Managing Risk and Issues Flashcards
Define Risk Management
Risk management is a process that allows individual risk events and overall risk to be understood and managed proactively, optimising success by minimising threats and maximising opportunities
Define a Risk Event
An UNCERTAIN event or set of circumstances that would, if occurred, have an effect on the achievement of one or more objectives
What are the 5 key phases of the APM PRAM (Project Risk Analysis Method)?
- Initiate (Focus risk management process for this project. Define project)
- Identify (What are they?)
- Assess (Probability and Impact of occurence )
- Plan Responses (What can be done to manage it? Who should monitor and action each risk?)
- Implement Responses (Carry out agreed actions)
Can risk be positive, or is it always just negative?
Risk is an UNCERTAIN event that effects project, this effect may be positive or negative
What are the 4 ways you can Respond to a Threat (negative risk)?
Avoid, Transfer, Reduce, Accept Avoid (e.g. eliminate work package) Transfer (Pass it on to another party) Reduce (Invest now to mitigate probability or minimise impact) Accept (do nothing)
What are the 4 ways you can Respond to an Opportunity?
Exploit, Share, Enhance, Reject
Exploit (Scope is changed to ensure opportunity occurs)
Share (some of risk is allocated to another party who is best able to realise the benefits)
Enhance (Proactive measure to increase probability and/or impact)
Reject (Benefits not significant enough)
Define an Issue in PM
A formal issue occurs when the tolerances of delegated work are predicted to be exceeded or have been exceeded. This triggers the escalation of the issue from one level of management to the next in order to seek a solution
Define Issue Management
“Issue management is the process by which concerns that threaten the project
objectives and cannot be resolved by the project manager are identified and
addressed to remove the threats they pose.”
Purchasing insurance is best considered an example of risk:
a. Mitigation
b. Transfer
c. Acceptance
d. Avoidance
B
Rationale: By purchasing insurance the insurance company assumes the financial
responsibility for the impact if a claim is made under the policy.
Which of the following is NOT a risk?
a. Resources may not be available as and when required
b. We have no experience in performing this type of project
c. Interest rates may go up
d. Equipment may be late in arriving
B
Rationale: Risk is about uncertainty: unknowns. If we know that we, “have no experience”, this is a known. It may be an issue but it is not a risk.
Predicting a breach in tolerances of delegated work is a trigger for…
a. A contingency plan
b. Disciplinary action
c. Escalation
d. Cancelling the work
A
Rationale: A contingency plan is a series of actions to be put in place in response to a specific set of circumstances that would be detrimental to the project. A trigger is an early warning sign that those circumstances are becoming reality.
An issue defined as something that:
a. Is identified by an important stakeholder
b. Affects an important stakeholder
c. Is outside of the tolerance of delegated work
d. Has an impact on the end date of the project
C
Rationale: If something is within delegated tolerance decisions can be made with regard to it. If the delegated tolerance has, or will be breached, decisions have to be
escalated for resolution. This is an issue.
Which of the following is a project issue?
a. Inclement weather may arise
b. There is an increased likelihood of the product failing its acceptance test
c. A supplier has submitted their invoice which is above the project manager’s financial
authority level
d. A key resource has resigned causing a delay to the project
D
Rationale: A and B are both uncertainties, risks. C is an internal procedural process,
the invoice just needs to be processed for payment. The best answer is D: it has
happened and there is a delay. This is an issue that needs to be escalated for
resolution - more time, de-scope or more resources.
What is the process of Issue Management?
Request, Review, Assess, Decide, Implement
Request (Identify, log)
Review (Impact on Time, Cost, Quality, Benefits, Scope, Risk)
Assess (PM recommend options)
Decide (Sponsor / Steering Group)
Implement (PM todo. Action, Monitor, Close)
