risk management in service planning and project

7/30/2019 Risk Management in Service Planning and Project

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Risk Management inervice planning and projects


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RISK MANAGEMENT

Every DECISION WE MAKE INVOLVES

RISK

Even doing nothing may involve risk

Aim: To manage not remove risk

To take managed risks

To encourage innovation and managedrisk taking

To achieve desired outcomes


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All organisations exist

to achieve theirobjectives.

The purpose of risk

management is to manage thebarriersto achieving these

objectives.

objectivestoday


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Why Risk Management?

Corporate Governance

Statutory requirements- eg: health/safety

Ensure best use of public resource

To prevent/minimise the unexpected

To ensure delivery of service

To realise and maximise opportunities


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Response to Risk

Transfer Conventional insurance, paying a third party to take the risk in

another way. (Max 20% risk insurarable)

Tolerate

Ability to do anything about some risks may be limited, or the cost oftaking any action may be disproportionate to the potential benefitgained

Treat Actions instigated from within the organisation (although their effects

may be felt outside of the organisation) which are designed to containrisk to acceptable levels.

Terminate Some risks will only be treatable, or containable to acceptable levels,

by terminating the activity


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RISK: I.T. Migration Project Physical Security

Risk Owner: David Dickinson

ARisk

NumberCurrent Risk

ScoreTarget Risk

ScoreRisk Description

B C2 D3Increased potential for theft Both internal and external- increasedattractiveness of IS items.

C +

C2 D3

Interim storage arrangements for new and old hardware

D

E

C2 E3Inadequate insurance cover to protect both new and oldequipment during transitional period and increase ofequipment.

F

IV III II I

cLikelihood

Impact

C= significant 3= Critical. Consequences: Potentially severe disruption of service. Loss of finance. Reputation.

Action/controls already inplace/agreed to provide Adequacy of action/control to address risk Required managementaction/control Responsibility foraction Critical successfactors & KPIs Reviewfrequency Key dates

All new equipment to bemarked with Smartwater

Location of storagecontainer to be pre agreed

to ensure most securelocation

Hiring of secure containerunit

CCTV located within area ofstorage containers

Limited May act asdeterrent.

Effective

Effective

Limited cover but canbe effective as bothdeterrent and to identify

prevent attempted theft

IS Management to ensure thatenough solution and stickersare ordered priortocommencement of the rollout.

Also ensure all equipment iscorrectly marked.

I.S. to ensure that RiskServices are consulted prior to

delivery of the storage units.

I.S. to ensure container issuitable and secure. IS needto check specification withInsurers

Relocation/ realignment ofexisting CCTV provision maybe necessary for storage

period.

Sharon Parkinsonand David Dickinson




All hardwareadequatelymarked

Secure location

Secure storage

Secure storage

-

-

-

Weekly

Continuous


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Action/controls already inplace

Adequacy of action/control to address risk

Required managementaction/control

Responsibility foraction

Critical successfactors & KPIs

Reviewfrequency

Key dates

Internal security staff to bebriefed and to provide

increased monitoring of area

Use of old equipmentinventory. New Equipmentinventory to be produced.

Appropriate insurance coverto offset any potential lossvia theft

Door entry systems to

prevent unauthorised access

All staff to be reminded ofbasic security measures

Effective

Effective

Effective Althoughtotal loss not fullyprotected

Limited Staff may be

shadowed. Not allbuildings have accesscontrol

Limited if requiredactions not enforced i.e.closing of blinds, etc

Provision of extra security maybe necessary at times of

increased risk.

Extension of building securityalarm to storage holds

IS to ensure that the insurancepolicy covers the extra unitsbeing held during thetransitional period

Additional security may be

required during installation atbuildings without secureaccess control. IS todetermine where units are tobe stored on these sites priorto commencement of rollout

IS to liaise with Risk Servicesto produce agreed instructions




Sharon Parkinson

and David Dickinson


Awareness andincreased

securitymonitoring

Alarmed facility

Adequateinsurance value

Secure access

Increasedawareness


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THE RISK MANAGEMENT CYCLE

RISK IDENTIFICATION

RISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING

Inspections, interviews,

workshops, analysis of data

Contingency planning,

Decisions

controls, training,

procedures, inspection

Agreement

How likely, how bad?

