BSBPMG517A MANAGE PROJECT RISK PRESENTATION 6

PRESENTATION OBJECTIVES

At the end of this presentation you will know about:

• Consideration and determination of risk-treatment options using

agreed consultative methods

RISK-TREATMENT

Risk-treatment options may include:

Accept risk

Mitigate risk

Transfer or share risk

Avoid risk

Treat the risks

Identify options

Select the best response

Develop risk treatment plan

Implement

RISK-TREATMENT

• Consider and determine risk-treatment options using

agreed consultative methods

• Your “agreed consultative” methods MAY depend on the

organisation’s policy and procedures in this regard.

• Does your organisation have a policy detailing the agreed

consultative method for risk treatment?

• Consultative methods:

• WHS consultation arrangements • Some legislation can differ in their

consultation requirements• WHS consultation committees

• Risk management representatives• Workplace Health and Safety Officer• Other agreed arrangements

HIERARCHY OF CONTROLS

• An important aspect to consider when deciding on your

appropriate risk treatment options is that some risk control

measures are more effective than others

• A commonly accepted measurement of risk control is hierarchy of

controls. This is used extensively with Health and Safety risk

management

HIERARCHY OF CONTROLS

HIERARCHY OF CONTROLS

• Where a decision has been made to implement a control measure,

someone has to be responsible for this and for reviewing its

effectiveness

• Ensure the level of responsibility and authority allocated to

managers and supervisors represents the control aspect for which

they are responsible

• Both the selected control measure and the person responsible

should be documented accordingly

HIERARCHY OF CONTROLS

Prior reference to risk treatment

• Risk-treatment options have been extensively detailed in earlier

parts of this session, so reference to those will help reinforce the

typical methods used for risk treatment in most project

circumstances

• Industry types vary options considerably as to focus, priority and

order but generally there are acceptable actions to adopt across a

wide variety of industries

ACCEPT THE RISK

• Certain risks are unavoidable

• Best used when the risk is low

• Still requires planning for such things as “determining when the

project will be exposed to the risk”

• You can still make small adjustments

• Treatment of acceptance is regarded as a “passive risk” since no

action is taken

MITIGATE THE RISK

• Risk mitigation is a control process that essentially stops a risk

before it starts making an impact and bringing it to an acceptable

level

• Mitigation, as referred to in other areas of this session, is usually

part of a contingency plan and used to prevent the risk

AVOID THE RISK

• Avoidance requires identification of the risks in the first instance

• As also mentioned previously, this can be achieved through

reference to other project experiences and data

• Further analysis is needed to identify those risks that would likely

occur upfront at the project initiation so you can avoid them at the

outset

• A final decision can be made after assessing the relative impact of

those risks

TRANSFER THE RISK

• Risk transfer is a common method in treating risk as it can be

used to dilute the impact of the risk if not totally remove it

• In project management, risk transfer is often made to a third party

or sharing risk with others through contracts, insurance,

outsourcing or leasing

• Reducing risk by transfer means the project will not bear the total

impact of the risk

PRESENTATION SUMMARY

Now that you have completed this presentation you know about:

• Consideration and determination of risk-treatment options using

agreed consultative methods