Project Risk Management Flashcards
Project Risk Management
The art and science of understanding potential problems that might occur on the project and how they might impede project success
Goal of project risk management:
Minimize potential risks while maximizing potential opportunities
Risk Management’s Benefits
- A proactive rather than reactive approach
- Reduces surprises and negative consequences
- Prepares the project manager to take advantage of appropriate risks
- Provides better control over the future
- Improves chances of reaching project objectives within budget and on time
The Risk Management Process
- Risk Identification
- Risk Assessment
- Risk Response Development
- Risk Response Control
Risk Tolerance & Utility
- Risk Averse - Utility rises at a decreasing rate
- Risk Seeker - The level of satisfaction increases when more payoff is at stake
- Risk Neutral - Try to achieve a balance between risk and payoff
Risk Response Planning
Involves developing options and actions to enhance opportunities and reduce threats to project objectives
Risk Response
- Mitigating Risk - Reducing the likelihood an adverse event will occur, reducing impact of adverse event
- Transferring/Sharing risk - paying a premium to pass the risk to another party
- Avoiding Risk - changing the project plan to eliminate risk or condition
- Retaining risk - accept the risk
Risk Monitoring and Control
Monitoring known risks
Identifying new risks
Reducing risks
Evaluating the effectiveness of risk reduction
The main outputs of risk monitoring and control are:
- Corrective action
- Project change requests
- Updates to other plans
Types of Scope - Scope creep and feature creep
- Scope creep - subtle but significant increase in the requirements and expectations of a project
- Feature creep - the uncontrolled addition of technical features to a system under development
Tasks Workers
Experts
Project Managers
Task workers create estimates
Experts review estimates
PM’s approve them
