Savitribai Phule Pune University

Third Year of E&TC Engineering

(2019 Course)
304193:Project Management

Under the Aegis of BOS

Electronics &
Telecommunication , SPPU
 CONTENTS

1-Project Risk Management: 2-Introduction to Project

Introduction, Risk, Risk Management, Management Tools such as:
Role of Risk Management in Overall ▰ Trello
Project Management, Steps in Risk
Management, Risk Identification, Risk ▰ JIRA
Analysis, Reducing Risks
▰ Asana.
3- Financial Management in Projects:
Project Finance structure, Process of Project Financial
Management: Conducting Feasibility Studies, Planning the
Project Finance, Arranging the Financial Package, Controlling
the Financial Package, Controlling Financial Risk, Options
Models
CO5: Identify and assess the project risks and manage finances in line 2
with Project Financial Management Process.
 HELLO!
I am Ulhas Patil
I am here because I am resource person for Faculty Orientation
Workshop on TE (E&TC) Revised Syllabus 2019
Course to give presentations.
You can find me at patil.ulhas@kbtcoe.org 3
A
Project Risk
Management:
4
 Introduction Environment
Reputation
& Physical

When developing a competitive product or

system, risks can arise from the inability to Govt. Technology
meet functional requirements and business Regulatory
& Legal
Operational

expectations throughout the life cycle,

from first inception to final disposal. The
People
risks can be broadly grouped into four (HR)
Financial

primary categories i.e.

• Operational,
Socio
• Financial, Crime Strategic Economic

• People (HR),
• Strategic
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“

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 Risk?

▰ Risk –It is a potential problem, it might happen and it might not

or measure of the probability and consequence of not achieving a
defined project goal.

▰ Conceptual definition of Risk

 Risk concerns future happenings
 Risk involves change in mind, opinions, action, places etc.
 Risk involves choice and uncertainty that choice involves
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 Risk?

▰ Uncertainty –The risk may or may not happen, that is , there are no 100% risk (those,
instead, are called constraints) most people agree that risk involves the notion of
uncertainty

 Can the specified aircraft range be achieved?

 Can the computer be produced within budgeted cost?

 Can the new product launch date be met?

▰ Loss –the risk becomes a reality and unwanted consequences or losses occur
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 Risk Categorization

The risks can be broadly grouped into four categories

Technological risks Business risks Societal risks National risks
Design Risk Market Risk Environmental  national economic
Manufacturing Risk Strategic Risk hazards
Quality Risk Sales Risk Economic  military well-being.
Reliability Risk Management Risk
Safety Risk Budget Risk

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 Risk also categorise into

Known Risk Predictable Risk Unpredictable Risk

Those risk that can be Those risks that are
Those risk that can and do
uncovered after careful Extrapolated from the occur, but are extremely
evaluation of the project plan, past project experiances
difficult to identify in
the business and technical in (e.g. past turnover) advance
which the project is being
developed, and other reliable
information sources
(e.g.Unrealistic delivery date ) 10
 Risk?

▰ Risk has two primary components for a given event:

 A probability (likelihood) of occurrence of that event 𝑹𝒊𝒔𝒌 = 𝒇(likelihood, impact)

 Impact of the event occurring (amount at stake)

 Lack of knowledge of future events-favourable are called opportunities

and unfavourable events are called risks
 Its cause- hazards (to overcome by knowing them and taking the action)
𝑹𝒊𝒔𝒌 = 𝒇(Hazards, Safeguard)
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 Risk Untility Function & Preference

Tolerance for risk

Figure-Risk preference and the utility function

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 Risk Management
Definition of Risk Management :
▰ Risks management is an integrated process of defining specific areas of
risk, developing a comprehensive plan, integrating the plan, and
conducting the ongoing evaluation’ –
.
▰ Risk Management is the process of measuring, or assessing risk and then
developing strategies to manage the risk’ –
▰ Managing the risk can involve taking out insurance against a loss,
hedging a loan against interest rate rises, and protecting an investment
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against a fall in interest rates’ –
 Risk Management

Risk management is the act or practice of dealing with risk. It

includes planning for risk, assessing (identifying and
analyzing) risk issues, developing risk handling strategies,
and monitoring risks to determine how they have changed.

