Last Updated: June 27, 2024

Activity 9 - Evaluate Risk

Activity Page Outline

Application 1 - Evaluate Risk Workflow (25 minutes)

Learn the Evaluate Risk Workflow (10 minutes)

Update Journal on Evaluate Risk Workflow (15 minutes) jump to

Application 2 - Complete Evaluate Risk Exercises (1 hour 25 minutes) jump to

Exercise 1: Perform Project Level Risk Evaluation (30 minutes) jump to

Exercise 2: Insert Risk Questions (40 minutes) jump to

Update Journal on Evaluate Risk (15 minutes) jump to

There are two applications on the page. Complete each when directed in the MS Project Master Class Book.

This entire page should take 2 hours and 36 minutes to complete.

Evaluate Risk Workflow (25 minutes)

A workflow is a set of sequential or parallel processes or steps performed to complete a specific Activity in a project life cycle. It typically involves a series of interdependent tasks that must be completed in a particular sequence, often with specific criteria or conditions that must be met before moving on to the next step. The workflow for each Activity in this MS Project Master Class is the Activity (chapter) outline.

Learn Evaluate Risk Workflow (10 minutes)

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Complete Evaluate Risk Exercises (1 hour 25 minutes)

Qualitative risk management typically involves a qualitative risk assessment, identifying and analyzing risks based on subjective judgments and qualitative data. This can include techniques such as brainstorming, expert opinion, and risk rating scales. The assessment results can then be used to develop risk mitigation strategies and prioritize risk management efforts.

This application will review where you might apply qualitative risk evaluation in Microsoft Project. We will also review Object Linking and Embedding (OLE), recording a Macro (module), and making that module available to any opened project by moving it to the Global.mpt file and then adding the macro to a command on the ribbon.

Exercise 1: Perform Project Level Risk Evaluation (30 minutes)

In this first exercise, you will open the Risk Evaluation Worksheet.xlsx file and complete the entire evaluation for one likely risk that you think would seriously impact the project if it were to occur.

When evaluating risk at the project level, we are concerned about risks that could impact the primary project constraints, such as the scope, timing, cost, and work. As in the following figure, select a risk requiring contingent and management responses.

When finished, you should realize that attaching this file using the OLE features is the best way to manage it.

First, open your Master Project.mpp file.

Next, use the OLE feature to embed the Risk Evaluation workbook (Risk Evaluation Workbook.xlsx) downloaded above in the project summary task. Edit the inserted object and evaluate three risks to the project’s objectives and constraints.

To embed the Risk Evaluation Workbook.xlsx at the summary level:

• Open the Notes field for the project summary task.

• Click the Insert Object button.

• Select the Create from File radio button.

• Don’t select the Link button when you want to embed the object.

• Check the Display As Icon checkbox.

• Click OK.

Figure 9.8 Changing the icon label for an OLE attachment.

When displaying an OLE attachment, click the Change Icon button to enter a custom label.

Once the object has been embedded, double-click on the icon to review or edit. In this case, the object is opened in Excel.

Project Example

We have all heard of people self-insuring. Self-insuring is a risk management technique in which a company or individual saves money to remedy an unexpected loss. Theoretically, one can self-insure against damage (like flood, fire, injury, or earthquake). However, most people purchase insurance against potentially significant, infrequent losses.

The thinking behind self-insure is that since insurance companies aim to profit by charging premiums over expected losses, a self-insured person should be able to save money by simply setting aside the money that would have been paid as insurance premiums. But it is critical to amass and put aside enough funds to cover you, your family, and your possessions if an accident or natural catastrophe occurs.

There are some faulty assumptions behind self-insuring, but we all self-insure to some extent. For instance, if we have an older vehicle, we might buy liability insurance but not collision insurance. But one thing seems inevitable: most self-insured people are likely more concerned with preventing a risk from occurring than paying should the risk occur.

I once visited the most famous James Madison home, Montpelier, in Orange County, Virginia. Montpelier was initially built in 1764 by Madison's father, James Madison Sr., but it was significantly expanded and renovated by Madison himself throughout his lifetime.

James Madison, the fourth President of the United States, was an early proponent of insurance to protect property and mitigate risk. Madison recognized the importance of insurance in promoting economic growth and stability and played an active role in developing the insurance industry in the United States.

