Types of project implementation risks. Risks to consider in a business plan

Investment projects, by definition, refer to the future, which the analyst cannot predict with certainty. Therefore, the analysis of the project should be carried out taking into account risk and uncertainty.

Uncertainty is understood as the incompleteness and inaccuracy of information about the conditions for the implementation of the project, including the costs and results associated with them.

The uncertainty associated with the possibility of adverse situations and consequences arising during the implementation of the project is characterized by the concept of risk.

Risk classification:

1 External unpredictable risks:

1.1 Unexpected government regulation;

1.2 Natural disasters: floods, earthquakes, storms;

1.3 Crimes: vandalism, sabotage, terrorism, racketeering;

1.4 Unpredictable externalities: environmental, social;

1.5 Failures: in financing, due to the bankruptcy of contractors, due to errors in setting project goals.

2 External predictable risks:

2.1 Market risks;

2.2 Operational risks;

2.3 Unacceptable environmental impacts;

2.4. Negative social consequences;

2.5. Changes in exchange rates;

2.6. Off-set inflation;

2.7. Taxation.

3. Internal technical risks:

3.1 Disruption of work plans;

3.2 Cost overruns;

4. Technical risks:

4.1. Technology change;

4.2 Deterioration in the quality and productivity of production;

4.3 Errors in the preparation of documentation.

5 Legal risks:

5.1 Lack of patents, licenses, failure to fulfill contracts;

5.2 Litigation with partners not participating in the project;

5.3 Other extraordinary circumstances.

6 Insured risks.

In connection with the foregoing, one of the main tasks during the implementation of the investment project at AOZT "Shveya" is to compile a list of the most significant, and, first of all, uncertain risks (Table 12)

Table 12 - List of risks during the implementation of the project at CJSC "Shveya"

Project risks	Negative impact on earnings
Financial and economic risks
Volatility in demand for products	Falling demand due to rising prices
Tax increase	Decrease in net profit
Increase in production from competitors in the domestic and foreign markets	Decrease in sales volumes or price reduction
insolvency of consumers in the domestic market	Decline in sales volumes, decrease in profits
Rising prices for raw materials and supplies	Decline in profits due to rising prices
Technical risks
The instability of the quality of raw materials and materials	Decreased production volumes due to equipment changeovers, reduced quality

Risk management methods in project implementation

Risk management is the processes associated with the identification, analysis of risks and decision-making, which include maximizing the positive and minimizing the negative consequences of the occurrence of risk events. The project risk management process typically includes the following procedures:

Risk management planning - selection of approaches and planning activities for project risk management.

Risk identification - identification of risks that can affect the project, and documentation of their characteristics.

Qualitative risk assessment - a qualitative analysis of risks and the conditions for their occurrence in order to determine their impact on the success of the project.

Quantification - a quantitative analysis of the likelihood of occurrence and the impact of the consequences of risks on the project.

Risk response planning - determination of procedures and methods to mitigate the negative consequences of risk events and use the possible benefits.

Risk monitoring and control - monitoring risks, identifying remaining risks, implementing the project's risk management plan, and evaluating the effectiveness of risk mitigation actions.

All these procedures interact with each other, as well as with other procedures. Each procedure is performed at least once in every project.

1 Risk management planning.

Risk Management Planning - The decision-making process for applying and planning risk management for a specific project. This process may include decisions on organization, staffing of project risk management procedures, selection of preferred methodology, data sources for risk identification, time frame for situation analysis. It is important to plan risk management adequate to both the level and type of risk and the importance of the project to the organization.

2 Risk identification.

Risk identification determines which risks are likely to affect the project and documents the characteristics of those risks. Risk identification will not be effective if it is not carried out regularly throughout the life of the project.

Risk identification should involve as many participants as possible: project managers, customers, users, independent specialists.

3 Qualitative risk assessment.

Qualitative risk assessment - the process of providing a qualitative analysis of the identification of risks and the identification of risks that require a rapid response. This risk assessment determines the importance of the risk and chooses how to respond. The availability of accompanying information makes it easier to prioritize different risk categories.

A qualitative risk assessment is an assessment of the conditions for the occurrence of risks and the determination of their impact on the project by standard methods and means.

The use of these tools helps to partially avoid the uncertainty that often occurs in the project. During the life cycle of the project, there should be a constant reassessment of risks.

4 Quantitative risk assessment.

Quantitative risk assessment determines the probability of occurrence of risks and the impact of the consequences of risks on the project, which helps the project management team to make correct decisions and avoid uncertainties. Quantitative risk assessment allows you to determine:

Probability of achieving the final goal of the project;

The degree of impact of the risk on the project and the amount of unforeseen costs and materials that may be needed;

Risks requiring prompt response and greater attention, as well as the impact of their consequences on the project;

Actual costs, estimated completion dates.

Quantitative risk assessment often accompanies qualitative assessment and also requires a risk identification process. Quantitative and quantitative risk assessment can be used separately or together, depending on the time and budget available, the need for quantitative or qualitative risk assessment.

5 Risk response planning.

Risk response planning is the development of methods and technologies to reduce the negative impact of risks on the project. Takes responsibility for the effectiveness of protecting the project from exposure to risks. Planning includes identifying and categorizing each risk. The effectiveness of the response design will directly determine whether the impact of the risk on the project will be positive or negative.

The response planning strategy should be appropriate to the types of risks, cost-effectiveness of resources, and timing. The issues discussed during the meetings should be adequate to the tasks at each stage of the project, and agreed with all members of the project management team. Typically, several options for risk response strategies are required.

Monitoring and control

Monitoring and control follows the identification of risks, determines residual risks, ensures the implementation of the risk plan and evaluates its effectiveness, taking into account risk reduction. Indicators of risks associated with the implementation of the conditions for the implementation of the plan are recorded. Monitoring and control accompanies the process of project implementation.

Quality control of project execution provides information that helps to make effective decisions to prevent the occurrence of risks. Communication between all project managers is necessary to provide complete information about project implementation.

The purpose of monitoring and control is to find out whether:

The risk response system has been implemented in accordance with the plan;

Is the response effective enough or changes are needed;

Risks have changed from the previous value;

The onset of the impact of risks;

The necessary measures have been taken;

The impact of the risks turned out to be planned or was an accidental result.

Control may entail the selection of alternative strategies, the adoption of adjustments, the re-planning of the project to achieve the baseline. There should be constant interaction between project managers and the risk group, all changes and phenomena should be recorded. Project progress reports should be generated regularly.

Let us describe the method of quantitative analysis of managerial risk.

Project finance management has a different purpose than accounting and is a cost projection, while accounting always looks at the costs already incurred.

The presence of risk in the process of the subject's activity as a mandatory attribute is an objective economic law. In a market economy, it is impossible to manage a project without taking into account the impact of risk, and for effective management it is necessary not only to be aware of its presence, but also to correctly identify a specific risk.

Risk management is such a process of influencing a business entity that ensures the widest possible range of possible risks, their reasonable acceptance and reduction of the degree of their impact on the business entity to the minimum possible limits, as well as developing a strategy for the behavior of this entity in the event of the implementation of specific types risks.

Basic principles of the risk management process:

1. The principle of maximization, which provides for the desire for the most complete coverage of possible areas of risk occurrence, that is, this principle causes the degree of uncertainty to be reduced to a minimum.

2. The principle of minimization - means that the manager seeks to minimize, firstly, the degree of their influence on the project.

3. The principle of the adequacy of the response is that the project team must adequately and quickly respond to all changes that are expressed in the realization of the risk and the possibility of its occurrence, that is, in those cases when it becomes a reality.

4. The principle of acceptance - only when the risk is justified, the manager can accept it.

For the risk management process, it is necessary for managers to predict the emergence of certain problems and corresponding situations. A forecast is understood as a scientifically based judgment about the possible states of an object in the future, about alternative ways and terms of its existence. Forecasting management decisions is most closely related to planning.

Based on their practical significance of the risk management process, we determine the sequence of stages of this process:

The information and analytical stage makes it possible to assess the occurrence of the entire set of risks, regardless of whether the management apparatus can or not influence them in case of implementation.

Identification stage - all parameters of possible risks are set, taking into account the specifics of management activities and project specialization.

Stages of a comprehensive analysis - a complete analysis of the risk is made with the calculation of its level and degree of impact on the project.

Risk reduction - action planning. There is a search for ways of timely and high-quality protection against risk and the development of a specific mechanism for their implementation. Action planning, both for prevention and in case of risk realization.

Control of a possible or emerging situation. Having done all of the above, it is necessary to control the situation in order to respond at a certain stage

Implementation of the action program in case of risk.

