11 Risk Flashcards
Risk Management Processes
Plan -P Identify -P Qualitative Risk Analysis -P Quantitative Risk Analysis -P Plan Responses -P Implement -E Monitor Risks -M
Risk Management Overview
Projects are always risky, should be controlled and intentional manner to create value
Balance risk and reward
1) Individual Project Risk
2) Overall Project Risk
Uncertain event or condition that has a positive or negative effect on objectives
Risk highest at the beginning (max uncertainty)
Risk: Trends and Emerging Practices
Taking care of all risks
Non-event risks: uncertain future events may occur
- Variability Risk: above or below target, good/bad weather
- Ambiguity Risk: what might happen in the future (tech advances, etc)
Project Resilience - unknowable unknowns
Integrated risk management - risk managed as an organization
Risk: Tailoring considerations
Project size ($, scope, duration) Project complexity (innovation? outside dependencies?) Project Importance (critical for org.?) Development approach (waterfall (predictive) - linear or adaptive (agile) - iterations)
Plan Risk Management Process
Planning
define how to conduct risk management activities
Done once or at key points
Plan Risk Inputs
PC PMP (all components) Proj Doc - Stakeholder register EEF/OPA
Plan Risk Outputs
Risk Management Plan
- risk strategy
- methodology
- roles and responsibility
- funding
- timing
- risk categories
- stakeholder risk appetite
- definitions of risk probability and impacts
- Prob and impact matrix
- Reporting formats
- Tracking
Identify Risks Process
Planning
identify individual and project risk and documenting characteristics
Source of risks?
Goal: document the risks and sources
Identify Risks Inputs
PMP - requirements - schedule - cost -quality - resource - risk -scope baseline - cost baseline Proj Docs - assumption log cost estimates duration estimates issue log LL requirements documentation Resource requirements stakeholder register
Agreements
Procurement documentation
EEF/OPA
Identify Risks T/T
EJ Data gathering -brainstorming -checklists -interviews Data Analysis - RCA - Assumption and constraint analysis - SWOT analysis - Document analysis Interpersonal and team skills - facilitation Prompt lists meeetings
Identify Risks Outputs
Risk Register *(key document) Risk Report Project doc updates - Assumption log - Issue log - LL
Qualitative Risk Analysis Overview
prioritize individual project risks for further analysis or action. assess probability of occurrence and impact. What will be the impact?.
Focuses on high-priority risks
Qualitative Risk Analysis Inputs
PMP - risk management plan Proj Doc - Assumption log - Risk register - stakeholder register EEF/OPA
Qualitative Risk Analysis T/T
EJ Data gathering - interviews Data Analysis - Risk data quality assessment - Risk probability and impact assessment - Assessment of other risk parameters Interpersonal and team skills - facilitation Risk Categorization Data Representation - probability and impact matrix - Hierarchical charts Meetings
Qualitative Risk Analysis Outputs
Proj Doc update
- assumption log
- issue log
- risk register
- risk report
Quantitative Risk Analysis Overview
numerically analyzing the combined effect of identified individual project risks and other sources of uncertainty
Quantify the overall project risk exposure
Quantitative Risk Analysis Inputs
PMP - risk management plan - scope baseline - schedule baseline - cost baseline Project documents - assumption log - basis of estimates - cost estimates - cost forecasts - duration estimates - milestone list - resource requirements - risk register - risk report - schedule forecasts EEF/OPA
Quantitative Risk Analysis T/T
EJ Data gathering - interviews Interpersonal and team skills - facilitation Representations of uncertainty Data analysis - simulations - sensitivity analysis (Tornado diagram) - decision tree analysis - influence diagrams
Quantitative Risk Analysis Outputs
Proj Doc update
- risk report
Plan Risk Responses Overview
developing options, selecting strategies and agreeing on actions to address risk exposure.
Plan Risk Response Inputs
PMP - resource management plan - risk management plan - cost baseline documents - LL - schedule - team assignments - resource calendars - risk register - risk report - stakeholder register EEF/OPA
Plan Risk Response T/T
EJ Data gathering - interviews Interpersonal and team skills - facilitation Strategies for threats Strategies for opportunities Contingent response strategies Strategies for overall project risk Data analysis - alternatives analysis - cost-benefit analysis Decision making - multi criteria decision analysis
Plan Risk Response Outputs
Change requests PMP updates - schedule - cost - quality - resource - procurement - scope baseline - schedule baseline - cost baseline document updates: - assumption log - cost forecasts -LL -schedule -team assignments -Risk register -Risk report
Implement risk responses Inputs
PMP - risk management plan Documents - LL - risk register - risk report OPA
Implement risk responses T/T
EJ
Interpersonal and team skills
- influencing
PMIS
Implement risk responses Outputs
Change requests Doc updates - Issue - LL - Project team assignments - Risk register - Risk report
Monitor Risk inputs
PMP - Risk management plan Documents - Issue log - LL - risk register - risk report Work performance data Work performance reports
Monitor Risk T/T
Data analysis - technical performance analysis - reserve analysis Audits (how are you doing vs. The plan) Meetings
Monitor Risk Outputs
Work performance information change requests PMP updates document updates - assumption log - issue log - LL - risk register - risk report OPA
Risk management objectives
Increase the likelihood and impact of positive events
Decrease likelihood and impact of negative events
Risk key concepts
Positive events = Opportunity, good risk
Business risk = pos or neg risk
Pure risk= just negative consequence
Risk adverse= does not take risks
Risk tolerance= degree of risk you’re willing to accept
Risk threshold= level of risk that would need specific responses
Risk Categorization
External
Internal
Technical
Project Management
Known risks (managed proactively)
Identified and analyzed
Plan responses for the risks
Known Risk (unmanaged proactively)
Should be assigned a contingency reserve (money set aside)
Unknown risks
Assign a MANAGEMENT reserve
Sponsor, upper management disperses (approves) not the PM
Issue
A risk that had come up ( it is now a risk!:
Key concepts
Uncertainties —> risks
Constraints and assumptions
Project creates value (balance risk and reward), avoid paralysis by analysis
Risks of deviation —> project failure
2 levels
- Individual
- Overall project risk
Negative -> avoid or mitigate
Positive -> enhance chance
Output: Risk management plan
Risk strategy Methodology Roles and responsibilities Funding Timing Risk categories Stakeholder is appetite Definitions of risk probability and impacts Probability and impact matrix
RBS
Risk breakdown structure
Level 1: Technical risk Management risk Commercial risk External risk
Then breakdown to level 2
Prompt Lists
Predetermined
Framework:
PESTLE - political, economic, social, technology, legal, Environmental
….
Assessment of risk parameters
Pmbok 424
Strategies for threat
Escalate-outside of Scope/project, Avoid-0 Risk (ie change scope/strategy) Transfer- shift impact to a 3rd party Mitigate-reduce probability Accept- no proactive action taken (passive = document; active=est reserve)
Strategies for Opportunities
Escalate- outside scope or project
Exploit- eliminate the uncertainty by making it happen (use new tech, good ppl)
Share- some or all ownership to a 3rd party who can capture benefits
Enhance- Identify and maximize key drivers to increase probability of it occurring
Accept- take advantage, but not actively seeking it
