4.5 Risk and Issue Management Flashcards
Definition of risk
Potential of a situation or event to impact on the achievement of objectives (both positive (opportunities) and negative (threat))
Stages of risk management process
- Identification
- Analysis
- Monitoring
- Response
- Closure
Threat responses in a risk management process
- Avoid
- Reduce
- Transfer
- Accept
Opportunity responses in a risk management process
- Exploit
- Enhance
- Share
- Reject
Considerations of the ‘Identification’ stage of a risk management process
- Identify in workshops, interviews, checklists, assumptions
- Unique ID, description, category, impact, probability, owner
- Team and PM involved and own the process
Considerations of the ‘Analysis’ stage of a risk management process
- Quantitative - specific measurable metrics, monte carlo, decision trees and sensitivity analysis
- Qualitative - subjective statements
- Impact and probability
- Impact based on log scale to highlight importance
- Priority number / severity is impact x probability
- Clear measure of risk exposure
Considerations of ‘Response’ stage of risk management process
- Set actions and contingencies
- Actions recorded as part of project plan
- Contingency set aside to deal with known risk
- Owners responsible for actions
- Plan for dealing with risks as they mature
- Different responses for threats and opportunities
Considerations of ‘Closure’ stage in risk management process
- Terminate the risk when it no longer has opportunity to appear
- Risk register only handed over in transition
- Stakeholders informed of risk exposure
- Frees up contingencies
- Helps inform future projects
- Signifies risks no longer need attention
Risk management in linear lifecycle
- Primary identification at outset
- Regular risk reviews to add new risks
- Contingencies established at outset as part of PMP
Risk management in iterative lifecycle
- Ongoing risk identification as scope gets definition
- Contingencies assessed as needed
Definition and features of contingency
- Additional time or budget to deal with consequences of risks
- Accounts for uncertainty from estimations
- Contingency plan - what to do if risk matures
- Contingency budget - how much time / budget available to deal with risks maturing
- Time added as extra float to activities
- Budget used to add resources
- Contingency owned by sponsoring organisation
Definition and features of unknown unknowns
- Management reserve to deal with completely unexpected situations
- QSRA (quantitative schedule risk assessment)
Benefits of risk management
- Clearly defined roles and responsibilities ensure proactive action
- Accurate contingencies available without overburdening sponsoring organisational
- Assist informed decision making
- Improved stakeholder confidence
- Culture of success to allow more risk in the future
- Staff morale improves
- Products produced more effectively
Definition and features of issues
- A problem breaching tolerances
- Requires sponsor support to resolve
- Not recognising issues allow impact to grow
- Failing to track leads to no record or lessons learnt
- Losing ownership of actions means PM has more to fix
Stages of Issues Management
- Identification
- Escalation
- Assign actions
- Change control
- Close