Analysis, generalization, conclusions and proposals for the future.

There are the following risk assessment methods:

1. Assessment of the importance of the risk.

2. Statistical method of risk assessment.

3. Analysis of sustainability (sensitivity) of the project.

4. Method of private risks.

Project underfunding risk The risk that project participants will not fulfill their obligations to finance the project, including the borrower's obligations to invest its own funds in the project. The risk is high with a complex project financing scheme, with a significant amount of investments from the borrower and other project participants.
The consequences of underfunding the project are expressed in the failure to achieve the goals of the project (failure to reach the design capacity, the inability to provide a full production cycle, etc.) or the complete failure to fulfill the goals of the project. In case of underfunding of the project, the bank must either, together with the borrower, find an additional source of project financing or take on additional risks by increasing the amount of financing. The bank can avoid this risk if the financing scheme is designed in such a way that the bank invests its money last. Other possible methods of risk management: guarantee of the participant under the loan agreement or other security of the obligations of the borrower, security of the obligations of the participant under the financing agreement, for example, the guarantee of the parent company of the participant. Considering that in our case the bank is the parent company, the bank takes on the risks associated with a lack of funds, receiving additional income in this case.
Risk of default by suppliers and contractors.
The risk of failure by suppliers and contractors to fulfill their obligations for the supply of equipment, construction and installation works, warranty service. The risk is present at the investment phase of the project, it can be expressed in the excess of the cost of work, delaying the timing of work, equipment supply, failure to achieve the quality parameters necessary to achieve the project's goals (the so-called derivative risks). The risk is high in the absence of supply experience, in the absence / unsuccessful choice of a general contractor, in the case of an unsuccessful choice of equipment suppliers, a large number of technically complex works. To minimize the risk, it is necessary to: - conduct a careful selection of suppliers and contractors, - provide for penalties in contracts,
- do not start financing the project before the conclusion of all contracts on terms that suit the bank,
- provide for a letter of credit form of settlement under contracts, - use various forms of insurance against risks.
- provide guarantees for the return of advance payments and guarantees of due performance or provide for the payment of principal amounts under contracts after the obligations of suppliers and contractors have been fulfilled,
The risk of non-performance or improper performance of work by suppliers and contractors always remains due to the fact that the development of a new production is an extremely time-consuming and technically complex process, depending on many objective and subjective reasons. When implementing a project related to the construction of new housing for the population, technical risks are significantly reduced:
The risk of failure to achieve the specified project parameters, we are talking about identified defects in construction and installation works, in the supplied equipment, its completeness, inconsistencies and inconsistencies that do not allow organizing a normal technological process;
Structural risk - the risk of technical impracticability of the project, due to gross errors in the development of the project, the wrong choice of project products, basic technologies. A sign of the presence of risk is the absolute novelty of the project products, technologies, etc.
Production risks - risks of disruption of the normal production process and / or cost growth due to technical reasons, interruptions in supply, shortcomings in the extracted raw materials, conditions or production volumes, environmental problems, etc. The risk is present in the production phase of the project and can be expressed in an increase in current costs, failure to reach the design capacity, violation of the rhythm of production, stoppage of production, decrease in product quality.
Risk of project cost increase The risk of increase in investment costs after the start of project financing is present at the investment phase of the project and may be due to both the risk of default by suppliers and contractors, and errors in design, in
assessment of the need for working capital, as well as rising prices, taxes, duties, etc. The risk factors are the same as for the risk of default by suppliers. Costs may initially be overpriced if there are intermediaries in the scheme (risk of fraud), suppliers and contractors were not selected on a competitive basis. The selection of suppliers and contractors is carried out by the investment and mortgage company, and the level of risks associated with the fulfillment of obligations in good faith will to a certain extent depend on the level of qualification and competence of the employees and specialists of this company.
Risk of time extension.
The risk of delaying the construction of facilities, the delivery of equipment, is present in the investment phase of the project and may be due to both the risk of default by suppliers and contractors, and errors in the design / implementation of work, accidents, changes in the external environment, administrative risks, force majeure risks circumstances. The risk is especially high with a large amount of construction and installation work, with complex infrastructure projects, with the possibility of claims against finished facilities from the supervisory authorities. Using the financial model of the project, it is possible to calculate the consequences of an increase in the project implementation time for the bank. To minimize the risk, it is necessary to control the correct preparation of contractual documentation (sanctions for violation of deadlines). In addition, it is advisable, taking into account the level of risk, to provide for a grace period in the loan documentation for repayment of the principal debt.
Management risks.
They can manifest themselves both in the production phase of the project and in the investment phase of the project and consist in possible errors in the management of the enterprise, which will result in failures in the construction of facilities, the acquisition and commissioning of equipment, in the production and marketing of project products. The risk is high if the qualifications of project managers are insufficient, a new team is formed, when the company's management changes.
Only a qualitative assessment of the magnitude of this risk is possible in the course of project development and negotiations with the borrower's managers. There are not many effective ways to minimize this risk, it is either the participation of the bank in project management or the refusal to finance the project.
Marketing risks The risk consists in failure to achieve the specified volumes of sales of products, specified sales prices, delay in entering the market, low payment discipline. Marketing risk is often the most significant risk in the production phase of a project, due to selection errors, lack of a properly built sales network, lack of advertising, as well as market price fluctuations, competitor actions, demand fluctuations. The risk is especially high when launching new products. One of the ways to minimize this risk is: the conclusion of contracts for the sale of square meters of housing even before the object is put into operation (mortgage of unfinished construction of real estate). Refusal to finance the project before the development of a strategy and marketing plan - the borrower must make a convincing argument in favor of the fact that the project's products will be sold on the conditions laid down in the calculations.
administrative risks. The risk of non-obtaining or delays in obtaining licenses, permits, permits, etc. from state regulatory and supervisory authorities, the risk of changes in supervisory and regulatory standards during the implementation of the project. The risk can be great if the activity requires obtaining
licenses and permits, assessed by experts. To minimize the risk, it is necessary to check the availability of all permissive and approval documentation before the start of project financing.
Legal risks Risks associated with imperfection of legislation, lack of judicial practice on certain issues, imperfection of the system for the execution of court decisions, the possibility of changing legislation in the course of servicing debts. The risk also arises in connection with possible errors in the registration of ownership of the objects involved in the project. Risks are assessed by experts and can be reduced by involving highly qualified lawyers at all stages of document preparation and project implementation.
Risks of loss of collateral. If this is a guarantee or guarantee, then the risk of refusal to fulfill obligations is assessed. The risk can be reduced mainly due to the proper choice of the guarantor / guarantor, assessment of the risk limit on it; an additional measure is the conclusion of an additional agreement on the right to write off funds from the accounts of the guarantor. When pledging equipment, real estate or goods, the risk of accidents, fires, breakdowns, illegal actions of third parties, and fraud of the mortgagor is assessed. The risk is assessed by experts, a measure to reduce the risk is insurance, periodic monitoring of the condition of the collateral. With a mortgage, a prerequisite for concluding a loan agreement is real estate and life and health insurance of the mortgagor, in the case of using the proposed vector scheme - the buyer of the apartment.
Force majeure risks.
Risk of force majeure, such as natural disasters, fires, wars, strikes, etc. Evaluated by experts, partially covered by insurance.

Project risks name such events (or conditions) that have a negative or positive impact on one or more project objectives. Project risks include timing, cost, quality, or scope. The risk depends on a specific project, for example, when a goal is defined for the final result according to a certain action plan, or the final result should be a project that does not exceed the cost specified in the budget, and so on. It can be triggered by several reasons, which in turn will affect certain project factors.

Project risks: understanding the concepts

Project risk- this is an effect that allows you to accumulate the likelihood of a series of events that will positively or negatively affect the goals of the project itself. They are divided into two types: known and unknown. As a rule, known threats can be recognized at the beginning of the project, which allows them to be managed - to create contingency plans that provide for possible losses. And unknown risks cannot be determined in advance, so it is impossible to predict further actions.

Risk event- an event that can occur during the implementation of the project, while it will bring a benefit or harm.

Probability of risk occurrence- possible threat. Each risk in the implementation of the project is assigned a share of more than 0%, but less than 100%. Risk with 0% probability - not considered a risk because it cannot happen. And a risk with a 100% probability is also not a risk, but a real event, which is necessarily provided for by the project.

Consequences of risk- labor costs, money, failures of the action plan - determine the degree of influence on the implementation of the project goals.

The magnitude of the risk is an exponential value that combines its probability with its consequences. The formula for calculating the magnitude of the risk = probability of occurrence of the risk * appropriate actions.

