Risk & Issue Management Flashcards
What is Risk?
Something that might occur, and if it does, will impact on the project’s objectives of time, cost and quality. Risks can be threats (-ve) and opportunities (+ve)
What is the Risk Management Plan?
- The way in which risk is to be managed in a project
- Defines how all the risk processes will be carried out
- Does not consider individual risks
What are the Contents of the Risk Management Plan?
- Methodology & data sources
- Roles & responsibilities
- Budgeting for risk management
- Timing i.e. when risk assessment will be carried out
- Qualitative & quantitative scoring methods
- Risk thresholds
- Reporting format
- How risks will be tracked
What are the 5 Steps in the Risk Management Process?
- Initiate
- Identify
- Assess
- Plan Responses
- Implement Responses
Describe the Initiate Phase in Risk Management
Activity of setting up the process such as deciding on risk categories and tools/techniques to be used.
Organising the team to carry out risk management
Describe the Identify Phase in Risk Management
- Brainstorming - with project team and appropriate stakeholders
-
SWOT Analysis
- S&O = +ve
- W&T = -ve
- Assumptions Analysis - looking at assumptions made in planning to see if any constitute a risk
- Constraints Analysis - as above for project constraints
- Using WBS - identify risks that apply to individual work packages
- Interviews - people with knowledge or insight
- Delphi - controbutors remote from and external to project team
What is the Risk Assessment Phase?
- Prioritise identified risks
- Establish key risks which need management focus
- Based on determining probability and impact
- Probability & Impact grid simple but effective tool to prioritise risk - qualitative method
- For full and proper assessment, quantitative method must be used
- Often simply apply scale of 1-5 to impact and probability
- Exposure = probability x impact
Plan Responses Phase - what are the 5 strategies for responding to -ve risks or threats?
- Avoid - by not doing something / doing in a different way (Proactive)
- Transfer - liability or ownership to someone else such as client or sibcontractor (Proactive)
- Reduce/Mitigate - if risk cannot be avoided or too large to accept, must take steps to reduce probablity and/or impact (Reactive)
- Accept - take on board and accept consequences (Reactive)
- Contingency Planning - alterntive plan to implement if risk occurs (Reactive)
Plan Responses Phase - what are the 4 responses to +ve opportunities?
- Exploit - by trying to eliminate the uncertainties surrounding the opportunity
- Share - if you do not have resources to exploit yourself, find partner to share it
- Enhance - work to increase probability and impact
- Accept - wait and see what happens
What is the Risk Register?
- As risks identified, must be recorded in a risk register/log
- Lists all identified risk events
- Will contain the following for each risk:
- Description
- Owner
- Possible impact on time, scope, cost, quality & BC
- Probability
- Mitigation strategy
- Cost of mitigation
- Residual impact after mitigation
- Current status
What are the Benefits of Managing Risk?
- Increased understanding by project leads to more realistic plans and greater probability of delivering to them
- Increased understanding of risks leads to their minimisation
- Less chance of surprises
- Team view of risks can lead to more objective decision making
- Financially/technically risky projects can be identified and discouraged
- Better understanding of project by Stakeholders = more confidence in PM
- Focuses attention on most significant threats to the project
What is Issue Management?
An issue arises when a PM is presented with a problem that he/she is unable to resolve. He/she will escalate to Sponsor, at which point it becomes an issue.
Some issues may result in formal changes that require the Change Control Process to be inviked.
Not all issues will result in change but all must be managed and it is important to have formal issue management in place
What are the 7 Stages of the Issue Management Process?
- Identification - problem arises, PM can’t resolve
- Issue Logged
- Evaluation - PM evaluates to understand possible impact
- Escalation - Sponsor either owns or delegates to steering committee member
- Response - Owner identifies and implements to mitigate
- Monitoring - Owner monitors and reports back
- Resolution
Benefits of Issue Management
- Established process for upward escalation
- Issues are escalated to the person best able to solve them
- All open issues are tracked so status is always visible and issues do not go unaddressed
- Stakeholders are kept aware of the status of all open issues
- The requirement of good Governance is satisfied by having robust issue management
