand, and master various state-of-the-art project portfolio and risk management theories and practices as well as their advancement in the future. Objectives of the Course The main objective of this course is to provide students with a comprehensive perspective on risk management, concepts, tools, and techniques. It intends to help students realize, understand, and master various state-of-the-art risk management theories and practices as well as their advancement in the future. Specific Objectives Upon completion of this course learners should be able to: Show understanding of the principles and theories of project risk management and project life cycle 1

2 Show understanding of different tools and techniques that are used to plan for risk management Demonstrate understanding of the sources of project risks Demonstrate understanding of models for efficient Project Portfolio Management Demonstrate understanding of both qualitative and quantitative techniques for project risk analysis Demonstrate understanding of various tools for monitoring and controlling of project portfolio risks Apply project-based solutions that are derived from project management theories and practices. To use the appropriate tools and techniques in planning for portfolio and project risk management Identify the importance of project risk management in the broader context of portfolio risk management reflecting on the types and sources of project risk. Apply different models for efficient project management Apply both qualitative and quantitative techniques for project risk analysis and use the most appropriate technique under varying situations Apply appropriate tools for monitoring and controlling of portfolio and individual project risks Lead project teams in investigating project risks and recommend projectbased solutions that are derived from project management theories and practice. 2

3 To recommend the most appropriate tools and techniques that is used to plan for project risk management. Organize portfolio and project risk evaluation teams Assess and communicate different models for efficient project management Communicate the most appropriate techniques for project risk analysis under varying situations Recommend on the best tools for monitoring and controlling of portfolio and individual project risks Propose project-based solutions that are derived from project management theories and practices. Evaluate the various tools and techniques that are used to plan for project risk management. Assess the value of project risk management in the broader context of portfolio risk management reflecting on the types and sources of project risk. Critically evaluate different models for efficient project management Analyze both qualitative and quantitative techniques for project risk analysis and recommend the most appropriate technique. Recommend on the best tools for monitoring and controlling of portfolio and individual project risks Course Content The course consists of eight lectures, covering the major issues in Project risk management. These are described below: 3

4 1.0 LECTURE ONE: INTRODUCTION TO PROJECT PORTFOLIO AND RISK MANAGEMENT 1.1 Overview This lecture is intended to enable students understand the meaning of project portfolio and risk management and the underlying principles. Today lots of organizations are carrying out large amounts of projects at the same time. To carry out the right projects at the right time and within the appropriate environment requires better project portfolio management and analysis of the underlying risks. 1.2 Learning objectives At the end of this lecture you should be able to: Demonstrate an understanding of the concept of project portfolio Explain the meaning of risk and risk management Describe the scope of project risk management Demonstrate an understanding of the concept of project life cycle Explain the Principles of Project Risk Management 1.3 Sub topics Overview of Project Risk Management The meaning of Project Risk Management Risk Management in the Context of Project Management Project Risk Management in a Project Life Cycle Fundamental Principles of Project Risk Management 4

5 2.0 LECTURE TWO: UNCERTAINTY IN PROJECT PORTFOLIO AND THEIR MANAGEMENT 2.1 Overview Decision making falls into three scenario: certainty, risk and uncertainty. This lecture introduces to you decision making techniques under each of the three scenario. 2.2 Learning objectives At the end of this lecture you should be able to: Demonstrate knowledge of various scenario under which uncertainties fall Demonstrate practical knowledge on decision making under certainty and uncertainty environments. 2.3 Sub topics variability associated with estimates; uncertainty about the basis of estimates; uncertainty about design and logistics; uncertainty about objectives and priorities; Uncertainty about fundamental relationships between project parties. The scope of project risk management 3.0 LECTURE THREE: PROJECT RISK MANAGEMENT PLANNING 3.1 Overview Risk management planning is iterative and includes the entire risk management process with activities to identify, analyze, respond to, and monitor and control 5

6 risks. Risk planning develops a risk management strategy which includes both the process and implementation approach for the projects. 3.2 Learning Objectives At the end of this lecture you should be able to; Explain the concept of risk management planning Identify the inputs to risk management planning Apply different tools and techniques to plan for risk management Identify the outputs that are expected from risk management planning 3.3 Sub topics. Overview of Risk Management Planning Process Inputs to the project Risk Management planning Process Tools and Techniques for the Risk Management Planning Process Outputs from the Risk Management Planning Process Risk Management Process for Project Portfolio 4.0 LECTURE FOUR: PROJECT RISK IDENTIFICATION 4.1 Overview Before you can manage something you must first know about it. Thus risk management begins with identifying the risks and predicting their consequences. 4.2 Learning Objectives At the end of this lecture you should be able to; Identify different sources of project risk Classify project risks Apply different tools and techniques to identify project risks 6