Reserve for contingencies(or a reserve to cover uncertainty) - represents a certain amount of money or a time period. Everything you need to calculate how to reduce the risks of cost overruns, as envisaged by the project objectives, to a cost level acceptable to the organization. A contingency reserve is included in the base project cost plan.

Management reserve- also presented in the form of money or a certain period of time, which are not included in the basic project cost plan, but are used by the head of the enterprise in order to prevent possible negative consequences that cannot be predicted.

risk tolerance– determining the degree of readiness of the organization to possible threats. Some organizations are ready to take risks, while other organizations avoid these risks in every possible way. Someone takes big risks to earn even more, and someone eschews the problems associated with the loss of finances.

At its core, risk is a form of uncertainty. However, there is a significant difference between these two concepts.

Uncertainty is a set of factors that do not determine the outcome of actions, and the degree of possible influence of these factors is not known in advance. Uncertainty is also the incompleteness and inaccuracy of presenting information about certain conditions of work on the project. Uncertainty is caused by external or internal factors. External factors are understood as legislation, the influence and reaction of the market to the demand and production of goods, the activities of competitors. Internal factors include the professionalism of the organization's employees, the proportion of errors in the definitions of design characteristics, and others.

Risk is a possible, qualitatively and financially measurable loss. The concept of "project risk" reflects the degree of danger for the positive implementation of the project. The concept of risk is the uncertainty associated with the occurrence of negative situations in the implementation of the project, which entails adverse consequences. Such risks arise from objective and subjective probabilities.

19 main risks for Russian companies

As a Russian company develops, it goes through a large number of microcrises, at least 19. How do successful specialists cope with them? You will learn about this from the article of the electronic magazine "General Director".

Main types of project risks

Systematic risks are beyond the control and influence of project management. They are always there. These include:

• political factor (political situation in the country, changes in the socio-economic sphere);
• natural factors, ecology, natural disasters;
• legal, legal risks (imperfection of the legislative framework);
• economic risks (volatility of the exchange rate in the currency market, taxation, sanctions, and others).

The amount of systematic, or "market" risk does not depend on the specifics of a particular project, but on the situation on the market as a whole. In those countries where the stock market is well developed, to determine the degree of impact of these risks on the ongoing project, a special coefficient β has been introduced, the use of which is based on stock market statistics for each specific industry or organization. In our country, this statistics is not common, on the basis of this, it is customary to use expert estimates. Depending on the probability of risk, various measures are envisaged in order to avoid negative consequences during the implementation of projects. Certain scenarios for the development of the project plan are being developed, based on a number of external conditions.

There are so many reasons why law enforcement officers come to the company, as if doing business itself is already suspicious. It does not matter how strictly you yourself comply with the requirements of the law. If at least one of your counterparties falls into the sphere of attention of law enforcement officers, the probability of a visit by law enforcers is very high.

Non-systematic risks can be eliminated partially or completely, thanks to competent project management:

• related to production (non-fulfillment of the sales plan, work, production volumes, etc.);
• associated with financial losses (shortage of profit from the project, lack of liquidity of products);
• related to the market situation (pricing instability, new competitors in the business niche).

Most unsystematic risks are manageable. They are divided into several groups based on their impact on the implementation of the project.

The risk of not receiving the expected income from the project implementation

Manifestation: the project is not effective, has an NPV value (negative value). In this case, we mean a global increase in the payback period of the project. This group includes risks associated with financial flows in the operational phase, namely:

Marketing risk - the possibility of shortfall in profit due to the fact that the sales plan was not fulfilled or a large-scale reduction in sales prices was made against the background of the planned ones. The profit of the project is determined by the revenue, and to a greater extent affects the efficiency. That is why marketing risks are key among all possible ones. In order to reduce the likelihood of its occurrence, a thorough study of market conditions is required, the identification of factors that may affect the project, forecasting their occurrence or strengthening, and identifying ways to eliminate the negative consequences of these factors. By factors, we mean all kinds of changes in the market in a particular business area, increased competition, a weak position in the market, a decrease in demand and prices for project products, etc. A qualitative assessment of marketing risks is important, especially when it comes to launching a new production facility or increasing existing production capacity. If the goal is to reduce production costs, then they are studied last.

Example: if we are talking about the construction of a hotel, then marketing risks affect two characteristics: the cost of rooms and their occupancy. If the investor has set the room rates based on the location of the hotel and its class, then the main factor of uncertainty will be the occupancy of guests. It is necessary to determine the ability of a given enterprise to “survive” at various occupancy rates. The possible values ​​of this parameter are revealed by the statistics of the study of the hotel business market in a particular area. If there is no statistics, then the values ​​are set analytically.

The risk of exceeding the production cost of products

The case when the costs exceed the planned finances for the implementation of the project, which entails a decrease in profits. In this case, you need to analyze the costs of your enterprise and similar (possibly competing with yours) suppliers of raw materials (remoteness, delivery, availability of alternatives), predict the cost of raw materials.

Example: suppose that the raw materials consumed by the project contain agricultural products, or, for example, an impressive part of the cost is the cost of petroleum products, so the dependence of raw materials prices on specific factors should be taken into account: harvested volumes, market conditions, energy costs, etc. d. Naturally, the cost of raw materials cannot be fully included in the price of products. Especially important in this case is the study of the dependence of project results on the amplitude of the cost in a certain period of time.

1. Technological risks - associated with a shortfall in profit due to the fact that the production volume plan was not fulfilled or the cost of production increased due to the use of new technologies.

Technological risk factors:

1. Features of the technology used are well-established production processes, their applicability in certain conditions, the conformity of raw materials, and so on.
2. The dishonesty of the equipment supplier - failures in the supply of equipment, marriage, poor quality service.
3. Lack of affordable service for servicing purchased equipment - the lack of regional service representatives leads to long downtime in production.

Example: consider technological risks in the construction of a brick factory. Initial conditions: the premises are available, the equipment is purchased, the sources of raw materials are known, and the equipment is supplied by one well-known manufacturer in the form of a turnkey production line. In this case, technological risks should be minimal. And if, during a project with the construction of a brick factory, only the place where the quarries are located for the extraction of raw materials is known, and the building needs to be built, the equipment must be purchased and installed at its own expense and by various suppliers, the technological risks will be huge! Most likely, a third-party investor will have the right to demand additional guarantees or removal of risk factors.

2. Administrative risks - associated with a shortfall in profit due to the excessive influence of administrative power. If the authorities are interested in the implementation of the project, then these risks are significantly reduced.

Example: The risk associated with difficulties in obtaining a building permit is common. Banks rarely engage in the financing of commercial projects in the field of commercial real estate without the necessary permission, considering these risks unreasonable.

You will be taught how to successfully resist risks and choose the best anti-crisis strategy for your company on a course from the School of the General Director.

Risk of insufficient liquidity

Manifestation: At the end of the forecast period, the budget has a negative cash balance. There may be risks of investment projects, and in the operational phase:

The risk of exceeding the project budget. It arises due to the fact that it took more investment than previously planned. This risk can be significantly reduced with a detailed investment analysis already at the project planning stage. This requires its comparison with similar projects, industries, analysis of the technology chain, viewing the full scheme of the project, setting the amount of cash flow. It is recommended to plan for contingencies. A 10% over budget would be considered the norm. Based on this, it is necessary to provide for a limit on available funds when applying for a loan for a project.

Risk of discrepancy between the investment schedule and the financing schedule. Financial investments come with a temporary delay or not in the amount that was planned. Or there is a strict schedule of a bank loan, which does not allow the slightest deviation from payments. In order to avoid the negative consequences of the risk, you should initially reserve your own money, or, as for credit funds, when signing the contract, take into account the possibility of fluctuations in the timing of the withdrawal of money.

The risk of shortage of funds at the stage of reaching the design capacity. It is he who provokes a delay in the operational phase, a slowdown in the rate of reaching the planned capacity of the project. The reason lies in the unconsidered working capital at the planning stage.

Risk of shortage of funds in the operational phase. The decrease in profits and the lack of finances to pay off credit obligations and debts to suppliers are influenced by internal and external factors. When borrowing funds for a project, one of the main ways to reduce the risk of a shortage of funds is to use the debt coverage ratio derived during the construction of the loan repayment schedule. The method is to set the fluctuation of the money earned by the company in accordance with the forecasts of situations in the market and the economy as a whole. So, with a coverage ratio of 1.3, the company will lose 30% of profits, but will retain the ability to repay credit obligations.

