Project Risk Management Flashcards
Acceptance
A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.
Ambiguity risks
Risks that have an uncertain, unclear nature, such as new laws or regulations, the marketplace conditions, and other risks that are nearly impossible to predict.
Avoidance
A risk response to avoid the risk.
Brainstorming
The most common approach to risk identification; usually completed by a 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 activities to overlap, or 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 .01 (very low) to 1.0 (certain).
Checklists
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, and the reliability of the nature of the data submitted.
Decision tree
A method to determine which of two or more decisions is the best one. The model examines the costs and benefits of each decision’s outcome and weighs the probability of success for each of the decisions.
Delphi Technique
An anonymous method of querying experts about foreseeable risks within a project, phase, or component of a project. The results of the survey are analyzed by a third party, organized, and then circulated to the experts. There can be several rounds of anonymous discussion with the Delphi Technique, without fear of backlash or offending other participants in the process. The goal is to gain consensus on project risks within the project.
Enhancing
A risk response that attempts to enhance the conditions to ensure that a positive risk event will likely happen.
Escalating
A risk response that is appropriate for both positive and negative risk events that may outside of the project manager’s authority to act upon.
Expected monetary value (EMV)
The monetary value of a risk exposure based on the risk’s probability and impact in the risk matrix. This approach is typically used in quantitative risk analysis because it quantifies the risk exposure.
Exploit
A risk response that takes advantage of the positive risks within a project.
External risks
These risks are outside of the project, but directly affect it—for example, legal issues, labor issues, a shift in project priorities, or weather. “Force majeure” risks call for disaster recovery rather than project management. These are risks caused by earthquakes, tornadoes, floods, civil unrest, and other disasters.
Flowcharts
System or process flowcharts show the relationship between components and how the overall process works. These are useful for identifying risks between system components.
Influence diagrams
An influence diagram charts out a decision problem. It identifies all of the elements, variables, decisions, and objectives and also how each factor may influence another.
Ishikawa diagrams
These cause-and-effect diagrams are also called fishbone diagrams and are 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 that got its name from the casinos of Monte Carlo, Monaco. The simulation is completed using a computer software program that can simulate a project, using values for all possible variables, to predict the most likely model.
Ordinal scales
A ranking approach that identifies and ranks the risks from very high to very unlikely or to some other value.
Organizational risks
The performing organization can contribute to the project’s risks through unreasonable cost, time, and scope expectations; poor project prioritization; inadequate funding or the disruption of funding; and competition with other projects for internal resources.
PESTLE
A prompt list used for risk identification. PESTLE examines risks in the Political, Economic, Social, Technological, Legal, and Environmental domains.
Probability and impact matrix
A matrix that ranks the probability of a risk event occurring and its impact on the project if the event does happen; used in qualitative and quantitative risk analyses.
Project management risks
These risks deal with faults in the management of the project: the unsuccessful allocation of time, resources, and scheduling; unacceptable work results; and poor project management.
Pure risks
These risks have only a negative outcome. Examples include loss of life or limb, fire, theft, natural disasters, and the like.
Qualitative risk analysis
This approach “qualifies” the risks that have been identified in the project. Specifically, qualitative risk analysis examines and prioritizes risks based on their probability of occurring and their impact on the project should they occur.
Quantitative risk analysis
This approach attempts to numerically assess the probability and impact of the identified risks. It also creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies on several different tools to accomplish its goal.
RAG rating
An ordinal scale that uses red, amber, and green (RAG) to capture the probability, impact, and risk score.
Residual risks
Risks that are expected to remain after a risk response.
Risk
A project risk is an uncertain event or condition that can have a positive or negative impact on the project.
Risk identification
The systematic process of combing through the project, the project plan, the work breakdown structure, and all supporting documentation to identify as many risks that may affect the project as possible.
Risk management plan
A project management subsidiary plan that defines how risks will be identified, analyzed, responded to, and monitored within the project. The plan also defines the iterative risk management process that the project is expected to adhere to.
Risk management planning
The agreed-upon approach to the management of the project risk processes.
Risk owners
The individuals or entities that are responsible for monitoring and responding to an identified risk within the project.
Risk register
The risk register is a project plan component that contains all of the information related to the risk management activities. It’s updated as risk management activities are conducted to reflect the status, progress, and nature of the project risks.
Risk report
The risk report explains the overall project risks and provides summaries about the individual project risks.
Risk response audit
An audit to test the validity of the established risk responses.
Risk responsibilities
The level of ownership an individual or entity has over a project risk.
