All-In-One Chapter 11 - Managing Project Risks Flashcards
Acceptance
a risk response appropriate for both positive and negative risks, but often used for smaller risks within a project
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.
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
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 forseeable 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. 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
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
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
Monte Carlo technique
a simulation technique that got its name from the casinos of Monte Carlo, Monaco. The simulation is completed using a computer software program that can simulate a project, using values for all possible variables, to predict the most likely model
Ordinal scales
a ranking approach that identifies and ranks the risks from very high to very unlikely or to some other value
Organizational risks
the performing organization can contribute to the project’s risks through unreasonable cost, time, and scope expectations; poor project prioritization; inadequate funding or the disruption of funding; and competition with other projects for internal resources
Probability and impact matrix
a matrix that ranks the probability of a risk event occurring and its impact on the project if the event does happen; used in qualitative and quantitative risk analysis
Project management risks
these risks deal with faults in the management of the project: the unsuccessful allocation of time, resources, and scheduling; unacceptable work results; and poor project management
Pure risks
these risks have only a negative outcome.
Qualitative risk analysis
the approach “qualifies” the risks that have been identified in the project. Specifically, qualitative risk analysis examines and prioritizes risks based on their probability of occurring and their impact on the project should they occur
Quantitative risk analysis
this approach attempts to numerically assess the probability and impact of the identified risks. It also creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies on several different tools to accomplish its goal
RAG racing
an ordinal scale that uses red, amber and green (RAG) to capture the probability, impact, and risk score
Residual risks
risks that are expected to remain after a risk response
Risk
a project risk is an uncertain event or condition that can have a positive or negative impact on the project
Risk identification
the systematic process of combining through the project, the project plan, the work breakdown structure, and all supporting documentation to identify as many risks that may affect the project as possible
Risk management plan
a project management subsidiary plan that defines how risks will be identified, analyzed, responded to, and monitored within the project. The plan also defines the iterative risk management process that the project is expected to adhere to
Risk management planning
the agreed-upon approach to the management of the project risk processes
Risk owners
the individuals or entities that are responsible for monitoring and responding to an identified risk within the project
Risk register
the risk register is a project plan component that contains all of the information related to the risk management activities. It’s updated as risk management activities are conducted to reflect the status, progress, and nature of the project risks.
Risk response audit
an audit to test the validity of the established risk responses
Risk responsibilities
the level of ownership an individual or entity has over a project risk
Risk score
the calculated score based on each risk’s probability and impact. The approach can be used in both qualitative and quantitative risk analysis
Root cause identification
root cause identification aims to find out why a risk event may be occurring, the causal factors for the risk events, and then, eventually, how the events can be migrated or eliminated
Secondary risks
new risks that are created as a result of a risk response
Sensitivity analysis
a quantitative risk analysis tool that examines each risk to determine which one has the largest impact on the project’s success
Sharing
a risk response that shares the advantages of a positive risk within a project
SWOT analysis
SWOT analysis is the process of examining the project from the perspective of each characteristic: strengths, weaknesses, opportunities, and threats
Technical, quality or performance risks
technical risks are associated with new, unproven, or complex technologies being used on the project. Changes to the technology during the project implementation can also be a risk. Quality risks are the levels set for expectations of impractical quality and performance
Transference
a risk response that transfers the ownership of the risk to another party. A fee and contractual relationships are typically involved with the transference of a risk