Example: Initially, building, for example, a business center, will not seem like a risky project if you study only price fluctuations. Statistics show that the fluctuations will not be so great over the general period of the project's existence. But the situation is completely different when the rate of rental and debit with credit are taken into account. A business center built using credit funds will easily go bankrupt even in a short period of crisis. This is exactly what happened with a huge number of objects that began their activities at the end of 2008.

The risk of non-fulfillment of planned work in the investment phase for organizational or other reasons

Manifestation: The start of the operational phase is delayed or not started at full capacity. There is a pattern that the complexity of the project directly depends on the requirements for the quality of its management. In order to minimize this risk, it is necessary to select a team of qualified specialists to manage the project, select the most profitable options for the supply of equipment, conclude contracts with contractors for the implementation of a turnkey project, etc.

• Project Management: 10 Conditions for Successful Implementation

Practitioner tells

Alexey Kosarev, Head of the System Analysis and Risk Management Department, OJSC Magnitogorsk Iron and Steel Works.

Any risks are grouped into certain types. Personally, I stick to considering the following:

• related to pricing issues for the project products, as well as the prices of raw materials, materials and services used;
• property (meaning the loss or damage to the main fund);
• market (monitoring the exchange rate, stock indices, the value of assets, securities);
• associated with theft and actions of fraudsters.

For manufacturing enterprises, accidents, industrial accidents, etc. become special risks. For trading companies, logistics, intermediation in supply and distribution, unscrupulous suppliers (especially if there is only one supplier), receivables of wholesale buyers (especially if payment is made with a deferred payment) become risks.

At the enterprise where I work, a list of certain risks and provoking factors was formed. Each risk has a specific and unambiguous formulation, which allows you to consider in detail the causes of their occurrence, and greatly simplifies the process of assessing risks and developing measures to reduce them. A very convenient way to analyze risks is their graphical representation in the form of a table of coordinates “damage” / “probability”. There is no particular difference in their presentation in the form of a map or in a table. We just think that it is most convenient for us to represent the risks on the coordinate plane. It clearly shows dynamics. But in general, an enlarged view is useful when automating a management system, especially you need to have information about risks regarding types of activities, business processes or structural divisions of an enterprise.

Project risks and work with them: 6 main steps

Step 1: Planning for risk management

Risk management planning needs to be as thorough as planning the cost and schedule of the project itself. It should be borne in mind that well-planned risks increase the likelihood of achieving your goals.

Risk management planning is a process in which approaches are defined and actions are planned to manage project risks. The strategy of the organization is formed, the basic rules are formulated, which allows them to be managed.

There are 4 sources of information for organizing project risk planning processes:

1. Factors of the external environment of the enterprise. The attitude of the people involved in the project has a huge impact on the project management plan.
2. Organizational process assets. Each organization may have predefined approaches to risk management, such as categories or general definitions, templates, standards, naming schemes for responsible employees, and documents defining levels of authority in making important decisions.
3. Description of the content of the project.
4. Project management plan.

Planning and review meetings are considered to be a tool and method for risk management planning. The meetings are attended by the project team, the project manager, representatives of the organization, who are responsible for risk planning operations and the company's possible response to them. The participants of the meeting draw up the main plans for conducting risk management operations, develop cost components and planned operations included in the project budget and schedule. At the meeting, the degree of responsibility is distributed among the project participants in case of a risk. If an organization has common templates that define risk categories, terms (such as risk levels, probability of their occurrence by type, possible consequences of risks for a project, a matrix of probabilities and consequences), then they are adapted to each specific project, taking into account its specifics. And then a risk management plan is already formed.

Step 2. Risk identification

Risk identification is the process of identifying risks that may affect the project in any way, as well as documenting their characteristics. Project team members and risk management experts conduct risk identification. Customers of the project, participants and experts of a narrow profile can also take part in it. The process of identifying risks is iterative in nature, as new ones may arise during the development of the project. Each special project has its own unique composition of participants and frequency of iteration. The participation of project team members in the risk identification process helps to develop in them a sense of ownership and responsibility for each risk and their further actions to respond to them.

The input information for the risk identification process is:

1. Factors of the external environment of the enterprise - information comes from open sources, taking into account commercial databases, scientific papers and other research work in the field of risk management.
2. Assets of the organizational process - information on the implementation of previous projects.
3. Description of the content of the project. Project tolerances are specified in the description of the scope of the project. The absence of uncertainty in the design tolerances is required, otherwise the threat of risks is visible.
4. Risk management plan. The outputs of the risk identification process from the risk management plan are the order of assigning responsibility, the reserve for risk management activities in the budget and schedule, and risk categories.
5. Project management plan. Determining the type of risk requires understanding the project schedule management plans, the price and quality of goods in the project plan, and of course analyzing the outputs of these processes.

Reviewing the documentation involves reviewing project materials developed prior to the review. First of all, the quality of plans lends itself to analysis, then the consistency of plans, their compliance with the requirements of Customers, project tolerances, solid plans for content, timing, cost are considered - absolutely everything that will serve as a risk provocateur in the project is taken into account.

Information collection methods:

1. Brainstorming is a meeting of 10-15 people: members of the project team together with independent experts from different fields, where they develop a detailed list of project risks. Each participant in the meeting names the threats that, in his opinion, are important to the project. Discussion of the proposals put forward is not allowed. All risks are sorted into categories and specified.
2. Delphi method. The only difference with brainstorming is that the meeting participants don't know each other. There is a facilitator who asks questions in order to get ideas about the risks of the project, collects the answers of the experts present. The experts' responses are then analyzed, categorized and fed back to the experts for comments. The agreed list goes through several rounds of the Delphi method. It excludes pressure from employees and the fear of expressing their idea in the presence of colleagues.
3. The nominal group method aims to identify risks and rank them in order of importance. Groups of 7-10 experts take part in the implementation of this method, each of which lists the risks of the project that he sees, without discussion. After all the possible risks of the project are identified by common forces, a joint discussion begins and the list of risks is re-compiled as they become important.
4. Crawford cards. A meeting of experts is held - 7-10 people. Usually a group of 7-10 experts gathers. The facilitator informs that he will ask the group 10 questions, for each of which the participant must give answers in writing, on a separate sheet of paper. The question of which of the risks is the most important for the project, the facilitator asks several times. Each participant is forced to consider ten different project risks.
5. Surveys of experts with solid experience working on various projects.
6. Identification of the root cause. The need to identify significant causes of risks and their distribution into groups is pursued.
7. Analysis of strengths, weaknesses, opportunities and threats (SWOT analysis). It is necessary to analyze the strengths and weaknesses of the project and its environment. After evaluating the environment, it becomes clear what the external environment threatens and what is favorable for the project. Analysis of checklists. The lists reflect all the risks that are based on the knowledge and input information accumulated during the implementation of such projects.
8. analogy method. To identify risks, accumulated experience and knowledge on risk management from similar projects is used.
9. Methods using diagrams. To depict risks, cause-and-effect diagrams are used, and flowcharts that allow you to streamline the sequence of events in a particular process.

As a result of identification, a Risk Register is formed, which contains:

1. List of identified risks.
2. A list of response actions is displayed in case of threatening uncertainty.
3. The main reasons for the emergence of risk are indicated.
4. The list is divided into categories.

In the course of identification, the resulting list of risk categories can expand, which leads to an increase in the hierarchy in their structure, obtained in the course of drawing up a risk management plan.

• How to make decisions about launching investment projects

Practitioner tells

Lilia Kukhareva, Managing Partner of KRES-Consulting, Moscow

A special approach to the organization of work is the Project. It is project management methods that are most effective when an organization sets itself a complex new task, for which there are severe budget and time constraints. Thanks to this, it is possible to make a major transformation in the organization, for example, to implement ISO 9001:2000, the process approach, Lean technologies. Thus, there are projects to develop innovations in business.

In the course of work on the project, all participants closely interact in it. Experts from various structures are involved in solving complex problems. The approach to work must be coordinated in order to meet deadlines, and creative in order to cope with any task. The team must become a team. It is the team that is responsible for the final result of the project.

Step 3. Qualitative risk analysis

In risk management, there is a main problem associated with the size of their list formed at the identification stage. The fact is that it is not possible to manage all the risks, as this is fraught with serious financial and personnel costs. Therefore, it is important to distribute them into groups according to priority. The primary classification of risks can be based on the time of their onset. Close risks are given high priority. They should then be ranked in order of importance in order to proceed with further analysis and planning of actions in case of risk. The fastest and cheapest way to prioritize is a qualitative risk analysis, which is carried out throughout the project and reflects every change that comes into contact with the risks of the project.

