Project Risk Management

Question 1

What are the two ways risk can be attached to projects?

Answer 1

1. Risks associated with whether the project is the best tactic to deliver the strategy
2. Risks associated with delivering the project on time, to budget and to specification (project risk management)

Question 2

What type of risk is PRM primarily concerned with?

Answer 2

Control risk - variance, uncertainty or deviation from expected outcomes

Question 3

In what ways can PRM be used to identify opportunities?

Answer 3

Identifying ways to reduce the cost, deliver the project earlier or improve the quality of the project’s output.

Question 4

What new things or process enhancements might a project deliver?

Answer 4

Construction projects
Products
IT systems
Technology
Markets to achieve a business advantage

Question 5

The goal of a project is to deliver on time, in budget and with the required quality. What two elements contribute the ‘Quality’ deliverable?

Answer 5

Specification

Performance

Question 6

Does PRM only deal with control risks?

Answer 6

No, it also incorporates management of hazard and opportunity risks

Question 7

What are the 4As of PRM responses?

Answer 7

ACCEPT risk/uncertainty (low exposure, low uncertainty)
ADAPT activities/procedures (high exposure, low uncertainty)
ADOPT contingency plans (low exposure, high uncertainty)
AVOID risk (high exposure, high uncertainty)

Question 8

Describe how the bow-tie method would apply to project risk

Answer 8

Source = stages of project (IPEC)
Project risk = uncertainties
Impact = Quality, Cost, Time and Compliance

Question 9

What are the IPEC stages of the project lifecycle?

Answer 9

Inception
Planning
Execution
Closure

Question 10

What does the inception stage of a project involve?

Answer 10

Feasibility study
Outline cost plan
Appointments

Question 11

What does the Planning stage of the project life cycle involve?

Answer 11

Detailed design
Scheduling
Procurement

Question 12

What does the Execution stage of the project life cycle involve?

Answer 12

Construction
Cost reporting
Quality check

Question 13

What does the Closure stage of the project life cycle involve?

Answer 13

Handover

Project review

Question 14

What arrangement should be considered when managing project risks?

Answer 14

Differing uncertainties at each stage (a process for each may be required)

Arrangements for dealing with changes and deviations

Question 15

Describe the correlation between, on one hand, the cost of changes, and on the other, stakeholder influence, risk and uncertainty, through the project life cycle

Answer 15

As the project progresses through it’s stages:

The cost of changes rises, and most steeply in the Execution and Closure stages

Meanwhile stakeholder influence, risk and uncertainty decline, and most steeply in the Execution and Closure stage.

Question 16

Some organisations use the “Project Triangle” to manage project risks. What is the fourth element that is subject to risk assessment in this method?

Answer 16

Tactics that gave rise to the project.

Question 17

What are the risk activities associated with projects?

Answer 17

Making RM part of the project
Identifying risks early in the project
Communicating risk info
Consideration of both threats and opportunities
Clarification of ownership
Prioritisation of risks
Analysis of risks
Planning and implementing risk responses
Logging project risks on a RR
Tracking risks and associated actions

Question 18

What opportunities are offered by successful project delivery?

Answer 18

Achievement of strategic objective

Reduction of risks to output, efficiency or quality

Question 19

What are the opportunities within a project?

Answer 19

Change of specification to improve performance or reduce costs/time taken to deliver

Question 20

Project Risk Analysis and Management (PRAM) is applied to which 5 phases of a project?

Answer 20

1. Feasibility
2. Sanction
3. Tendering
4. Post-tender
5. During implementation

Question 21

Describe six observations of the PRAM model for project risk assessment

Answer 21

1. Greater likelihood of successful delivery
2. Data associated with risk assessed statistically
3. No two projects are the same
4. Often things go wrong unique to a project, industry or working environment
5. Usually a lack of historical data
6. Systematic approach due to technical, engineering, innovation or strategic nature. Less dependence on intuition.