11 - Project Risk Management Terms Flashcards
Acceptance
A risk response appropriate for both positive and
negative risks, but often used for smaller risks within a project.
Ambiguity risks
Risks that have an uncertain, unclear nature, such as new laws or regulations, the marketplace conditions, and other risks that are nearly
impossible to predict.
Avoidance
A risk response to avoid the risk.
Brainstorming
The most common approach to risk identification; usually completed by a project team with subject matter experts to identify the
risks within the project.
Business risks
These risks may have negative or positive outcomes. Examples include using a less experienced worker to complete a task, allowing phases or activities to overlap, or forgoing the expense of formal training for on-the-job
education.
Cardinal scales
A ranking approach to identify the probability and impact by using a numerical value, from .01
(very low) to 1.0 (certain).
Checklists
A quick and cost-effective risk identification
approach.
Data precision
The consideration of the risk ranking scores that takes into account any bias, the accuracy of the data submitted, and the reliability of the nature of the data submitted.
Measure of exactness.
Decision tree
A method to determine which of two or more decisions is the best one. The model examines
the costs and benefits of each decision’s outcome and weighs the probability of success for each of
the decisions.
Delphi Technique
An anonymous method of querying experts about foreseeable risks within a project, phase, or component of a project. The results of the survey are analyzed by a third party, organized, and then circulated to the experts. There can be several rounds of anonymous discussion with the Delphi Technique, without fear of backlash or offending other participants in the process. The goal is to gain consensus on project risks within the
project.
Enhancing
A risk response that attempts to enhance the conditions to ensure that a positive risk event will
likely happen.
Escalating
A risk response that is appropriate for both positive and negative risk events that may outside of the project manager’s authority to act
upon.
Expected monetary value (EMV)
The monetary value of a risk exposure based on the risk’s probability and impact in the risk matrix. This approach is typically used in
quantitative risk analysis because it quantifies the
risk exposure.
Exploit
A risk response that takes advantage of the
positive risks within a project.
External risks
These risks are outside of the project, but directly affect it—for example, legal issues, labor issues, a shift in project priorities, or weather. “Force majeure” risks call for disaster recovery rather than project management. These are risks caused by earthquakes, tornadoes, floods, civil unrest,
and other disasters.
Flowcharts
System or process flowcharts show the relationship between components and how the overall process works. These are useful for
identifying risks between system components.
Influence diagrams
An influence diagram charts out a decision problem. It identifies all of the elements, variables, decisions, and objectives and also how
each factor may influence another.
Ishikawa diagrams
These cause-and-effect diagrams are also called fishbone diagrams and are used to find the root cause of factors that are causing risks within the
project.
Low-priority risk watch list
Low-priority risks are identified and assigned to a watch list for periodic monitoring.
Mitigation
A risk response effort to reduce the probability
and/or impact of an identified risk in the project.