Qualitative analysis is carried out in the presence of the following information:

1. Assets of the organizational process - considers data on risks that have happened in other projects, as well as the accumulated knowledge.

2. Description of the content of the project.

3. Risk management plan containing the following elements:

• appointment of responsible people in risk management, including budget and planned operations to manage them;
• risk groups by category;
• prescribed probability of occurrence of risks and their consequences;
• compiled matrix of probabilities and consequences of risks;
• an indication of the risk tolerance of the project participants.

4. Risk register containing a list of risks to be identified.

5. Tools and methods for conducting a qualitative risk analysis:

• determining the likelihood and impact of risks. all identified risks are subjected to an assessment of likelihood and impact by experts, and are also ranked based on the definitions provided in the project management plan. those with clearly low likelihood and impact are not included in the overall rating, but are on the list of risks that are being monitored further;
• probability and consequences matrix - allows you to determine the degree of risk for each goal separately, for example, for project cost, implementation time or scope. the degree of risk allows you to control the response time. for example, threats from a high-risk area (indicated in red) require preventive action and an operational strategy to respond. and for green zone risks, preventive operations are not relevant;
• risk classification is an excellent tool for distributing incoming information related to project risks and a convenient search system for similar cases. Risks are classified in order to be able to divide them into groups and identify managers who better than others understand the features of a particular risk.

Qualitative risk analysis allows you to update their register based on the following information:

• ranking project risks by priority;
• lists of risk groups by category;
• lists of risks from the "red zone" that require immediate response;
• lists of risks requiring further study;
• results of a fruitful risk analysis.

At the end of this stage, it becomes possible to assess the overall risk level of the project in relation to quality: the project is high-, moderate-, low-risk. These evaluation criteria allow you to independently determine, for example, at what number of "red" levels the project will be considered "high risk". It is best to record your subjective assessment separately and then monitor its dynamics, which will be a reflection of the quality of work in the project.

Step 4. Quantitative Analysis

Quantitative risk analysis - analysis of the impact of certain risks on the overall objectives of the project.

Quantitative analysis is performed for those risks that were identified during the qualitative analysis. An important assessment of such an analysis is the identified likelihood of occurrence of risks and the amount of benefit or damage. A risk analysis is performed, with a high or medium degree of probability. And the method of analysis is determined for each specific project, depending on its timing and funding.

The initial information in the quantitative analysis was:

1. Organizational process assets.
2. Description of the content of the project.
3. Risk management plan.
4. Risk register.
5. Project management plan.

The most common methods for quantitative project risk analysis are:

• sensitivity (vulnerability) analysis;
• scenario analysis;
• risk simulation using the Monte Carlo method.

In order to explore each of the above methods, you need to have a general idea about them. Quantitative analysis is based on the basic version of the project risk calculation. Qualitative analysis allows you to determine the factors that affect the risks of the project. The objective of quantitative analysis is to numerically measure the impact of changes in risk factors on the positive effect of the project.

Sensitivity analysis identifies those risks that have the greatest impact on the project. The method is to track the parameters that affect the project under study. After the parameters are fixed, changing one of them, it becomes possible to influence the situation. Suppose, considering the issue of the possible profit of the Project Implementer, it is necessary to highlight the parameters that affect it: the lack of specialists among the staff, the need to attract qualified employees, the lack of office space, the need to rent, the lack of a minimum set of technical equipment to equip workplaces and the need to purchase the necessary technical means. After that, a sensitivity analysis is performed for each parameter that has the highest degree of risk.

Scenario analysis. Based on the development of sensitivity analysis techniques. As a result of its implementation, the entire group of variables is subject to simultaneous and unquestioning change. Three types of scenarios are calculated: pessimistic, optimistic and most realistic. Based on these calculations, new values ​​are built for the NPV and IRR criteria. These indicators are compared with the main values, giving all the necessary recommendations, which contain the “rule”: despite the optimistic scenario, the project cannot be further considered if the NPV criterion has a negative value, and vice versa: the pessimistic option with a positive NPV value is the most acceptable, even taking into account possible worst case expectations.

Risk analysis using the Monte Carlo simulation method is a combination of sensitivity analysis and scenario analysis methods. This method can be implemented only with the help of a special computer program that will give the result in the form of a probability distribution of possible project outcomes, for example, the probability of the NPV criterion<0.

Even in the process of risk identification, a risk register is formed, with a qualitative risk analysis it is updated, with a quantitative analysis, the register is updated again. The risk register is part of the project management plan, therefore, the following elements of it are updated:

1. Probabilistic analysis of the project, evaluates the possible outputs of the project schedule and its cost. A list of project completion milestones is compiled. As a result of the probabilistic analysis of the project, a distribution of cumulative probabilities appears, taking into account the risk tolerance of the project participants, so that it is possible to correct the cost and time reserve for force majeure.
2. Probability of achieving cost and time targets. Based on the results obtained with the help of quantitative risk analysis, it is possible to assess the probability of achieving the project goals, the background for which is?

The effectiveness of investments largely depends on how fully and objectively the risks were taken into account at the pre-investment stage, even before the decision to finance the project was made. This decision will help the entrepreneur, when evaluating an investment project, to take into account as correctly as possible all the threats associated with its implementation.

Assess the risks in the implementation of the project

A detailed algorithm for adjusting the discount rate for a risk factor, a comprehensive analysis of threats are the main advantages of this solution. They will help to justify the feasibility of investments and to foresee possible losses. Their disadvantages include a significant impact of expert assessments on the reliability of calculations, which may result in incorrect conclusions about the economic efficiency of the project.

Among all the risks inherent in investment projects, one can single out a decrease in profits, the value of assets, and the occurrence of additional costs. Accordingly, the tasks of risk analysis are to obtain reliable criteria for the effectiveness of an investment project and increase the validity of an investment decision.

How to reflect risks in the discount rate for an investment project

One of the easiest ways to take into account project risks is to reflect their level in the discount rate that is used in calculating the project's economic efficiency indicators. For these purposes, the most appropriate is the cumulative calculation method (build-up approach), which makes it possible to identify various risk factors by expert means.

Formula. Calculation of the discount rate taking into account risk factors using the cumulative method

Tip: There are several indicators that can be taken as a risk-free rate.

Determining the discount rate using the cumulative method is most suitable for Russian conditions. The risk-free rate of return can be taken as the yield on long-term bonds of the Government of the Russian Federation, on deposits of Sberbank, as well as on foreign government securities with a maturity of 10–20 years.

Depending on the complexity and scale of the project being implemented, external expert consultants can be involved in assessing risk factors (especially if the project is planned to be implemented in an unfamiliar region).

Before assessing risk factors, it is necessary to decide in what range it will be carried out. For example, 1 percent is minimal risk, 4 percent is medium risk, and 7 percent or more is high risk.

As a rule, the value of the range of possible risk adjustments is determined by an expert, depending on the number of factors considered, as well as the reliability and relevance of the available risk information.

Based on the range of risk adjustments, the significance of one or another risk factor from the list (see Table 1. Distribution of risk assessments by factors) for the implementation of the project is assessed (1 - risk with the lowest significance, 7 - with the highest).

If external expert consultants are involved in the assessment, then the arithmetic average of the total risk adjustments from each expert will be the final risk adjustment most likely for this investment project. Summing up this value and the risk-free rate of return, we determine the discount rate for calculating the cash flow and performance indicators for the project.

A similar methodology for assessing project risks is widely used in practice, since it is quite simple and allows you to take into account the risks of the project even at the selection stage. However, this approach has a significant drawback - it gives only an approximate idea of ​​the level of riskiness of the project, not allowing individual factors to be taken into account. Therefore, entrepreneurs who finance projects primarily with borrowed funds should conduct a comprehensive risk analysis.

Table 1. Distribution of risk assessments by factors (fragment)

№	risk factor	Risk Adjustment
1%	2%	3%	4%	5%	6%	7%
1	Group 1. Economic and political factors
2	General economic trends			+
3	Foreign economic activity				+
4	Inflation					+
5	Investments			+
6	Incomes and savings of the population			+
7	Taxation system					+
8	Threat of redistribution of property			+
9	Domestic political stability				+
10	Foreign policy activity			+
11	The threat of terrorist attacks			+
12	Number of factors in the group, pcs., including:	10
13	broken down by range of risk adjustments	0	0	6	2	2	0	0
14	The product of the number of factors and the values ​​of the respective risk adjustments (page 13 × risk adjustment)	0	0	18	8	10	0	0
15	Risk adjustment for group 1 total, % (sum on line 14: line 12)	3,6
16	Group 2. Regional and social factors
…	…	…	…	…	…	…	…	…
24	Risk adjustment for group 2, %	3,75
	…	…	…	…	…	…	…	…
	Total: total risk adjustment (sum of adjustments by group), %	16,06

How to assess the likelihood of risk realization when planning an investment project

A comprehensive study allows you to identify and study the most significant risks for the project, calculate the probable values ​​​​of economic efficiency indicators (taking into account possible losses) and, as a result, make an informed investment decision. A full-fledged analysis of risks includes their identification, qualitative description, measurement and assessment of the impact on economic efficiency indicators, designing scenarios for the development of events. In principle, by adding one more component to this system - risk management and control over them - we can talk about a risk management system for project activities (see diagram. An integrated approach to project risks).