Understanding,

quantification

Testing,

reviewing actions,

planning, reporting


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The Risk Management Cycle

Identify

Control

Monitor

Review


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PROBABILITYO

RLIKELIHOOD

SEVERITY OR IMPACT

A

B

C

D

E

F

IV III II I

1

2 3

5

6

RISK PROFILINGRISK IDENTIFICATION

RISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING


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RISK MANAGEMENT:

OUR KEY PLAYERS

Member Portfolio and ChampionTony Roberts

CMT ChampionKeith Stedman Officer Champion and corporate facilitator- Ian Harrison

Managers- Service planning and delivery

All employees

Corporate Audit Section- Risk based Audit programme


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OpportunitiesRisk management also adds value:

It enables us to maximise opportunities, to take

managed risks

To innovate, pathfind, explore new ways ofservice delivery.

To manage risks we may have to take morerisks, we may have to innovate.


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WHAT ABOUT

INSURANCE?Risk Management is not just about insurance

80%

of risks faced by

organisations are

not insurable!

Chance or choice - SOLACE/ZMMS


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S 4 E l f M


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Step 4: Example of a Management

Action Plan (MAP)

RiskNumber

CurrentRisk Score

Target RiskScore

Description

Owned by: Date:

Action/controlsalready in place

Adequacy ofaction/control toaddress risk


Responsibilityfor action

Criticalsuccess factors& KPIs

Reviewfrequency

Keydates

A

B

C

D

E

F

IV III II I

Likelihood

Impact


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What is Risk Management?

What can

go wrong

How good

or bad

can it get

What can

we do

about it

Identify

Respond

Assess and

measure


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Service planning RM

Identify, where relevant, how your

service area can and will mitigate the

Councils Strategic Risks

Identify, quantify and prioritise those

risks to your service planning.


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2. Types of risk and riskidentification


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Political

Economic Social

Legislative/

RegulatoryEnviron-

mentalCompetitive Customer/

Citizen

Managerial/

Professional

Financial LegalPartnership/

ContractualPhysical

Techno-

logical

SCOPE OF RISKRISK IDENTIFICATION

RISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING


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Political

Arising from the political situation Political make-up (majority party, hung council, key

opposition parties)

Stability of political situation

Election cycles (power shifts, undue influence onelectioneering)

Recent or proposed changes to political structure

Political personalities

Leadership issues (lack of strong leadership,concentration of power into the hands of a few,

imbalance of power)


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Social

Arising from the national andlocal demographics/ social trends

Demographic profile (age, race, etc)

Residential patterns and profile (e.g. temporal,commuter belt, state of housing stock,

public/private mix)

Health statistics/trends

Leisure and cultural provision

Crime statistics/trends

Children at risk


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Technological

Arising from technologicalchange /organisationaltechnological situation

Capacity to deal with technological changes/e-government targets

Current use of/reliance on technology

Current or proposed technology partners

State of architecture

Current performance and reliability

Security and standards, e.g. on back-up and

recovery


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Environmental

Arising from inherent issues concerned with thephysical environment

Nature of environment (urban, rural, mixed)

Land usegreen belt, brown field sites

Waste disposal and recycling issues

Pollution issues, e.g. contaminated land

Exposure to drainageproblems/flooding/erosion/subsidence/

landslip

Traffic problems/congestion


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Competitive

Arising from the organisations competitiveSpirit and the competitiveness of services, etc

Position in league tables

Relationships with neighbours and partners, e.g.competitive or collaborative

Plaudits held/sought, e.g. Beacon Council status

Success in securing fundingNature of service provision

Competition for service users, e.g. leisure, carparks


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Customer/Citizen

Arising from the need to meet current and

changing needs and expectations of customersand citizens

Extent and nature of consultationwith/involvement of community, e.g. community

groups, local businesses, focus groups, citizenspanels, consultation on new democraticstructures, Council Tax levels, etc

Relationship with community leaders, tenantgroups and opposition groups

Community needs v Organisational objectives

Visibility of services e.g. environmental, refuse

collection, Service delivery feedback / complaints


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Professional/Managerial

Arising from the need to be managerially and

professionally competent

Views arising from peer reviewse.g. fromconsultancy reviews and internal audit

Professional/managerial standing of key officersStability of officer structure/management teams