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 Risk Management

Risk Identification
What might go wrong?
Identify

Assessment and Analysis

Assessment of probability and impact ?
Assess

Mitigation/ fall back planning Plan On-Going Risk Management

What can we do about it ?
What might we have to do it? How do we stay on
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top of it ?
 Why Is Risk Management Important In
Project Management?

•Risk management contributes to the success of projects by determining the external

and internal risks
•In order to ensure the project run smoothly, the project manager can communicate
their plans with stakeholders
•This helps project managers to maximize the outcomes and reducing the chances of
falling of projects.
•A risk management plan helps you to become proactive and developing actions to
reduces the likelihoods 16
 What is the Risk Management Process?

To identify, prioritize, and evaluate business risks. When a manager designs a project,

it is called risk management. Risk management manages through a process. This

process name is the process of risk management.

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Steps of Risk Management Process

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 RISK ASSESSMENT

▰ It is the problem definition stage of risk management, the stage

that identifies and analyzes program issues in terms of probability
and consequences, and possibly other considerations (e.g., the
time to impact).
▰ It is often a difficult and time-consuming part of the risk
management process.
▰ The components of assessment—identification and analysis—are
performed sequentially.

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 Risk Identification
Risk identification is the process of examining the program areas and
each critical technical process to identify and document the associated
risk. Risk analysis is the process of examining each identified risk issue
to estimate the likelihood and predict the impact on the project.
This may include
 a survey of the program,
 customer,
 users for concerns and problems. 20
 Risk Identification

 Project-
 Technical-
 Test-
 Logistics-
 Production-
 Engineering areas-

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 RISK PLANNING

Risk planning is the detailed formulation of a program of action for the management of
risk.
It is the process to:
● Develop and document an organized, comprehensive, and interactive risk
management strategy.
● Determine the methods to be used to execute a program’s risk management strategy.
● Plan for adequate resources.
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RISK PLANNING

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 RISK ANALYSIS

 Risk analysis is a systematic process to

estimate the level of risk for identified
and approved risks. This involves
estimating the probability of occurrence
and consequence of occurrence and
converting the results to a corresponding
risk.
 The approach used depends upon the
data available and requirements 24
imposed on the project level.
 B
Introduction to Project
Management Tools:
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 What makes a good Project Management
Software?
Top key functionality aspects of project management
software
 Task lists
 Schedules
 Reporting
 File sharing
 Communication
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 Reporting
 Best project management software

..

 Meister Task,  Proof Hub  Monday.com  Team Gantt

 Basecamp,  Zoho Projects  Wrike  Backlog
 Nifty,  Trello  Adobe Workfront  Celoxis
 Teamwork  JIRA  Hubstaff  Plutio
Projects  Asana  LiquidPlanner  Project
 Clickup Manager.com

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 Trello

▰ Trello is a Kanban-based (means that it visualises an entire

project in just one single view.) collaboration and task
management tool that is perfect for all kinds of projects or
teams. This includes content teams, marketing projects,
customer support tracking, sales pipelines, HR tracking, and even
Agile project management.
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 Step-by-step guide on using Trello for
project management.

Step 1: Setup your Trello project board and create task cards ..\Pictures\step-I.png

Step 2: Create task cards and assign them to relevant team members..\Pictures\step-2.png
..\Pictures\step-2.1.png
..\Pictures\step-2.2.png

Step 3: Move the Trello cards along the board as steps are completed..\Pictures\step 3.png

Step 4: Close out the project upon completion..\Pictures\step 4.png

Step 5: Use your Trello board template for future projects..\Pictures\step 5.png

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JIRA

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Asana

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 C
Financial Management in
Projects::
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 Project Finance structure

▰ Project finance is a long-term financing of any business

venture including infrastructure and industrial projects based
upon the projected cash flows of the project rather than
appraising the financial statements of its stake holders/
sponsors.
▰ Project Finance is a process of evaluating and selecting long
term investments that are consistent with the goal of
shareholders (owners) wealth maximization.
▰ Project means any commercial or business venture. 33
 Project Finance