Qualitative risk analysis. Qualitative analysis implies the identification of risks inherent in the project, their description and grouping. Usually, specific risks are identified that are directly related to the implementation of the project (project), as well as force majeure, managerial, legal. For the convenience of further tracking, project risks should be taken into account by stages: initial (pre-investment), investment (construction) and operational. The result of the stage of qualitative risk analysis should be a risk map of the investment project.

It should be remembered that the costs of risk identification work and subsequent activities should not exceed the effect obtained. In practice, the number of identified project risks can reach 150 for complex objects, but no more than 30–40 are considered on average.

The description of risks does not provide information about possible losses or their likelihood, it serves as the basis for a quantitative risk analysis.

Quantitative risk analysis. The task of quantitative analysis is to identify the most significant risks in terms of their impact on the net present value (NPV) of the project and determine the likelihood of their occurrence. Based on its results, it can be concluded whether it is worth implementing the project with the detected level of risk and the corresponding amount of potential losses.

Tip: to make an objective decision on the project, rank the risks not only by the likelihood of their occurrence, but also by the significance of the impact.

Sensitivity analysis. The most significant risks that have a significant impact on the net present value of the project are identified through sensitivity analysis. It can be carried out for all identified risks, but it is too laborious. For this reason, aggregated risk factors are singled out, the most important, according to experts, often occurring in practice or contributing to the emergence of other risks. The value of each risk factor and its impact on the income and expenses of the project are determined on the basis of expert opinion, then the planned value of NPV is recalculated.

Note that the NPV sensitivity calculation begins with the choice of the range of possible changes in the values ​​of the risk factor. It is assumed that each of the risk factors has five possible implementation scenarios: decrease by 20 percent, by 10 percent, increase by 20 percent, by 10 percent, and an intermediate scenario with no change (0%). From the selected risk factors, you need to choose those that have the most significant impact on the NPV value. They are subject to further analysis. The number of significant factors depends on what threshold for reducing the NPV of the project is acceptable for the entrepreneur. If, for example, it is 5 percent, then all risk factors that have a greater impact on NPV can be classified as significant.

Probability of realization of risks. In order to avoid disagreements when determining the probability of occurrence of risk events, it is advisable to use an auxiliary (explaining) scale (see Table 2. Risk factor probability scale).

Table 2. Risk factor probability scale

The likelihood of material risk factors occurring is determined in two stages. First, the probability that the factor will change in principle is calculated (the so-called probability of the first level). For example, according to expert assessment, the probability of meeting the implementation deadlines is 40 percent (ie, the deadlines will be violated with a probability of 60 percent).

At the second stage, the probability that the risk factor will change by a certain amount (probability of the second level) is determined. It is assumed that, as in the sensitivity analysis, each of the risk factors has five possible implementation scenarios. The final probability for each risk factor is obtained by multiplying the probability of the first and second level.

Scenario design. Analysis of project development scenarios allows assessing the impact on the project of a possible simultaneous change in several risk factors. It can be performed both using spreadsheets (for example, MS Excel), and using special computer programs.

Scenario analysis involves the calculation of indicators such as standard deviation and coefficient of variation from an array of NPV values ​​obtained during sensitivity analysis. The standard deviation reflects the possible spread of NPV values ​​from the average (most likely) value. The coefficient of variation is a measure of risk per unit of return, so it can be used to compare different projects in terms of their risks.

Based on the results of scenario design, it is concluded how risky the project is and what is the expected loss of profitability in the event of a negative development of events.

It should be remembered that no methodology allows with a 100% guarantee to select projects that will be successful and profitable. Much depends on the reliability of the expert assessment, so the entrepreneur needs to be very careful in the selection of experts.

7.1. Basic concepts

Risk and uncertainty

Decision-making processes in project management occur, as a rule, in the presence of one or another measure of uncertainty, determined by the following factors:

incomplete knowledge of all parameters, circumstances, situations for choosing the optimal solution, as well as the impossibility of adequate and accurate accounting of all even available information and the presence of probabilistic characteristics of the behavior of the environment;

the presence of a random factor, i.e., the implementation of factors that cannot be foreseen and predicted even in a probabilistic implementation;

the presence of subjective factors of opposition, when decision-making takes place in a situation where partners play with opposite or non-coinciding interests.

Thus, the project is being implemented in conditions of uncertainty and risks, and these two categories are interrelated.

Uncertainty in a broad sense is the incompleteness or inaccuracy of information about the conditions for the implementation of the project, including the costs and results associated with them.

Risk- potential, numerically measurable possibility of unfavorable situations and related consequences in the form of losses, damages, losses, for example - expected profit, income or property, cash in connection with uncertainty that is, with an accidental change in the conditions of economic activity, unfavorable, including force majeure circumstances, a general drop in prices in the market; the possibility of obtaining an unpredictable result depending on the economic decision or action taken.

Let's take a closer look at the concept probability of risks - the probability that as a result of the decision there will be losses for the entrepreneurial firm, that is, the probability of an undesirable outcome. There are two methods for determining the probability of undesirable events: objective and subjective. The objective method is based on calculating the frequency with which one or another result was obtained under similar conditions. Subjective probability is a guess about a particular outcome. This method of determining the probability of an undesirable outcome is based on the judgment and personal experience of the entrepreneur. In this case, in accordance with past experience and intuition, the entrepreneur needs to make a numerical assumption about the likelihood of events.

Risk measurement- determination of the probability of occurrence of a risk event. When evaluating the risks that the project team and the project investor are able to take on during its implementation, they proceed primarily from the specifics and importance of the project, from the availability of the necessary resources for its implementation and the possibilities of financing the likely consequences of risks. The degree of acceptable risks, as a rule, is determined taking into account such parameters as the size and reliability of investments in the project, the planned level of profitability, etc.

Quantitatively uncertainty implies the possibility of a deviation of the result from the expected (or average) value, both up and down. Accordingly, it is possible to clarify the concept of risk - this is the probability of losing part of the resources, shortfall in income or the appearance of additional costs, and (or) the opposite - the possibility of obtaining significant benefits (income) as a result of the implementation of certain purposeful activities. Therefore, these two categories that affect the implementation of an investment project should be analyzed and evaluated jointly.

Thus, risk is an event that can occur under conditions of uncertainty with some probability, while three economic outcomes are possible (estimated in economic, most often financial indicators):

negative, i.e. damage, loss, loss;

positive, i.e. benefit, profit, gain;

zero (neither damage nor benefit).

The nature of uncertainty, risks and losses in the implementation of projects is primarily associated with the possibility of incurring financial losses due to the predictive, probabilistic nature of future cash flows and the implementation of the probabilistic aspects of the project and its many participants, resources, external and internal circumstances.

Management of risks

Project management implies not only a statement of the fact of the presence of uncertainty and risks and an analysis of risks and damages. Project risks can and should be managed. Management of risks - a set of methods for analyzing and neutralizing risk factors, combined into a system of planning, monitoring and corrective actions.

Risk management is a project management subsystem, the structure of the subsystem is presented below.

Management of risks:

Identification and identification of perceived risks;

Risk analysis and assessment;

Choice of risk management methods;

Application of selected methods and decision-making under risk conditions;

Response to the occurrence of a risk event;

Development and implementation of risk mitigation measures;

Monitoring, analysis and evaluation of actions to reduce risks and development of solutions.

Risk Management Methods

Development and implementation of risk management strategy

Risk compensation methods, including forecasting the external environment of the project, marketing projects and project products, monitoring the socio-economic and legal environment and creating a system of project reserves;

Methods of risk distribution, including the distribution of risks over time, the distribution of risks between participants, etc.;

Risk localization methods used for high-risk projects in a multi-project system, implying the creation of separate special units for the implementation of especially risky projects;

Methods of avoiding risks, including the rejection of risky projects and unreliable partners, risk insurance, the search for guarantors.

Identification and identification of perceived risks- systematic identification and classification of events that can adversely affect the project, i.e., in fact, the classification of risks.