Organisational competency and capacity

Individual competency and capacity

Performance management structure

Key staff changes and personalities

Staff recruitment and retention

Turnover, absence, stress levels


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Financial

Arising from the financial planning andControl framework

Financial situation of authority

Level of reserves

Adequacy of grant settlements

Budgetary policy and control

Delegation of budget and financial disciplinesMonitoring and reporting systems

Use and sustainability of other sources ofincome , e.g. revenue from fines


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Legal

Arising from possible breachesof legislation

Legal challenges and claimsAdequacy of legal support

Boundaries of corporate & personal

liabilitiesSufficient reserves to defend legal challenge

Damage to reputation arising from

legislation breach


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Physical

Arising from physical hazards associated withpeople, buildings, vehicles, plant and equipment

Nature and state of asset base including

record keeping

Commitment to health, safety and well-being ofstaff, partners and the community

Accident record keepingMaintenance practices

Responsibility as managers


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Partnership/Contractual

Arising from partnerships and contracts

Key strategic partnersfrom public, private andvoluntary sectors

Accountability frameworks and partnershipboundaries

Any PFI schemes or other large scale projectsinvolving joint ventures

Outsourced services

Relationships with contractors

Procurement arrangements / contract renewal

policy


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3. Profiling and Prioritisation

To profile and prioritise risks according

to likelyhood and impact

To concentrate on key risks and target

controlling resources


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Identifying risk

Looking ahead!


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Techniques for identifying

risk

workshops

brainstorming

self assessment

checklists

organisation charts

process flow charts

Prompt lists


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What risks and were they

managed?Mil lennium Dome

I raq involvement

Rail pr ivatisation ?

New Council depot ?

Millennium Bridge- Newark?

Job evaluation ?


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DOME

Partnership/Contractural

Reputation

Political

Competitive

Financial/ Economic


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Show StrategicRisk Register


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HORIZON SCANNING

Pandemic Flu

Re-organisation

New leisure and Museum centres

Oil Dependency- Fuel prices

Security of Kelham Hall

Global warming

Ageing population


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S 2 A l iRISK IDENTIFICATION


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Step 2: Analysis

a strategic risk scenarioRISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING

Vulnerability Trigger Consequence

The Council has wastemanagementresponsibilities and is

required to meetchallenginggovernment recyclingtargets.

Targets not met withinthe prescribed time limit.

Financial penalties throughtaxation

Budgets vired from other

services Other services have to be

reduced or council tax has tobe increased

Inspection / audit criticism

Adverse media reporting

Council seen as failing Reputation of the Council on

environmental issues suffers

Friction between membersand officers

Officer resources diverted intofire fighting

Step 2: Anal sisRISK IDENTIFICATION


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Step 2: Analysis

Sample operational risk scenarioRISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING

Vulnerability Trigger Consequence

The Council has no formal

policy regarding themanagement of asbestosmaterial. The council hasnumerous propertiesincluding council houses,leisure centres and offices.

Asbestos is present

in council propertiesand harms somebody

Staff / workers harmed Public liability claims Resources diverted from services

to considering claims Reputation of council damagedOR

Tenants seriously harmed

Claims etc


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RiskAssessmentA 6 point map of the process:

1. What do you want to achieve? - Objective.

Eg: Ensure understanding and embedding of risk management

2. What can stop you achieving it? - Hazard.

Perceived lack of importance

Time constraints

Inadequate Resources

3. How likely is it to happen? - Probability.

4. How big will it be? - Impact.

5. What can be done to eliminate the threat? - Control.6. What do you do about it?Action/Improvement/I ntervention

RISK IDENTIFICATION


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Step 3: PrioritiseAccurately assessing therelative significance of risks

Likelihood / Probability

X

Impact / Severity

RISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING

3 RISK RISK IDENTIFICATION


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PROBABILITYO

RLIKELIHOOD

SEVERITY OR IMPACT

A

B

C

D

E

F

IV III II I

1

2 3

5

6

3.RISKPROFILING/prioritisation RISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING

