Project Risk Management (14) Flashcards
What is the objective of Risk Management?
- Increase the probability and impact of positive events
- Decrease the probability and impact of negative events in the project
What are the Sub-processes within the Planning Process Group for Project Risk Management?
- Plan Risk Management
- Identify Risks
- Perform Qualitative Risk Analysis
- Perform Quantitative Risk Analysis
- Plan Risk Responses
What are the Sub-processes within the Executing Process Group for Project Risk Management?
Implement Risk Response
What are the Sub-processes within the Monitor & Control Process Group for Project Risk Management?
Monitor Risks
View the list of Risk Concepts and familiarize:
- Uncertain event or condition that has a positive or negative impact on project objectives (time, cost, scope, or quality)
- Risk can be known or unknown
- Known Risks can be handled with a plan
- Unknown Risks cannot be managed proactively. It is handled by management contingency (reserve)
- Factors that characterize risk are risk events, probability of impact and amount at stake
- Risk can be pure risk (these risks are insurable) and Business Risk (Profit/loss)
- Risk can be positive one or negative one
- Utility function/utility theory is used to measure stakeholder risk tolerance
What is Risk Appetite?
The level of risk that an organization is prepared to accept, before action is deemed necessary to reduce it
What is Risk Tolerance?
The degree of variability in investment returns that an individual is willing to withstand
What is Risk Threshold?
The amount of risk that is acceptable to an organization
What is Risk Aversion?
Is the reluctance of a person to accept the risk
What is the purpose of Plan Risk Management?
Deciding how to approach, plan and execute the risk management activities for a project
What are the plan risk management inputs?
(Planning)
- Project Management Plan
- Project Charter
- Stakeholder Register
- Enterprise Env Factors
- Organizational Process Assets
What are the plan risk management tools and techniques?
- Analytical techniques
- Expert Judgement
- Meetings
What are the plan risk management outputs?
Risk Management Plan
Whats included in the Risk Management Plan?
- Methodology
- roles and responsibilities
- budgeting
- timing
- risk categories
- definition of risk probability and impact
- probability and impact matrix
- reporting formats
- tracking
- stakeholders risk tolerances
What is the process of Identify Risks?
Identifying and documenting characteristics of risk that might affect the project
Define Qualitative Risk Analysis?
(planning process group)
Prioritizing risks and assessing their probability of occurrence and impact. Subjective in nature (low, med, high)
Define Quantitative Risk Analysis?
(Planning process group)
Performed on risks that have been prioritized by the perform qualitative analysis. It analyzes the effect of those risk events and assigns a numerical rating.
Define Plan Risk Responses?
The process of developing options and actions to enhance the opportunities and to reduce threats to project objectives.
What are the strategies of Negative Risk?
- Avoidance
- Transfer/Deflection
- Mitigation
- Acceptance
- Escalate
What are the strategies of Positive Risk?
- Exploit
- Share
- Enhance
- Acceptance
- Escalate
What is Risk Avoidance?
Changing the project management plan to reduce the threat and protect project objectives
What is Risk Transfer/Deflection?
Shifting the negative impact of a threat and ownership of the response to a third party (i.e.. insurance on a car)
What is Risk Mitigation?
Reduce the probability and/or consequences of adverse risks to under acceptable thresholds. (i.e.. having an umbrella is mitigation against rain)
What is Risk Acceptance?
Passive or Active acceptance.
No change to the Project Management Plan
What is Risk Escalate?
Escalating project risks to a appropriate level based on the roles and responsibilities of the project manager and stakeholders
What is Risk Exploit?
Organization wishes to ensure that the opportunity is realized
What is Risk Share?
Allocate ownership to a third party to capture opportunity (i.e. joint ventures, alliances)
What Is Risk Enhance?
Modify the “size” of an opportunity by increasing probability and/or positive impacts
Define Implement Risk Responses?
(Executing Process Group)
Ensures that agreed-upon risk responses are executed as planned to address overall project risk exposure, minimize the project threats, and maximize the project opportunities.
Define Monitor Risks?
(Monitor & Controlling)
Process of monitoring the implementation of risk response plan, identifying and analyzing newly arising risks, keeping track of identified risks, residual risk, secondary risks, and the risk process effectiveness throughout the project
What is Secondary Risk?
Risks that arise as a direct result of implementing a risk response/primary risk response (ex: side effect)
What is Residual Risk?
Those that remain after avoidance, transference, or mitigation responses have been taken (ex: left over)
What is Fallback Plan?
Is Plan - B, if the risk has a high impact, or the primary response proves to be inadequate
