Chapter 11- Project Risk Management Flashcards
Plan Risk Management
Process of defining how to conduct risk management activities for the project. The key benefit- ensures that the degree, type and visibility of risk management are commensurate with both the risks and the importance of the project organisation.
Plan Risk Management ITTO
Inputs: Project Management Plan Project Charter Stakeholder register Enterprise Environmental Factors Organisational Process Assets
T&T
Analytical techniques
Expert judgement
Meetings
Outputs
Risk Management Plan
Project Risk
An uncertain event or a condition, that if occurs can have positive or a negative impact on one or more objectives such as scope, quality, schedule and cost.
Risk appetite
Degree of uncertainty an entity is willing to take on in anticipation of a reward.
Risk tolerance
degree, amount, or volute of risk that an organisation or individual will withstand
Risk threshold
measures along the level of uncertainty or the level of impact at which a stakeholder may have a specific interest. Below the threshold the organisation will accept the risk, above will not.
Positive risk/ negative risk
opportunity/threat.
Risk Management Plan includes
Methodology (defines approaches, tools, data sources that will be used to perform risk management on the project). Roles and Responsibilities Budgeting Timing Risk Categories Definitions of risk probabilities and impact Probability and impact matrix Revised stakeholder's tolerance Reporting formats Tracking
Ways to classify Risk Categories
External- Regulatory, environmental, governmental, market-related shifts.
Internal-Time, cost, or scope changes; inexperience, poor planning; people; staffing; material; equipment.
Technical-change in technology
Unforeseeable
Identify risks
Process of determining which risks may affect the project and documenting their characteristics. The key benefit of this process is the documentation of existing risks and the knowledge and ability it provides to the project team to anticipate events.
Identify Risks ITTO
Inputs Risk Management Plan Cost Management Plan Schedule Management Plan Quality Management Plan Human Resource Management Plan Scope baseline Activity cost estimates Activity duration estimates Stakeholder register Project documents Enterprise environmental factors Organisational process assets
TT Documentation reviews Information gathering techniques Checklist analysis Assumptions analysis Diagramming techniques SWOT analysis Expert judgement
Output Risk register ( initial incl list of identified risks, list of potential responses)
Information gathering techniques
Brainstorming, Delphi Techniques, Interviewing, Root cause analysis.
Diagramming techniques
Cause and effect diagrams
System or process flow charts
Influence diagrams
Information gathering techniques
These are also known as Ishikawa or fishbone diagrams and are useful for identifying causes of risks
System or process flow charts
These show how various elements of a system interrelate and the mechanism of causation
Influence diagrams
These are graphical representations of situations showing casual influences, time ordering of events, and other relationships among variables and outcomes
Perform a qualitative risk analysis
The process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. The key benefit of this process is that it enables project managers to reduce the level of uncertainty and to focus on a high priority of risks.
Perform a qualitative risk analysis ITTO
Inputs Risk management plan Scope baseline Risk register Enterprise environmental factors Organisational process assets
TT Risk probability and impact assessment Probability and that impact matrix risk data quality assessment Risk categorization Risk urgency assessment Experts judgment
Outputs
Project documents updates
Risk probability assessment
It investigates the likelihood that each specific risk will occur.
Risk impact assessment
Investigates the potential effect on the project objective such as schedule, cost, quality, or performance, including both negative effects for threats, and positive effects for opportunities.
Probability and that impact matrix
add details
risk data quality assessment
technique to evaluate the degree to which the data about risks is useful for risk management. It involves examining the degree to which risk is understood and the accuracy, quality, reliability and integrity of the data about the risk.
Perform Quantitative risk analysis
Process of numerically analysing the effect of identified risks on overall project objectives. The key benefit of this process is that it produces quantitative risk information to support the decision making in order to reduce project uncertainty.
Perform Quantitative risk analysis ITTO
Inputs Risk management plan Cost management plan Schedule management plan risk register Enterprise environmental factors Organisational process assets
TT
Data gathering and representation techniques ( interviewing, probability distributions)
Quantitative risk analysis and modelling techniques ( sensitivity analysis, expected monetary value analysis, modelling and simulation)
Experts judgment
OUTPUTS
Project documents updates
Sensitivity analysis
A quantitative risk analysis tool, that examines risk for each risk to determine which one has the largest impact on the project’s success. A Tornado diagram is a special type of bar chart used in sensitivity analysis for comparing the relative importance of the variables.
