Ch 11 Project Risk Management Flashcards
Escalate (Threat & Opportunity Strategy)
A threat & opportunity strategy that involves giving the responsibility of monitoring and controlling a risk (that is outside the scope of the project and may be affecting multiple projects) to the program or portfolio level of the organization
An important concept for the Strategies for Threats and Strategies for Opportunities tools that helps execute the Plan Risk Responses process (Risk/Planning)
Accept (Threat & Opportunity Strategy)
A threat & opportunity strategy that can be either active or passive
- Active acceptance is where a contingency is set up for time and money
- Passive acceptance is when there is no proactive plan to respond to the risk, only to monitor it
An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)
Risk Categorization
A technique used to help rank risks more easily
The Risk Breakdown Structure can help to categorize project risks, or they could be categorized by root cause
A tool used to help execute the Perform Qualitative Risk Analysis process (Risk/Planning)
Plan Risk Responses
The process of planning risk responses
Knowledge Area: Risk
Process Group: Planning
Inputs:
- Risk Register
Tools:
- Strategies for Threats
- Strategies for Opportunities
- Contingent Response Strategies
Outputs:
- Risk Register Updates
Workaround
A response to an unanticipated negative risk event that has occurred and was not planned in advance (e.g., patch, quick fix)
Residual Risk
A small amount of risk (threats) remaining after:
- Mitigation
- Acceptance
- Implementation of planned responses
Contingency and fallback plans can be created for residual risk
An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)
Risk Breakdown Structure
A hierarchical breakdown of risks that is used to categorize them
A component of the Risk Management Plan, created during the Plan Risk Management process (Risk/Planning)
Risk Probability and Impact Assessment
Assessment of the probabiity and impact of all the project risks by interviewing or meeting with the project team
Values of high, medium, or low can be used to rank the risk.
A tool used to help execute the Perform Qualitative Risk Analysis process (Risk/Planning)
Exploit (Opportunity Strategy)
An opportunities strategy used when the organization wants to ensure that an opportunity is realized, such as completing a project on time
Taking advantage of or capitalizing on a positive risk’s occurence; the opposite of avoidance
Example: using the very best staff available to complete a project on time
An important concept for the Strategies for Opportunities tool that helps execute the Plan Risk Responses process (Risk/Planning)
Expected Monetary Value Analysis (EMV)
A data analysis technique in which a certain dollar amount is assigned to each risk using decision tree analysis (aka make-or-buy analysis)
To calculate the EMV, multiply the probability by the risk costs; to get the total, add the EMV to the initial cost
A tool used to help execute the Perform Quantitative Data Analysis process (Risk/Planning)
Transfer (Threat Strategy)
A threat strategy in which risk is given to another company; ownership of the response is shifted to a third party (e.g., outsourcing, purchasing insurance, using a warranty)
An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)
Risk Trigger
Symptoms or warning signs that a potential risk is about to occur on a project
An important concept for the Monitor Risks process (Risk/M&C)
Perform Qualitative Risk Analysis
The process of prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact as well as other characteristics
Knowledge Area: Risk
Process Group: Planning
Inputs:
- Risk Register
Tools:
- Data Analysis
- Risk Probability and Impact Assessment
- Data Representation
- Probability and Impact Matrix
- Risk Categorization
Outputs:
- Risk Register Updates
Risk
An uncertain event that can affect one or more project objectives
Can be positive or negative:
- Positive risks are known as opportnities
- Negative risks are known as threats
Implement Risk Responses
The process of implementing the planned risk responses if any of the risks materialize
Knowledge Area: Risk
Process Group: Executing
Inputs:
- Risk Register
Tools:
- None
Outputs:
- Risk Register Updates
Risk Management Plan
The management plan that defines the risk management methodology and states how to execute the risk management process
It does not list any risks
It does includes the following:
- How to identify risk?
- How will you do qualitative risk assessment?
- How will you do quantitative risk assessment?
- How will you respond to risk?
- How will implement the risk responses?
- How will you monitor and control the risks once the project is executed?
- Risk breakdown structure, which is used to categorize risks.
An output of the Plan Risk Management process (Risk/Planning)
An input to the:
- Develop Project Management Plan process (Integration/Planning)
- Manage Stakeholder Engagement process (Stakeholder/Executing)
Sensitivity Analysis
A type of data analysis technique that looks at the risks that have the most impact on a project and/or how one risk affects multiple parts of the project
The tornado diagram is one way of displaying such information
A tool used to help execute the Perform Quantitative Data Analysis process (Risk/Planning)
Mitigate (Threat Strategy)
A threat strategy in which risk probability and/or impact is reduced (e.g., prototype, additional testing)
An important concept for the Strategies for Threats tool that helps execute the Plan Risk Responses process (Risk/Planning)
Enhance (Opportunities Strategy)
An opportunities strategy that is the opposite of mitigate; instead of reducing risk, its probability or impact on the project is increased (e.g., getting a lower price on supplies)
An important concept for the Strategies for Opportunities tool that helps execute the Plan Risk Responses process (Risk/Planning)
Secondary Risk
A new risk that emerged as a result of implementing a risk response
Fallback Plan
A contingent response strategy that is known in advance
Perform Quantitative Risk Analysis
The process of numerically analyzing the risk on a project
Only done for HIGH or MAJOR risks–those relating to availability of time, budget, project requirements etc.
Knowledge Area: Risk
Process Group: Planning
Inputs:
- Risk Register
Tools:
- Data Analysis
- Simulation
- Sensitivity Analysis
- Expected Monetary Value Analysis (EMV)
Outputs:
- Risk Register Updates
SWOT Analysis
A data analysis technique that identifies positive and negative risks
- Strengths and opportunities will identify the positive risks
- Weaknesses and threats will identify the negative risks
A tool used to help execute the Identify Risks process (Risk/Planning)
Tornado Diagram
A method of displaying the results of a sensitivity analysis
The negative risks are on the left side, the positive risks are on the right side, and the risks with the largest range are at the top, which forms a tornado funnel shape
A tool used to help execute the Perform Quantitative Data Analysis process (Risk/Planning)