Identification
of project to Identification &
reach out to Monitoring
undertake to projects cycle &
Pre- depend upon possible Post
Finance stakeholder to milestones
Finance business
meet financial Finance associated with
requirements execution
and industry needs
trends

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 Key Features of Project Financing

 Capital Intensive Financing Scheme

 Risk Allocation
 Multiple Participants Applicable
 Asset Ownership is Decided at the Completion of Project
 Zero or Limited Recourse Financing Solution
 Loan Repayment With Project Cash Flow
 Better Tax Treatment
 Sponsor Credit Has No Impact on Project
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 Financial Management Process

 Financial management means a way by which

appropriate expenses are been budgeted, planned, reported,
tracked, controlled, evaluated and approved. Financial
management process is actually concerned with decision making
in consider toward stage as well as strategy of corporate finance
plus structure and size of assets.
 The key elements of financial process management
are Financial Planning, Financial Control and Financial
Decision Making.
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There are specific
objectives of financial
management that
provide the basic
process framework
for optimum financial
decision.

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38
 Conducting Feasibility Studies

What Is a Feasibility Study?

A feasibility study is simply an assessment of the practicality of a
proposed project plan or method. This is done by analyzing
technical, economic, legal, operational and time feasibility
factors
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 Key elements of a good project feasibility study

1. Technical Capability
2. Budget
3. Legality
4. Risk
5. Operational feasibility
6. Time
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 Types of Project Feasibility Study

1. Technical Feasibility

2. Economic Feasibility

3. Legal feasibility

4. Operational Feasibility

5. Scheduling Feasibility
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 Conducting a Project Feasibility Study

1. Preliminary Analysis:
2. Define the scope:
3. Market research:
4. Financial analysis:
5. Roadblocks and alternative solutions:
6. Results re-evaluation:
7. The last decision:
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 Financial Planning in Project Management

1. Preparing to create your financial plan :

a. Understand the top-down approach to project
budgeting.
b. Understand the bottom-up approach to project
budgeting.
c. Choose the approach for you.
d. Discuss the needs of the project with key
stakeholders. 43
 Financial Planning in Project Management

2. Creating your Project Financial Plan

a. Determine your core costs
b. Consider non-core expenses
c. Add a reserve to help reduce your risk.
d. Create a table to record your costs.

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 Arranging a Financial Package

Other Funding Sources

1. Crowdfunding
2. soft funding

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 Controlling Financial Risk

Financial Risk

Market Risk Credit Risk Financing /Liquidity Operational Risk

Equity Risk Customer Risk Financing Fraud Risk
Interest Rate Supplier Risk Market Liquidity People Risk
Exchange Rates Partner risk Cash flow Model Risk
Commodity prices
Legal Risk

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 Benefits to Control

 The firm’s reputation or ‘brand’ is enhanced, as the firm is seen as successful and its management is viewed
as both competent and credible.
 Risk management can reduce earnings volatility, which helps to make financial statements and dividend
announcements more relevant and reliable.
 Greater earnings stability also tends to reduce average tax liabilities.
 Risk management can protect a firm’s cash flows.
 Some commentators suggest that risk management may reduce the cost of capital, therefore raising the
potential economic value added for a business.
 The firm is better placed to exploit opportunities (such as opportunities to invest) through an improved credit
rating and more secure access to financing
 The firm is in a stronger position to deal with merger and acquisitions issues. It is also in a stronger position to
take over other firms and to fight off hostile takeover bids.
The firm has a better managed supply chain, and a more stable customer base

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 Stages of Financial Risk Control

 Identifying the risk exposures

 Quantifying the exposure

 Making a "prevarication" decision

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 Options Models.

10 most common types of financial models:

1.Three Statement Model
2.Discounted Cash Flow (DCF) Model
3.Merger Model (M&A)
4.Initial Public Offering (IPO) Model
5.Leveraged Buyout (LBO) Model
6.Sum of the Parts Model
7.Consolidation Model
8.Budget Model
9.Forecasting Model
10.Option Pricing Model 49
THANK YOU!

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