In 1794, Madison helped to found the Mutual Assurance Society of Virginia, one of the first insurance companies in the United States. The society provided fire insurance to homeowners and businesses in Virginia, and it quickly became a model for other mutual insurance companies throughout the country.

Madison believed that insurance was essential for promoting economic growth and stability. He saw it as a way to protect property owners from financial losses due to disasters like fires and floods. He also recognized that insurance could help reduce the burden on the government in the aftermath of disasters, as insured property owners would recover more quickly and would be less likely to require government assistance.

Madison's advocacy for insurance helped pave the way for the modern insurance industry in the United States, which is now one of the world's largest and most complex industries. Today, insurance protects individuals and businesses against a wide range of risks, from property damage to liability claims, and it plays a critical role in promoting economic growth and stability.

According to my tour guide, one of Madison's most interesting architectural innovations was moving the cook house from its original location into the main house at his estate, Montpelier, and converting it into a kitchen.

The cook house at Montpelier was a small building located a short distance from the main house. It contained the kitchen, living quarters for enslaved people who worked in the kitchen, and other domestic positions at the estate.

After purchasing home insurance and a contingent management plan in the case of fire and other disasters, Madison moved the cookhouse into the main house, creating a more centralized and convenient location for food preparation. This was a significant undertaking, as it required the construction of a new kitchen and installing complex ventilation systems to ensure that smoke and fumes from the kitchen did not spread throughout the house.

Despite the challenges, Madison's decision to move the cook house into the main house was innovative and helped transform how homes were designed and built. By bringing the kitchen closer to the main living areas, Madison created a more functional and efficient living space that was better suited to the needs of his family and guests.

Regardless of who might pay for the consequences of risk events that could damage our vehicles, homes, and businesses, it is better to prevent risk events from happening or limit the impact of risks should they occur. This is undoubtedly the case when we evaluate risk on the project level.

However, on the detail level, when there is a significant variance between estimates of work and cost, it suggests that we have not mitigated risk well. That realization leads to the 1) opportunity to protect a project, task by task, by taking steps to identify and mitigate risk, and 2) reducing the duration and cost of the project incrementally by mitigating the risk. The intent of this mitigation is to lower the calculated expected duration and cost estimates by lowering the pessimistic estimates.

In summary, on the project level, the intent is to prevent risk or mitigate the damage if the risk should occur. On the detail level, the intent might be to incrementally reduce the duration and cost of the project by moving each detailed task from the expected duration and cost estimates toward the optimistic estimates.

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Exercise 2: Insert Risk Questions (40 minutes)

As mentioned, most people perform risk evaluation on the project level if they do anything at all.

However, suppose you have a project with 1,200 tasks, and you have identified 75 critical tasks that you would like to address from a qualitative risk perspective because there is a substantial variance between the expected and pessimistic durations, suggesting risk (uncertainty) can be mitigated to shorten the duration of the project. You could type in these questions for each task to get started, but that would be like typing in 75 paragraphs, so at minimum, you would copy and then paste each set of questions into each of the 75 tasks. Still better; if you plan on using these questions on future projects, creating a macro and attaching it to a command on the ribbon or quick access toolbar would be worth the time.

This exercise uses the widely used qualitative risk questions at the project level and for detailed tasks. In Microsoft Project, you will use Visual Basic for Applications to automate these questions in your Master Project. Then, the Organizer and Ribbon feature in Microsoft Project will be used to make the automation available to all projects you might open and to make it easier to apply the macro.

Using your Master Project.mpp file, you could add (copy and paste) these qualitative questions to the task Notes field for the project summary task.

1.     For this activity, what is a risk?

2.     What is the cause of this risk? Is the cause controllable?

3.     How likely is this risk to occur?

    5 = Very High, 4 = High, 3 = Moderate, 2 = Low, 1 = Very Low

4.     What is the impact of this risk on this activity?

    5 = Very High, 4 = High, 3 = Moderate, 2 = Low, 1 = Very Low

5.     What is the early warning for the contingency action?

6.     What is the management action to mitigate the risk? 

7.     What contingent action will be taken if the risk occurs? 

If you wanted to use these questions with other projects, you could automate this activity more by:

1. Recording a macro

2. Copying the macro to the Global.MPT file

3. Attaching the macro as a command to the Quick Access Toolbar or the Ribbon.

Recording a Macro

Using this same Master Project.mpp file, select any task, select View on the ribbon, then Macros, and Record Macros. We will not type in all these risk questions but will start the process.

