11. Project Risk Management

Question 1

Define the following knowledge area: Project Risk Management.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 1

Includes the processes of conducting risk management planning, identification, analysis, response planning, response implementation, and monitoring risk on a project.

11. 1 Plan Risk Management
12. 2 Identify Risks
13. 3 Perform Qualitative Risk Analysis
14. 4 Perform Quantitative Risk Analysis
15. 5 Plan Risk Responses
16. 6 Implement Risk Responses
17. 7 Monitor Risks
    * PMBOK Guide, Sixth Edition, 11 - Project Risk Management, p. 395*

Question 2

Define the following process: Plan Risk Management.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 2

The process of defining how to conduct risk management activities for a project.

PMBOK Guide, Sixth Edition, 11.1 - Plan Risk Management, p. 401

Question 3

Define the following process: Identify Risks.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 3

The process of identifying individual project risks as well as sources of overall project risk, and documenting their characteristics.

PMBOK Guide, Sixth Edition, 11.2 - Identify Risks, p. 409

Question 4

Define the following process: Perform Qualitative Risk Analysis.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 4

The process of prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact as well as other characteristics.

PMBOK Guide, Sixth Edition, 11.3 - Perform Qualitative Risk Analysis, p. 419

Question 5

Define the following process: Plan Risk Responses.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 5

The process of developing options, selecting strategies, and agreeing on actions to address overall project risk exposure, as well as to treat individual project risks.

PMBOK Guide, Sixth Edition, 11.5 - Plan Risk Responses, p. 437

Question 6

Define the following process: Implement Risk Responses.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 6

The process of implementing risk response plans.

PMBOK Guide, Sixth Edition, 11.6 - Implement Risk Responses, p. 449

Question 7

Define the following process: Perform Quantitative Risk Analysis.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 7

The process of numerically analyzing the combined effect of identified individual project risks and other sources of uncertainty on overall project objectives.

PMBOK Guide, Sixth Edition, 11.4 - Perform Quantitative Risk Analysis, p. 428

Question 8

Define the following process: Monitor Risks.

11.1 Understand the seven project management processes in the project risk management knowledge area

Answer 8

The process of monitoring the implementation of agreed-upon risk response plans, tracking identified risks, identifying and analyzing new risks, and evaluating risk process effectiveness throughout the project.

PMBOK Guide, Sixth Edition, 11.7 - Monitor Risks, p. 453

Question 9

Identify the inputs, tools, techniques, and outputs of the following process: Plan Risk Management.

11.2 Identify the input, tools, techniques, and outputs defined in the seven project risk management processes

Answer 9

PMBOK Guide, Sixth Edition, Figure 11-2. Plan Risk Management: Inputs, Tools & Techniques, and Outputs, p. 401

Question 10

Identify the inputs, tools, techniques, and outputs of the following process: Identify Risks.

11.2 Identify the input, tools, techniques, and outputs defined in the seven project risk management processes

Answer 10

PMBOK Guide, Sixth Edition, Figure 11-6. Identify Risks: Inputs, Tools & Techniques, and Outputs, p. 409

Question 11

Identify the inputs, tools, techniques, and outputs of the following process: Perform Qualitative Risk Analysis.

11.2 Identify the input, tools, techniques, and outputs defined in the seven project risk management processes

Answer 11

PMBOK Guide, Sixth Edition, Figure 11-8. Perform Qualitative Risk Analysis: Inputs, Tools & Techniques, and Outputs, p. 419

Question 12

Identify the inputs, tools, techniques, and outputs of the following process: Perform Quantitative Risk Analysis.

11.2 Identify the input, tools, techniques, and outputs defined in the seven project risk management processes

Answer 12

PMBOK Guide, Sixth Edition, Figure 11-11. Perform Quantitative Risk Analysis: Inputs, Tools & Techniques, and Outputs, p. 428

Question 13

Identify the inputs, tools, techniques, and outputs of the following process: Plan Risk Responses.

11.2 Identify the input, tools, techniques, and outputs defined in the seven project risk management processes

Answer 13

PMBOK Guide, Sixth Edition, Figure 11-16. Plan Risk Responses: Inputs, Tools & Techniques, and Outputs, p. 437

Question 14

Identify the inputs, tools, techniques, and outputs of the following process: Implement Risk Responses.

