Managing Project Week 5: Risk

Question 1

What processes do risk management processes include?

Answer 1

1. Plan risk management
2. Identify risks
3. Perform risk analysis (qualitative or quantitative)
4. Plan risk responses
5. Implement risk responses
   Monitor risks

Question 2

the process of defining how to conduct risk management activities for a project.

Answer 2

Risk management plan

1. Describe how you developed your risk management plan in past tense
2. Give an overview of how you will manage project risks and issues after the project plan is approved (future tense), such as continuous risk management throughout the project, discuss risks at status meetings, use the risk and issue register, with status reports

Question 3

What is the difference between issues and risks?

Answer 3

Risk: may happen, may = probability a risk may occur, probability could be high of 77% the risk may occur

Issue: is a risk that has occurred or will occur; 100% probability the project risk will be realized = issue

Question 4

process of identifying individual project risks as well as sources of overall project risk, and documenting their characteristics

Answer 4

Identify risks

1. Risk can be internal and external, it can be categorised according to their type and who they influence.
2. A risk register (output) is one method that is now commonly used to categorise risk
3. Risk and issue identification needs to be continuous, and all team members should be risk aware and actively identify risks
4. Two key identification approaches:

3.1 general, where risk can be identified by casual conversation and questions.

3.2 focused, such as looking at risk associated with critical path, budget, phases, deliverable,
milestones etc

Question 5

Risk analysis involve which two key elements?

Answer 5

1.Analyse probability of risk occurrence
2. Analyse impact should the risk occur

Output: project documents updates

Question 6

What are the two types of risk analysis?

Answer 6

1. Qualitative (high-medium-low)
2. Quantitative (rarely required)

Question 7

Risk analysis: Qualitative risk analysis

Answer 7

Qualitative risk analysis relies on expert judgment to assess probability and impact.

Most common analysis is to rank probability of occurrence and impact as: High, medium and low

Question 8

Risk analysis: Quantitative risk analysis

Answer 8

process of numerically analyzing the combined effect of identified individual project risks and other sources of uncertainty on overall project objective so on many projects this level of analysis may not be justifiable, and a more qualitative approach is sufficient

quantitative techniques may be deterministic (scenarios) or probabilistic(statistical)

Question 9

Risk Management Workshop Process (5 processes) for Risk Analysis

Answer 9

1. Stakeholders write 2-3 risks on their yellow stickies
2. Assess the impact and probability (H-M-L)
3. Ask stakeholders what risks they identified,（general and focused approach)
4. Place them on a whiteboard or wall
5. After analysis and consensus, document in risk register

Question 10

Plan Risk Response (Risk Treatment)

Answer 10

Plan a response to the risks
(2 ways)

1. Prevent - identify actions to prevent the risk from occurring (e.g. accept the risk, purchase insurance, transfer the risk)
2. Mitigate - identify actions to reduce the impact of the realized risk event.

2.1 If the risk event occurs, it is considered an issue. The way you treat issues is called an issue resolution plan.

2.2 Usually, you implement the mitigation plan you developed when you identified the risk. The risk mitigation plan may evolve into the issue resolution plan)

Question 11

Implement Risk Response (3 common steps)

Answer 11

1. Implement risk prevention and mitigation, and issues resolution actions
2. Update the risk and issue register
3. Update budget, schedule, communications plan, etc

Question 12

Monitor and Control Risks (4 steps)

Answer 12

1. Regularly review and update the risk and issue register,
2. Add new risks and issues to the register
3. Schedule regular risk management meetings
4. Report risk and issues in status reports

Question 13

What are typical project risks?

Answer 13

1. Large investments
2. Unbalanced cash flows
3. Innovative technological systems
4. Novel procurement methods
5. Very large or highly complex projects
6. Severe time constraints
7. Stakeholder inexperience
8. High performance/quality standard
9. Highly regulated environments
10. Environmental, political or cultural sensitivities
11. Locational instabilities and conditions

Question 14

Traditional risk matrix

Answer 14

Risk = probability x consequence
(1=low, 3=high)

Question 15

Three dimensional risk matrix

Answer 15

Risk = probability x consequence x duration
(3-5 =low, 11-17=high, 18-27=extreme)