11. Project risk management

Question 1

How is risk management defined?

Answer 1

Increase the probability of opportunities (positive risk) while decreasing the probability of threats (negative risk)

Question 2

What are the six sequential risk management processes and their corresponding process groups?

Answer 2

1. Plan risk management (planning)
2. Identify risks (planning)
3. Perform qualitative risk analysis (planning)
4. Perform quantitative risk analysis (planning)
5. Plan risk responses (planning)
6. Control risks (monitoring and controlling)

Question 3

Who should be involved in risk identification?

Answer 3

Everyone!

Question 4

What is delphi technique, what is root cause analysis?

Answer 4

Delphi technique: Request for information is sent to experts, responses are complied and sent back for further review. DT is used to achieve consensus among experts participating anonymously.

Root cause analysis: Identified risks are reorganized by their root causes to help identify more risks.

Question 5

What is is included in the risk register during each risk management processes?

Answer 5

Plan: does not exist yet

Identify risks: list of risks, list of potential responses

Qualitative: risk ranking, groupings by category, etc.

Quantitative: prioritized risks, initial contingency reserves in terms of time and cost, etc.

Responses: Residual risks, contingency and fallback plans, secondary risks, etc.

Question 6

What is done in perform qualitative risk analysis?

Answer 6

Determination of the probability (Low, Medium, High or 1-10) and the impact using a standard scale.

Qualitative analysis is subjective!

Question 7

What is done during risk data quality assessment

Answer 7

One answers the question “how accurate and well understood is the risk information?”

Question 8

List three response strategies for risks and opportunities!

Answer 8

Risks

• Avoid: Eliminate risk by eliminating the cause
• Mitigate: Reduce probability/impact of the risk
• Transfer (deflect/allocate): Make another party responsible for the risk (insurance or outsourcing)

Opportunities

• Exploit
• Enhance
• Share

Valid for both: accept (must be communicated to stakeholders)

Question 9

What are residual risks, secondary risks and fallback plans?

Answer 9

Residual risk: Risks that remain after risk response planning is done (passively accepted)

Secondary risk: Risks created by the implementation of a risk response

Fallback plan: Plans for actions if contingency plans are not effective

Question 10

What are risk audits and reserve analysis?

Answer 10

Risk audit: Audits to assess risk management processes and risk responses

Reserve analysis: Checking to seee how much reserve might be needed

Question 11

What is the difference between contigency and management reserve and what is contingency used for?

Answer 11

Contigency: Part of cost baseline, may only be used to handle impact of specific risk it was set aside for

Management: Reserve for unknown risks.