Risk Flashcards
What is risk
Risk regards the likelihood of a hazardous event
An event that if happens has consequences
Can be measured
Outcomes are known and managed through controls
Risks have probability of occurrence
What are the different types of risk
Known-knowns
Known-unknowns
Unknown-knowns
Unknown-unknowns
Main sources of risk
PEST facets
Safety
Project complexity
Resources
Third party risks
Client risks
Contractor risks
What is RM
Formal process of risk identification to inform there allocation and management activities
Formal, structured approach for identifying and managing risks to minimise their impact
What is the RM process
Risk identification
Risk quantification and analysis
Response
Monitoring
Control and review
What are risk controls
Measures put in place to decrease likelihood or consequence of an unwanted event
They prevent unwanted events or reduce their effects
Key inputs in assessing the right risk to take and their required controls
Analyse situation to take right risks
Identify critical factor in process
Decide right risk
Setup controls and actions to manage
Manage risk properly
Monitor and provide feedback
Risk control measures
Risk avoidance
Safeguarding business’ assets from risk - preventative
Risk transfer
Passing risks across business areas or onto other parties
Risk mitigation
Reducing impact or likelihood of risk
Risk acceptance
Understanding and accepting chance of risk occurring and it’s consequences
Risk deferral
Putting risks back where possible e.g. weather risks with project programmes
Three types of risk
Hazard
Control / uncertainty
Opportunity
Preparation for uncertainty
Collect and analyse information
Prepare contingency plans
Execute and continue planning
Three strategic approaches to risk
Shape the future
Prescriptive
Adapt to the future
Prescriptive & reactive
Reserve the right to play
Highly reactive
What is uncertainty
Lack of information or knowledge about a future event or impact
Cannot be measured
Relatively uncontrollable given unknown outcomes
Cannot calculate probability
Tools and techniques for risk identification
Check lists
Structured reviews (team reviews)
Risk audit interviews (one to one from management)
Brainstorming
Previous experience / lessons learned
What is sensitivity analysis
Method of assessing the impact of individual variables on the whole project
Carried out as what-if analysis for major risks
Main weakness is that variables are treating in isolation
What is probabilistic analysis
Specifies a probability distribution for each risk e.g. Monte Carlo simulation