11.2 Identify the input, tools, techniques, and outputs defined in the seven project risk management processes

Answer 14

PMBOK Guide, Sixth Edition, Figure 11-18. Implement Risk Responses: Inputs, Tools & Techniques, and Outputs, p. 449

Question 15

Identify the inputs, tools, techniques, and outputs of the following process: Monitor Risks.

11.2 Identify the input, tools, techniques, and outputs defined in the seven project risk management processes

Answer 15

PMBOK Guide, Sixth Edition, Figure 11-20. Monitor Risks: Inputs, Tools & Techniques, and Outputs, p. 453

Question 16

Identify the key documents in project risk management.

11.3 Identify the key documents in project risk management

Answer 16

• Risk management plan (a component of the project management plan that describes how risk management activities will be structured and performed)
  
  • Risk strategy
  • Methodology
  • Roles and responsibilities
  • Funding
  • Timing
  • Risk categories
  • Stakeholder risk appetite
  • Definitions of risk probability and impacts
  • Probability and impact matrix
  • Reporting formats
  • Tracking
• Risk register (captures details of identified individual project risks)
  
  • List of identified risks
  • Potential risk owners
  • List of potential risk responses
• Risk report (presents information on sources of overall project risk, together with summary information on identified individual project risks)
  
  • Sources of overall project risk
  • Summary information on identified individual project risks

PMBOK Guide, Sixth Edition,

• 11.1.3.1 - Risk Management Plan, p. 405
• 11.2.3.1 - Risk Register, p. 417
• 11.2.3.2 - Risk Report, p. 418

Question 17

Identify tailoring considerations for Project Risk Management.

11.5 Recognize when and how to adjust risk based on the project environment

Answer 17

• Project size. Does the project’s size in terms of budget, duration, scope, or team size require a more detailed approch to risk management? Or is it small enough to justify a simplified risk process?
• Project complexity. Is a robust risk approach demanded by high levels of innovation, new technology, commerical arrangements, interfaces, or external dependencies that increase project complexity? Or is the project simple enough that a reduced risk process will suffice?
• Project importance. How strategically important is the project? Is the level of risk increased for this project because it aims to produce breakthrough opportunities, addresses significant blocks to organizational performance, or involves major product innovation?
• Development approach. Is this a waterfall project, where risk processes can be followed sequentially and iteratively, or does the project follow an agile approach where risk is addressed at the start of each iteration as well as during its execution?

PMBOK Guide, Sixth Edition, 11 - Project Risk Management, p. 400

Question 18

Identify special considerations for Project Risk Management for agile/adaptive environments.

11.5 Recognize when and how to adjust risk based on the project environment

Answer 18

• Projects managed using adaptive approaches make use of frequent reviews of incremental work products and cross-functional project teams to accelerate knowledge sharing and ensure that risk is understood and managed.
• The requirements are kept as a living document that is updated regularly, and work may be reprioritized as the project progresses, based on an improved understanding of current risk exposure.

PMBOK Guide, Sixth Edition, 11 - Project Risk Management, p. 400

Question 19

Identify the concepts for Project Risk Management.

Not an objective from the study guide.

Answer 19

tl;dr

• [risk v. reward]
• [identify and manage]
• [individual v. project risk]
• [positive or negative]
• [iterative process]
• [define thresholds to prioritize]

quotes

• [risk v. reward] All projects are risky. Organizations choose to take project risk in order to create value, while balancing risk and reward.
• [identify and manage] Project Risk Management aims to identify and manage risks that are not covered by other project management process.
• [individual v. project risk] Risk exists at two levels within every project. Individual project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives. Overall project risk is the effect of uncertainty on the project as a whole, arising from all sources of uncertainty including individual risks, representing the exposure of stakeholders to the implications of variations in project outcome, both positive and negative. Project Risk Management processes address both levels of risk in projects.
• [positive or negative] Individual project risks can have a positive or negative effect on project objectives if they occur. Overall project risk can also be positive or negative.
• [iterative process] Risks will continue to emerge during the lifetime of the project, so Project Risk Management processes should be conducted iteratively.
• [define thresholds to prioritize] In order to manage risk effectively on a particular project, the project team needs to know what level of risk exposure is acceptable in pursuit of project objectives. This is defined by measureable risk thresholds that reflect the risk appetite of the organization and project stakeholders.

PMBOK Guide, Sixth Edition, Appendix X4 - X4.8 – Key Concepts for Project Risk Management, p. 677