7 4.3 Sub topics. Overview of Risk identification Internal Vs external sources of risk Insurable Vs Business risks Tools and Techniques for the Identification of project risk 5.0 LECTURE FIVE: QUALITATIVE RISK ANALYSIS 5.1 Overview Risk analysis involves estimating the probability of occurrence and consequence of occurrence and converting the results to a corresponding risk level. The approach used depends upon the data available and requirements levied on the project. The most common form of qualitative approach is the use of probability of occurrence and consequence of occurrence together with a risk mapping matrix to convert the values to risk levels. 5.2 Learning Objectives. At the end of this lecture you should be able to; Explain the qualitative risk analysis process Identify the scales used in qualitative risk management process Apply different tools and techniques used in qualitative risk analysis. Identify the expected outputs from qualitative risk analysis 5.3 Sub topics. Overview of the Qualitative Risk Analysis Process Scales used in the Qualitative Risk Analysis Process Inputs to the Quantitative Risk Analysis Process Tools and Techniques for Qualitative Risk Analysis Process 7

8 Outputs from the Qualitative Risk Analysis Process 6.0 LECTURE SIX: QUANTITATIVE RISK ANALYSIS 6.1 Overview Several methodologies are commonly used in quantitative risk analyses. These include but are not limited to, payoff matrices, decision analysis, expected value, and a Monte Carlo process. This lecture discusses in details each of these methods. 6.2 Learning Objectives At the end of this lecture you should be able to: Explain the quantitative risk analysis process Identify the techniques used in quantitative risk management process Apply different tools and techniques used in quantitative risk analysis. Identify the expected outputs from quantitative risk analysis 6.3 Sub topics. Overview of the Quantitative Risk Analysis Process Inputs to the Quantitative Risk Analysis Process Tools and Techniques for the Quantitative Risk Analysis Process Outputs from the Quantitative Risk Analysis Process 8

9 7.0 LECTURE SEVEN: PLANNING FOR RISK RESPONSES 7.1 Overview Risk response planning addresses the matter of how to deal with risk. Generally, the ways of dealing with an identified risk include transferring the risk, altering plans or procedures to avoid or reduce the risk, preparing contingency plans, or accepting the risk. 7.2 Learning Objectives At the end of this lecture you should be able to: Explain the risk response planning process Identify the inputs to risk response planning process Apply different tools and techniques used in risk response planning. Identify the expected outputs from risk response planning 7.3 Sub topics Overview of the process of Risk Responses planning Inputs to the Planning of Risk Responses process Tools and Techniques for the Planning of Risk Responses Outputs from the Planning of Risk Responses 8.0 LECTURE EIGHT: PROJECT RISK MONITORING AND CONTROL 8.1 Overview The entire process of identifying project risks and establishing a method of dealing with them can be referred to as risk monitoring and control. This process refers to the process of detailing and tracking identified risks as well as monitoring residual risks, also the identification of any new risks that may arise. 9

10 This also includes the execution of business response plans, as well as making a thorough evaluation of their effectiveness. 8.2 Learning Objectives At the end of this lecture you should be able to: Demonstrate an understanding of risk monitoring and controlling process Identify various inputs to the monitoring and controlling of project risk management Apply various tools and techniques that are used in project risk monitoring and control 8.3 Sub topics. Overview of the Monitor and Control Risks Process Inputs to the Monitor and Control Risks Process Tools and Techniques for the Monitor and Control Risks Process Outputs from the Monitor and Control Risks Process Course Evaluation: Timed Test 30% Final Examination 70% Total 100.0% Recommended Readings: 1. Chapman, C,. & Ward, S. (2003). Project risk management: Processes, Techniques and insights. 2 nd edition, West Sussex, John Wiley & Sons Ltd 10

11 2. Hagin, R.L. (2004). Investment Management Portfolio Diversification, Risk, and Timing Fact and Fiction. New Jersey, John Wiley & Sons, Inc. 3. Kerzner, H. (2004). Project management: A Systems approach to planning, scheduling, and controlling. 10th edition: New Jersey, John Willey & Sons, Inc. 4. Khatua, S. (2011). Project management and appraisal. New Delhi, Oxford University press. 5. Koster, K. (2009). International project management. Great Britain, TJ International Ltd. Padstow, Cornwall. 6. Nicholas, J.M. (2004). Project management for business and engineering: Principles and practice. 2nd edition: Oxford, Butterworth-Heinemann. 11