Store the macro in This Project. As mentioned, I typically move custom elements like views, tables, and macros to the Global.MPT when they are finished, so in Options, I do not allow these elements to be automatically saved to the Global.mpt.

Don't worry about the Macro name, but remember the name listed. It may not be Macro 1, as shown in the figure above.

Then Click OK.

You are now recording keystrokes.

Next, we will record adding some text to Task Notes. Select Task on the ribbon and then the Task Notes command. In the Notes field, type in The journey of a thousand miles begins with one step. When finished, click OK. 

Stop recording the maco by selecting View on the ribbon, the Macros command, then Stop Recording.

If your macro is working correctly, the text is automatically added to task Notes,

Once your macro works correctly, click on the Macros command again to view the maco, then click the Edit button.

The Edit command opens the macro, or module, in the Visual Basic for Applications (VBA) Editor. In the Project window find the project you recorded the macro and expand the Modules folder.

You could easily change the text by editing the module, saving the project, or clicking the save button in the VBA Editor.

If you open VBA and do not see your project, click View on the VBA menu and select the Project Explorer and then Code to open those two windows.

Next, we will edit this macro's code and add all the risk questions. I have a shortcut, so you don't have to take the time to type in this information correctly.

First, open the Sub InsertRiskQuestion document, copy all of the text, and then paste it into your macro, replacing all of the text. The actual text that is inserted by the macro is highlighted in yellow so that you can easily edit any of the text if desired.

The macro is now called InsertRiskQuestion. In VBA, macro or module names can not have spaces.

Close the VBA Editor and then select a task in Microsoft Project and run the macro.

When you know the macro is running correctly, save the project, which will save the macro since it is currently associated with the project.

If this is a macro you want to keep and use frequently with your other projects, you can do these three things:

1. Give the macro a unique name

2. Copy the macro to the Global.MPT

3. Attach the micro to a command on the ribbon.

We are going to walk through these steps, so open the Organizer and click the Rename button give the macro the name InsertRiskQuestions and then copy the macro to the Global.MPT.

We have used the Organizer several times, so you should be able to do that without detailed instructions.

To attach the macro that was just copied to the Global.MPT to the Ribbon, do the following:

• Open Project Options.

• Select Customize Ribbon.

• C - Select Macros.

• D - Say we want to attach this macro to the Project tab; expand the Project tab.

• E - Add a new group at the end of the Project tab by clicking on the New Group button. Name the group Risk.

• F - Select the InsertRiskQuestions macro from the Global.MPT, not the project file.

• G - Add the macro to the Risk group on the Project tab

• H - Rename the macro by selecting the macro and clicking the Rename button

• I - Select the symbol shown in the figure below

• J - Rename the macro as it appears on the Ribbon. Give the macro any name you want.

Finally, test the macro by selecting a task and clicking on the command.

When finished, save the project.

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Review Microsoft Project Features Covered on Evaluate Risk (15 minutes)

OLE

OLE (Object Linking and Embedding) is a technology used by Microsoft Project to allow users to link or embed data from other applications, such as Microsoft Excel, Word, or PowerPoint, into their project files.

With OLE, users can insert charts, tables, or graphs created in Excel or Word into their project files and update them as necessary without leaving the project application. This gives users a more comprehensive view of their project data and simplifies sharing information across different software applications.

Linking involves linking the inserted object and the source file. The linked object remains a separate entity within the project file, and any changes made to the source file are automatically reflected in the linked object. This means the user can update the information in the source file, and the linked object will also be updated in the project file.

Embedding, on the other hand, involves inserting the object directly into the project file. The embedded object becomes a part of the project file and is no longer linked to the source file. Any changes made to the source file will not be reflected in the embedded object in the project file. The user must manually update the object after opening the project and making the necessary changes.