Expected monetary value analysis
Statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen. EMV= IxP. A common use of this type of analysis is decision tree of analysis.
Modelling and simulation
A project simulation uses a model that translates the specified detailed uncertainties of the project into the potential impact all project objectives. i.e Monte Carlo.
Decision tree
Method that determines which of two or more to decisions is the best one. The model examines the costs and benefits of each decision’s outcome and weights and the probability of the success for each of the decision.
Plan risk responses
Process of developing options and actions to enhance opportunities and to reduce threats to project’s objectives. The key benefit: addresses the risks by their priority, inserting resources and activities into the budget, schedule and project management plan as needed.
Plan risk responses ITTO
Inputs
Risk management plan
Risk register
TT Strategies for negative risks or threats Strategies for positive risks or opportunities Contingent response strategies Experts judgment
Outputs
Project management plan updates
Project documents updates
Strategies from negative risks of threats
Avoid
Transfer
Mitigate
Accept
Strategies for positive risks or opportunities
Exploit
Enhance
Share
Accept
Control risks
Process of implementing risk response plans, tracking identified risks, monitoring residual risks, and evaluating risk process effectiveness throughout the project. The key benefit of this process is that it improves efficiency or the risk approach throughout the project lifecycle to continuously optimize risk responses.
Control risks ITTO
Inputs Project management plan Risk register Work performance data Work performance reports
TT Risk reassessment Risk audits Variance and trend analysis Technical performance measurement Reserve analysis Meetings
Outputs: Work performance information Change requests Project management plan updates Project documents updates Organisational process assets updates
Risks audits
Examine and document the effectiveness of risk responses in dealing with a identified risks and their root causes, as well as the effectiveness of the risk management process.
Technical performance measurement
Compares technical accomplishments during project execution to the schedule of technical achievement
Acceptance
A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.
Avoidance
The risk response to avoid the risk
Brainstorming
The most common approach to risk identification, were usually completed by project team with subject matter experts to identify the risks within the project.
Business risks
These risks may have negative or positive outcomes. Examples include using a less experienced worker to complete a task, allowing phases or activity to overlap, are forgoing the expense of formal training for on the job education
Cardinal scales
A ranking approach to identify the probability and impact by using a numerical value, from 0.01 (very low) to 1.0 ( very high)
Checklist
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.
Delphi technique
An anonymous methods of querying experts about foreseeable risks within a project, phase or a component of a project. Results of the survey are analyzed by a third party, organized, and then circulated to the experts.
Enhancing
A risk response that attempts to enhance the conditions to ensure that a positive risk event will likely happen
Exploit
The risk of response that takes advantage of the positive risks within a project
External risks
This risks of outside of the project but directly affect it; for example legal issues, labour issues, a shift in projects priorities, or weather.
flowcharts
system or process flow charts show relationship between components and how the overall process works. These are useful for identifying risks between system components.
Influence diagrams
And influence diagram charts out the decision problem. It identifies all of the elements, variables, decisions and objectives and also how each factor may influence another.
Ishikawa diagram
Cause and effect diagram is also called fishbone diagram and is 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 is complete that using a Computer Software program that can simulate a project, using the values for all possible variables, to predict the most likely model.
Ordinal scales
Ranking approach that identifies and ranks the risks, very high two very unlikely or to some of the value
Residual risks
Risks that are expected to remain after a risk response
Secondary risks
New risks that are created as a result of a risk response
Contingent response strategies
Responses provided which may be used in the event that a specific trigger occurs.
Fallback plan
These plans are specific actions that will be taken in contingency plans are not effective.
Contingency plans
Plans describing the specific actions that will be taken if a threat or an opportunity occurs.
Risk triggers
Events that trigger the contingency response.
Workarounds
Unplanned responses developed to deal with the occurrence of unanticipated events or problems on the project.