Risk classification- a qualitative description of the risks on various grounds.

Risk Analysis - procedures for identifying risk factors and assessing their significance, in essence, an analysis of the likelihood that certain undesirable events will occur and adversely affect the achievement of project objectives. Risk analysis includes risk assessment and methods for reducing risks or reducing the adverse effects associated with them. At the first stage, the relevant factors are identified and their significance is assessed.

Risk assessment- this is a quantitative or qualitative determination of the magnitude (degree) of risks. A distinction should be made between qualitative and quantitative risk assessment.

Qualitative assessment can be relatively simple, its main task is to determine the possible types of risks, as well as factors affecting the level of risks when performing a certain type of activity.

Quantification risk is determined through:

a) the probability that the result obtained will be less than the required value (planned, planned, predicted);

b) the product of the expected damage by the probability that this damage will occur.

Risk assessment methods include the following:

Quantitative risk assessment using methods of mathematical statistics.

Methods of expert risk assessment.

Risk simulation methods.

Combined methods, which are a combination of several separate methods or their individual elements.

The sequence of work on risk analysis:

Selection of an experienced team of experts;

Preparation of a special questionnaire and meetings with experts;

Choice of risk analysis technique;

Establishment of risk factors and their significance;

Creation of a risk action mechanism model;

Establishing the relationship between individual risks and the cumulative effect of their impact;

Consideration of the results of risk analysis - usually in the form of a specially prepared report (report).

Risk Mitigation Methods include:

Distribution of risks between project participants;

Risk insurance;

Reservation.

Distribution (withdrawal, transfer, transfer) of risks - the act of transferring, in whole or in part, risks to another party, usually through some form of contract.

Risk insurance is a relationship to protect the property interests of individuals and legal entities in the event of certain events (insurance of events) at the expense of monetary funds formed from the insurance premiums (insurance premiums) paid by them.

Reservation- a method of reserving funds to cover damage, unforeseen expenses in the event of risk events.

7.2. Project risk analysis

Essence of project risk analysis

The analysis of project risks begins with their classification and identification, that is, with their qualitative description and determination of what types of risks are inherent in a particular project in a given environment under existing economic, political, and legal conditions.

Project risk analysis subdivided into qualitative(a description of all anticipated risks of the project, as well as a cost estimate of their consequences and mitigation measures) and quantitative(direct calculations of changes in project efficiency due to risks).

The analysis of project risks is based on risk assessments, which consist in determining the magnitude (degree) of risks. Methods for determining the criterion for quantitative risk assessment include:

statistical evaluation methods based on the methods of mathematical statistics, i.e. dispersion, standard deviation, coefficient of variation. To apply these methods, a sufficiently large amount of initial data and observations is required;

methods of expert assessments based on the use of expert knowledge in the process of project analysis and taking into account the influence of qualitative factors;

analogy methods based on the analysis of similar projects and the conditions for their implementation to calculate the probabilities of losses. These methods are used when there is a representative basis for analysis and other methods are unacceptable or less reliable, these methods are widely practiced in the West, since project management practice evaluates projects after their completion and accumulates significant material for subsequent use;

combined methods include the use of several methods at once.

Methods for constructing complex probability distributions (decision trees), analytical methods (sensitivity analysis, break-even point analysis, etc.), and scenario analysis are also used.

Risk analysis is the most important stage in the analysis of an investment project. As part of the analysis, the problem of reconciling two practically opposite aspirations is solved - whether maximizing and minimizing project risks.

The result of the risk analysis should be a special section of the business plan of the project, including a description of the risks, the mechanism of their interaction and the cumulative effect, measures to protect against risks, the interests of all parties in overcoming the danger of risks; assessment of the risk analysis procedures performed by the experts, as well as the initial data used by them; a description of the risk distribution structure between the project participants under the contract, indicating the stipulated compensation for losses, professional insurance payments, debt obligations, etc.; recommendations on those aspects of risks that require special measures or conditions in the insurance policy.

Qualitative risk analysis

One of the areas of investment project risk analysis is a qualitative analysis or risk identification.

A qualitative analysis of project risks is carried out at the stage of developing a business plan, and a mandatory comprehensive examination of an investment project allows preparing extensive information for analyzing its risks.

The first step in identifying risks is specifying the classification of risks in relation to the project being developed.

In risk theory, there are concepts factor a(the reasons), type of risk and type of loss(damage) from the occurrence of risky events.

Under factors(reasons) risks understand such unplanned events that can potentially come true and have a deflecting effect on the intended course of the project, or some conditions that cause uncertainty in the outcome of the situation. At the same time, some of these events could have been foreseen, while others could not have been predicted.

Type of risks - classification of risk events according to the same type of reasons for their occurrence.

Type of loss, damage- classification of results of realization of risk events.

Thus, it is possible to clarify the relationship between the main risk characteristics:

Risk Factors

Uncertainty in the implementation of factors and their unpredictability

Risk (risk event)

Losses (Damage)

Risk analysis is carried out in terms of:

origins, causes of this type of risks;

probable negative consequences caused by the possible realization of this risk;

specific predictable measures to minimize the risk under consideration.

The main results of a qualitative risk analysis are:

identification of specific risks of the project and their causes;

analysis and cost equivalent of the hypothetical consequences of the possible implementation of the noted risks;

proposal of measures to minimize damage and, finally, their cost estimate.

In addition, at this stage, the boundary values ​​(minimum and maximum) of a possible change in all factors (variables) of the project, checked for risks, are determined.

Quantitative risk analysis

The mathematical apparatus of risk analysis is based on the methods of probability theory, which is due to the probabilistic nature of uncertainty and risks. Tasks of quantitative risk analysis are divided into three types:

straight lines, in which the risk level is assessed on the basis of a priori known probabilistic information;

reverse, when an acceptable risk level is set and the values ​​(range of values) of the initial parameters are determined, taking into account the established restrictions on one or more variable initial parameters;

tasks of studying the sensitivity, stability of effective, criterion indicators in relation to the variation of the initial parameters (probability distribution, areas of change of certain values, etc.). This is necessary due to the inevitable inaccuracy of the initial information and reflects the degree of reliability of the results obtained in the analysis of project risks.

Quantitative analysis of project risks is carried out on the basis of mathematical models of decision-making and project behavior, the main of which are:

stochastic (probabilistic) models;

linguistic (descriptive) models;

non-stochastic (game, behavioral) models.

In table. 7.1 shows the characteristics of the most used risk analysis methods.

Table 7.1

	Method characteristic
Probabilistic analysis	It is assumed that the construction and calculations of the model are carried out in accordance with the principles of probability theory, while in the case of sampling methods, all this is done by calculations on samples risk ratio (the ratio of expected profit to the volume of all investments in the project)
Expert Risk Analysis	The method is used in the absence or insufficient amount of initial information and consists in attracting experts to assess risks. A selected group of experts evaluates the project and its individual processes according to the degree of risk
Analog method	Using a database of implemented similar projects to transfer their effectiveness to the project under development, this method is used if the internal and external environment of the project and its analogues has sufficient convergence in key parameters
Point level analysis	Determining the degree of sustainability of the project in relation to possible changes in the conditions for its implementation
project sensitivity	The method allows you to evaluate how the resulting indicators of the project implementation change with different values ​​of the given variables necessary for the calculation
Analysis of project development scenarios	The method involves the development of several options (scenarios) for the development of the project and their comparative assessment. The pessimistic variant (scenario) of a possible change in variables, the optimistic and the most probable variant are calculated
Method for constructing project decision trees	Assumes a step-by-step branching of the project implementation process with an assessment of risks, costs, damages and benefits
Simulation Methods	They are based on step-by-step finding of the value of the resulting indicator by conducting multiple experiments with the model. Their main advantages are the transparency of all calculations, the ease of perception and evaluation of the results of the project analysis by all participants in the planning process. As one of the serious disadvantages of this method, it is necessary to indicate the significant costs of calculations associated with a large amount of output information.

7.3. Risk Mitigation Methods

All methods to minimize project risks can be divided into three groups:

1. Diversification, or risk sharing(the distribution of the efforts of the enterprise between activities, the results of which are not directly related to each other), which allows to distribute the risks between the project participants. The distribution of project risks among its participants is an effective way to reduce it. Reliability theory shows that with an increase in the number of parallel links in the system, the probability of failure in it decreases in proportion to the number of such links. Therefore, the distribution of risks between the participants increases the reliability of achieving the result. In this case, it is most logical to make responsible for a specific type of risk one of its participants who has the ability to more accurately and better calculate and control this risk. The distribution of risks is formalized during the development of the financial plan of the project and contract documents.