RISK IDENTIFICATIONRisk Profile:Newark and Sherwood DC


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L

i

k

e

l

i

ho

o

d

Impact

A

B

C

D

E

F

IV III II I

RISK ANALYSIS

PRIORITISATION

RISK MANAGEMENT

MONITORING

Likelihood:A: Very High

B: High

C: Significant

D: Low

E: Very LowF: Almost Impossible

Impact:I: Catastrophic

II: Critical

III: Marginal

IV: Negligible

New Leisure Centre project

1

2

36

4 57 8

The teams risks have been mapped against the teams appetite


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4. Management Action

Planning


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how to

prevent

losses

appoint

champio

n

how to limit

if goes

wrong

prepare

action

plans

what can

we do

about it?

Treating / Responding to Risk



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Action Plan (MAP)

RiskNumber

CurrentRisk Score

Target RiskScore

Description

Owned by: Date:






Reviewfrequency

Keydates

A

B

C

D

E

F

IV III II I

Likelihood

Impact


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5.Monitor and Review

At intervals agreed within your

management plan

When there is change

If the controls are not working


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Service planning RM

Identify, where relevant, how your

service area can and will mitigate the

Councils Strategic Risks

Identify, quantify and prioritise those

risks to your service planning.



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Action Plan (MAP)

RiskNumber

CurrentRisk Score

Target RiskScore

Description

Owned by: Date:






Reviewfrequency

Keydates

A

B

C

D

E

F

IV III II I

Likelihood

Impact

TO BE INCLUDED IN SERVICE PLAN TEMPLATE


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Service Planning- within

templateIdentify, where relevant, how your

service and service plans can and will

mitigate strategic risksIdentify and quantify risk

Profile and Prioritisation

Management action PlansMonitor and review

Full ppt on Risk Man site on intranet


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Projects: Points to Remember

The Risk Management Process enables:

Ability to make betterinformed decisions

on project adoption or avoidance orexpending resource.

Better information and confidence.

Best chance of minimising project and

enterprise failure.


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Some apparent problems

Without historical data, how can you measure

risk?

There are so many risks, how is it possible to

establish the impact on a project?

Information overload- how is it possible to

know which are the important risks?


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Risky Projects


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Principles of ProjectManagement

What is a project?

An activity with a starting point, clearobjectives and an end point

Every project has a desired tangibleoutcome and a clear timeframe within whichthe objectives must be achieved

Whose Responsibil i ty?

Project(s) are the responsibility of a singleperson or body

Whose Ownership?

Clear defined ownership and managementallocation


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Recent Project

Calamities

Portcullis House,

Westminster:

85m to 275m

The Scottish

Parliament:

40m to 400m

Some Construction Project Risk


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Some Construction Project Risk

reasons

no two projects arethe same

no two sites aresimilar

there is never anopportunity toperfect the processor practice

human element

with skilled &manual labour

many differingfirms

over a long period

many locations for

assemblymany differing

skills

uncertainty of

market not like a car

assembly

teams often havenot worked together


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Project risk exposure

0

Cost impact ofrisk

Level of uncertainty

%

Inception Feasibility Design Construct


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Risk Identification

Determining which risks are likely to

affect the project and documenting the

characteristics of each


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A Risk to what?

To your team or project fromoutside

From your team or project to theowner / client

To the stakeholders from theproject


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Response Options

Retain

Reduce

Share

Avoid

Transfe

r

Are carried out by risk championsand will include these responses:


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The 6 Steps for an ActionPlan

Set specific goalsDefine activities, resources needed

Set a timetable

Forecast outcomes, contingency

plans

Formulate a detailed plan of action

Implement and supervise, evaluate


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Lets Summarise Project Risk Management


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Summarising Risk Management

Create a risk aware environment,Identify & measure, hold regular

reviews,

Prepare action plans, identify

champions,Maintain a risk register, keep an audit

trail,

Focus on key risk items & prioritise,

A continuous process, meet regularly tomonitor progress


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Success or Failure


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Senior Management to have real-timeinformation on project status (risks &opportunities).

Early identification leads to project success;ignorance is not bliss!

Identify major project risks before projectapproval and resource commitment.

Project Management is both an art and ascience!


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risk management in service planning and project

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