Learning outcome 10 Flashcards
10.1 Explain each stage in risk management process
WHAT- IDENTIDFICATION ACPBNIDST
WHY- The PM will use a multitude of tools to complete a RISK ANALYSIS such as VUCA, PESTLE and SWOT. They will try to thoroughly cover all eventualities by using all the tools and doing things such as having interviews with experienced individuals. Having a firm understanding of this environment will increase probability of project success
WHAT- ASSES
By doing this it is allowing the PM to plot the IMPACT/ PROBABILTY GRID which allows them to understand where the want to focus their attention the most, on the risks with most impact or those with a higher probability of happening.
WHAT- PLAN RESPONSE ARAT PEAC
WHY- The PM will develop the RISK MANAGEMENT PLAN, a structured plan for dealing with all risk- Negative and Positive.
There will always be a reactive and proactive side to the plan. For negative risk the PM will seek to either ACCEPT, REDUCE, TRANSFER or AVOID the risk if possible. On the flip side if a opportunity arises they will look to either REJECT, ENCHNACE the probability, SHARE or EXPLOIT it. By knowing how to respond it will allow the PM to Allocate the risk to the MOST APPROPRIATE OWNER. Having this robust plan will improve the likelihood of success of the project and certainly allow it to be dealt with more effectively it does arise.
10.2 Explain Proactive and Reactive responses to risk
WHAT- TRANSFER- PROACTIVE
WHY- If an Org’ does do not want to carry a risk it may have the option of TRANSFERING it out. It is commonly used to TRANSFER out FINANCIAL risk. This can be done through such things as INSURANCE or PENALTY CLAUSES. It allows the PM to minimise the risk to the Org’ but can never remove it completely. It will give the Project extra security and optimise its chances of success
WHAT- AVOID- REACTIVE
WHY- Threats maybe avoided by eliminating the cause, this can be done be removal WP’s, RESCOPING or EVEN STOP THE PROJECT. It provides the project the ability to navigate past RISKS that will either severely impact the TCQ constraints or even mean the failure of the project. As these are escalated to the PSB and dealt with it will provide more SH confidence as it shows the project is under control. Allows a fall back into the CONTINGENCY plan to deal with it if it does arise.
WHAT- REDUCE- PROCATIVE
WHY- The PM will carry out the analysis of the risk and plan mitigation for it. It allows the PM to proactively reduce the probability and the impact to the project of that specific threat. It will in turn allow the project to be more robust and the risk to handled efficiently by its appropriate OWNER as well as be INDENTIFIED and ESCELATED early to the PSB.
10.3 Explain the benefits of risk management
IDEL
WHAT- IDENTIFIES AND ALLOCATES RSPONSIBILITY TO THE BEST RISKOWNER
WHY- The ALLOCATION of a SINGLE RISK OWNER removes the AMBIGUITY of where the OWNERSHIP lies. Since the PM has outlined this in the risk management plan it allows for efficient escalation to the correct person when it arises hence allowing for it to be dealt with in a timely manner. This will reduce impact on the project TC constraints.
WHAT- DISCOURAGES THE ACCEPTANCE OF FINACIALLY UNSOUND PROJECTS
WHY- Risk management helps identify the risk of exposer of a project. This enables more informed and realistic decisions by the Org’ when it comes to deciding which projects to include when selecting and prioritising in the portfolio. It might even lead to COST SAVINGS where a project is unlikely to meets its objectives.
WHAT- DEMONSTRATES A PROFESSIONAL AND RESPONSIBLE APPROACH TO STAKEHOLDERS
WHY- Sharing information and understanding of risk with the SNR STAKEHOLDERS and PSB provides them with confidence that the project is being managed effectively and help the Org’ COMPLY with GOVERNANCE requirements. As the Snr stakeholders have more confidence it will provide more buy in from them on the project and this can be beneficial when it is required at other times during the project lifecycle.
10.4 issue
Log and analyse
For lessons learnt
Where does it sit? Priority, impact
Is it a risk??? Was there a plan
Escelate
Replan using change control
Implement
Track
