23 Risk and Issue Management

Question 1

State the three key aspects of risk management.

Answer 1

• It allows individual risk events and overall risk to be understood and managed proactively, optimising success by minimising threats and maximising opportunities.
• Risk management is influenced by the risk appetite of the investing organisation that will provide the tolerance levels on what is acceptable or not.
• The risk management process is iterative to reflect the dynamic nature of project work.

Question 2

What are the benefits of risk management?

Answer 2

• Supports more realistic plans, schedules and budgets
• increases the likelihood of schedules and budgets being kept to
• Greater accuracy in allocated contingencies through more meaningful assessment
  Supports continuous learning and improvement
• All contributing to increasing stakeholder confidence

Question 3

What are the three key aspects of issue management?

Answer 3

• The process used to manage issues is a simple concept focused on understanding the issue, in order to prioritise and assign owners for a timely resolution
• Requires support from the project sponsor, who may escalate to the governance board
• The management of issues are tracked from identifying to resolving the issue and may require a re-plan of the baselined project management plan

Question 4

What are the benefits of issue management?

Answer 4

• Provides the structure and escalation routes required to resolve issues in a timely manner
• Raises visibility among senior stakeholders who have access to organisational resource to support resolution
• Provides a consistent way to document issues so they can be assessed against the plan
• Enables re-prioritisation and decision making
• Enables issues to be resolved efficiently so work can progress preventing further delays
• Informs continuous learning and improvement

Question 5

What is contingency?

Answer 5

The resource set aside for responding to identified and unidentified risks, also known as the unknown unknowns

Question 6

How is contingency expressed?

Answer 6

Time and budget

Question 7

In the iterative lifecycle and timeboxes, how is contingency seen?

Answer 7

Scope or quality

Question 8

How should risk management be initiated?

Answer 8

First by establishing the risk management plan for the project. This provides the roles and responsibilities, how risks are to be assessed and the impact evaluated, agreed tolerances for risk thresholds, reporting and escalation points.

Question 9

What are the five stages of the risk management process?

Answer 9

Identification, Analysis, Monitoring and Escalation, Response, and Closure.

Question 10

What are the four stages of the issue management process?

Answer 10

Log and Analyse, Escalate, Assign Actions, and Apply Change Control

Question 11

What is a proactive response to risk?

Answer 11

A planned and implemented response undertaken to address the likelihood of the risk occurring or the size of the impact if it did occur.

Question 12

What is a reactive response to risk?

Answer 12

A provision for a course of action that will only be implemented if the risk materialises.

Question 13

How do governance and risk management work together?

Answer 13

The provide systems of control for the project and give confidence to stakeholders.

Question 14

How does governance inform risk and issue management?

Answer 14

Through processes, procedures, standardised methods, specialist expertise and resources.

Question 15

How is assurance linked to governance?

Answer 15

Governance relies on assurance to support effective decision making when it comes to managing risks and issues. Assurance is objective and independent.

Question 16

How does risk analysis provide guidance to assurance?

Answer 16

It provides guidance on where vulnerabilities lie and in return evidence from assurance improves risk assessment and informs decision making at the decision gates.