Overall, OLE in Microsoft Project allows for the seamless integration of data and information from different software applications, enabling users to create more dynamic and interactive project files.

Steps

To use OLE (Object Linking and Embedding) in Microsoft Project, follow these steps:

1. Select a task you want to embed or link an object like a Word document or Excel worksheet.

2. Do not click on the Project tab; instead, click on the Insert Object (OLE) command. This command is for inserting an OLE into the Object field for a particular task or resource. This feature has yet to work well for several of the past versions of Microsoft Project. We recommend using the OLE feature in the Notes field for a task or resource. 

3. Double-click on the task you want to add a note to open the Task Information dialog box.

4. Click on the Notes tab in the Task Information dialog box.

5. Click on the Insert Object button in the Notes section of the dialog box.

6. You can insert an Excel Worksheet or Word Document by selecting the Object Type drop-down menu.

7. A new dialog box will appear, allowing you to create a new object or insert an existing one. Choose the appropriate option.

8. If you insert an existing object, you must first navigate to the file you want to insert, select it, and click the Insert button.

9. If you create a new object, a window will appear with the application you chose (such as Excel or Word) open, allowing you to create or edit the object.

10. Once the object is inserted or created, it will be displayed in the task notes.

11. To link the object to the source file, right-click on the object, select Linked Worksheet/Object, and then choose the appropriate source file.

12. To embed the object, insert it into the task notes without linking it to a source file.

That's it! With OLE, you can easily integrate data and information from other applications into your task notes in Microsoft Project.

Macros

Macros in Microsoft Project is a powerful tool that allows you to automate repetitive tasks, perform complex calculations, and customize how the software works. A macro is a set of instructions you can create and save in a specific project or in Microsoft Project that automates a series of actions in the software.

Some common uses of macros in Microsoft Project include automating the creation of new projects, updating task durations and dependencies, generating custom reports, and exporting data to other software applications. 

Macros can also customize the user interface, add new functionality, and extend the software's capabilities beyond what is available.

Steps

1. Open Microsoft Project and create a new project or open an existing project.

2. Click on the "View" tab in the ribbon and select the Macro command.

3. In the "Macro" dialog box, give your macro a name, such as "Insert Risk Questions," and click "Create."

4. This will open the Visual Basic Editor. In the editor, you can write the code for your macro. The code will consist of a series of commands that tell Project what to do.

Here's an example of VBA code you can use to insert risk evaluation questions into the Notes field for a selected task in Microsoft Project:Sub InsertRiskQuestionsForTask() 

Sub InsertRiskQuestionsForSelectedTask()

    Dim t As Task

    Set t = ActiveSelection.Tasks(1) 'get the first selected Task

    If Not t Is Nothing Then

        t.Notes = t.Notes & vbCrLf & "What are the potential risks associated with this task?" & vbCrLf & "What can be done to mitigate those risks?"

    End If

End Sub

In this example, the code uses the ActiveSelection object to get the currently selected tasks in the active view. It then selects the first Task in the selection using the Tasks(1) property. Finally, it checks to ensure the Task was found and, if so, appends the risk evaluation questions to the end of the Task's Notes field using the Notes property.

Again, you can customize the text of the risk evaluation questions to fit your specific needs. If you want to add these questions to a different field, such as a custom field, you can modify the code to reference that field instead.

You could modify the code to loop through all selected tasks to add the risk evaluation questions. The code for a loop would be: 

Sub InsertRiskQuestions()

    Dim t As Task

    For Each t In ActiveProject.Tasks

        If Not t Is Nothing Then

            t.Notes = t.Notes & vbCrLf & "What are the potential risks associated with this task?" & vbCrLf & "What can be done to mitigate those risks?"

        End If

    Next t

End Sub

To run a macro in Microsoft Project: 

1. Click on the "Macros" dropdown menu and select "View Macros."

2. In the "Macro" dialog box, you will see a list of all the macros created for this project. Select the macro you want to run and click "Run."

3. Alternatively, you can run a macro by using a keyboard shortcut. Press Alt + F8 to open the "Macro" dialog box, select the macro you want to run, and click "Run."

4. The macro will execute and perform the actions you programmed it to do. Depending on the complexity of the macro and the size of your project file, it may take a few moments to complete.

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