Risk allocation is actually implemented in the process of preparing the project plan and contract documents. It should be borne in mind that an increase in risk for one of the participants must be accompanied by an adequate change in the distribution of project revenues. Therefore, when negotiating it is necessary:

determine the capabilities of project participants to prevent the consequences of the occurrence of risk events;

determine the degree of risk that each project participant undertakes;

agree on an acceptable reward for risks;

monitor compliance with parity in the ratio of risks and income between all project participants.

2.Reservation of funds Contingency is a risk management strategy that balances the potential risks that affect the cost of a project against the costs required to overcome project disruptions.

The value of the reserve must be equal to or greater than the value of fluctuations in system parameters over time. In this case, the costs of reserves should always be lower than the costs (losses) associated with failure recovery. Foreign experience allows an increase in the cost of the project from 7 to 12% due to the reservation of funds for force majeure. Reservation of funds provides for the establishment of a relationship between potential risks that change the cost of the project, and the amount of costs associated with overcoming violations during its implementation.

Table 7.2. Contingency reserve provisions

Cost type	Change in contingencies,%
Costs / duration of work of Russian contractors
Costs / duration of work of foreign contractors
Increase in direct production costs
Decrease in production
Increasing interest on a loan

Minimizing risks always increases project costs, but it also increases project profits.

Part of the reserve should always be at the disposal of the project manager (the rest of the reserve is managed, in accordance with the contract, by other project participants).

A necessary condition for the success of the project is the excess of the estimated income from the implementation of the project over the cash outflows at each calculation step. With the aim of reduce risks in terms of financing it is necessary to create a sufficient margin of safety, taking into account the following types of risks:

risk of construction in progress (additional costs and lack of income planned for this period);

the risk of a temporary decrease in the volume of sales of the project's products;

tax risk (inability to use tax incentives and benefits, changes in tax legislation);

the risk of late payment of debts by customers.

When calculating risks, it is necessary that the balance of accumulated real money in the financial plan of the project at each calculation step be at least 8% of the costs planned at this step. In addition, it is necessary to provide additional sources of financing for the project and the creation of reserve funds with the deduction of a certain percentage from the proceeds from the sale of products.

3.Risk insurance. If the project participants are not able to ensure the implementation of the project in the event of a risk event on their own, it is necessary to carry out risk insurance. Risk insurance is, in essence, the transfer of certain risks to an insurance company.

Foreign practice of insurance uses full insurance of investment projects. The conditions of Russian reality allow so far only partially insure project risks: buildings, equipment, personnel, some extreme situations, etc.;

Choosing a rational insurance scheme is a rather difficult task. Consider the main provisions of this method of reducing risks.

Rosstrakhnadzor Order No. 02-02/08 dated May 19, 1994 approved the Classification by type of insurance activity, which provides for insurance of financial risks by an agreement providing for the insurer's obligations for insurance payments in the amount of full or partial compensation for loss of income (additional expenses) of a person caused by the following events :

stoppage of production or reduction in production as a result of specified events;

job loss (for individuals);

bankruptcy;

unexpected expenses;

non-performance (improper performance) of contractual obligations by the counterparty of the insured person who is the creditor under the transaction;

court costs (expenses) incurred by the insured person;

other events.

The concept of entrepreneurial risk has been introduced in the legislation of the Russian Federation. Business risk insurance involves the conclusion of a property insurance contract, under which one party (the insurer) undertakes, for the fee stipulated by the contract (insurance premium), upon the occurrence of an event (insurance event) provided for in the contract, to compensate the other party (the insured) or another person in whose favor the contract is concluded (to the beneficiary), losses caused as a result of this event in the insured property or losses in connection with other property interests of the insured (to pay insurance compensation) within the amount specified by the contract (sum insured).

Under a property insurance contract, in particular, the following property interests may be insured:

risk of loss (destruction), shortage or damage to certain property;

the risk of liability for obligations arising from causing harm to life, health or property of other persons, and in cases provided for by law, also liability under contracts - the risk of civil liability;

the risk of losses from entrepreneurial activities due to a breach of their obligations by the counterparties of the entrepreneur or changes in the conditions of this activity due to circumstances beyond the control of the entrepreneur, including the risk of not receiving the expected income - entrepreneurial risk.

When concluding a business risk insurance contract, the insurer has the right to analyze the risks, and, if necessary, appoint an examination.

When insuring business risk, unless otherwise provided by the insurance contract, the sum insured must not exceed the business losses that the insured would be expected to incur in the event of an insured event.

For real investments there is insurance and not only against financial losses. A construction contract may provide for the obligation of the party, which bears the risk of accidental loss or accidental damage to the construction object, material, equipment and other property used in construction, or liability for causing damage to other persons during construction, to insure the corresponding risks.

Deductions for business risk insurance can be included in the cost of production. So, the cost of products (works, services) includes: payments (insurance premiums) for voluntary insurance of means of transport (water, air, land), property, civil liability of organizations - sources of increased danger, civil liability of carriers, professional liability, voluntary insurance from accidents and illnesses, as well as health insurance.

It is allowed to create insurance reserves or insurance funds for all enterprises and organizations to finance expenses caused by entrepreneurial and other risks, as well as those related to insurance of property, life of employees and civil liability for causing damage to the property interests of third parties. A limit on deductions for these purposes has also been established: it cannot exceed one percent of the volume of products (works, services) sold.

Effectiveness of risk mitigation methods is determined using the following algorithm:

the risk that is of greatest importance to the project is considered;

overspending is determined taking into account the probability of an adverse event;

a list of possible measures aimed at reducing the likelihood and danger of a risk event is determined;

additional costs for the implementation of the proposed measures are determined;

the required costs for the implementation of the proposed measures are compared with the possible cost overrun due to the occurrence of a risk event;

a decision is made on the implementation or refusal of anti-risk measures;

the process of comparing the likelihood and consequences of risk events with the costs of mitigation measures is repeated for the next most important risk.

7.4. Organization of work on risk management

A comprehensive study of various risks at the project development stage using the system of approaches and methods presented in the previous sections is undertaken not only for the purpose of analyzing project risks at the beginning of the project life cycle. The conclusions drawn on the basis of such a study provide significant assistance to the project manager at the stage of its implementation, since the analysis of project risks should not be limited only to a statement of the fact of their presence and a settlement and recommendation conclusion at the stage of developing a project business plan. Mandatory continuation and development of the analysis of project risks is their management at the stage of implementation and operation of the project.

Risk management is a specific area of ​​management that requires knowledge in the field of company theory, insurance business, analysis of the economic activity of an enterprise, mathematical methods for optimizing economic problems, etc.

The risk management system is a special type of activity aimed at mitigating the impact of risks on the final results of the project. Risk management is a new phenomenon for the Russian economy, which appeared during the transition of the economy to a market economy system.

Risk management is carried out at all phases of the project life cycle through monitoring, control and necessary corrective actions.

The risk management process involves the implementation of certain steps, including:

identification of perceived risks;

analysis and assessment of project risks;

choice of risk management methods;

application of selected methods;

evaluation of risk management results.

Risk analysis of an investment project involves an approach to risk not as a static, unchanging, but as a controlled parameter, the level of which can and should be influenced. This leads to the conclusion that it is necessary to influence the identified risks in order to minimize or compensate them. The so-called concept of acceptable risk is aimed at exploring these possibilities and the associated methodology.

The concept of acceptable risk is based on the assertion that it is impossible to completely eliminate potential causes that may lead to an undesirable development of events and, as a result, to a deviation from the chosen goal. However, the process of achieving the chosen goal can take place on the basis of making such decisions that provide a certain compromise level of risk, called acceptable. This level corresponds to a certain balance between the expected benefit and the threat of losses and is based on serious analytical work, including special calculations.

As applied to investment design, the concept of acceptable risk is implemented through the integration of a set of procedures - project risk assessment and project risk management.

Describing in general the entire arsenal of project risk management methods, it is necessary to emphasize their specific practical orientation, which allows not only to select and rank risk factors, but also to model the project implementation process, assess with a certain probability the consequences of adverse situations, select methods to minimize their impact or propose risk-compensating measures, monitor the dynamics of the behavior of the actual parameters of the project during its implementation, and, finally, correct their change in the right direction. The goal of project risk management not only contributes to the deepening of project analysis, but also improves the efficiency of investment decisions. The role of the main performer of all procedures related to risk management falls on the shoulders of the project manager (administrator) or the team with his participation.

Project risk management methods can and should become a means of effective implementation of the projects themselves at all levels of government - federal, regional and local.