Risk Management Flashcards
an uncertain event that may affect the project’s triple constraint (Scope, Time, Cost)
It can be a threat to be avoided (negative event)
It can be an opportunity to be exploited (positive event)
It can be internal to the organization or arising from external factors beyond the control of the organization
It can be limited to certain activities or general to the project
Risk
must understand how to anticipate and identify areas of risk, how to quantify and qualify them, and how to plan for them
The PM
PM objective is to increase the probability and impact of ________ and decrease the probability and impact of events adverse to the project
positive events
The three elements of risk
- The perception that something could happen
- The likelihood or probability of something happening
- The consequences if it happens (Impact)
Risk equation
Probabilty x Impact
A condition or situation unfavorable to the project or any of its deliverables.
A set of circumstances or events of negative impact on the project objectives.
Threat
A condition or situation favorable to the project or any of its deliverables.
A set of circumstances or events of positive impact on the project objectives.
Opportunity
The process of identifying, allocating, quantifying, analyzing, and responding to the risk (opportunity or threat) in order to maximize (in case of opportunity) or minimize (in case of threat) its probability and impact.
Risk management
“Though the decline in failure rate is consistent across the board, Transportation and Construction remain the worst industries with failure rates ________ higher than the U.S. average.”
60% to 80%
Cost of wrong decisions in pharmaceutical industry is passed to ________.
consumers
Dry hole cost in oil and gas industry is passed to ________.
motorists
Wrong policy decisions by government will be passed to __________.
taxpayers
You paint your deck without properly removing old paint.
You have to paint it again next year
Choose to leave ropes behind to move quick on a glacier and you may not EVER
leave the glacier
Insufficient Knowledge – 36%
Underestimation of influence – 16%
Ignorance, carelessness, neglect – 14%
Forgetfulness – 13%
Relying upon others without sufficient control – 9%
Objectively unknown situation – 7%
Other factors related to human error – 5%
Human error factors
A study by Swiss Federal Institute of Technology in Zurich analyzed ___ cases of structural failures where engineers were at fault. In these incidents 504 people were killed, 592 injured and millions of dollars of damage incurred.
800
- Risk Management Planning
- Risk Identification
- Qualitative Risk Analysis
- Quantitative Risk Analysis
- Risk Response Planning
- Risk Monitoring and Control
6 steps of risk management
The Risk Management Plan describes:
- How risks are defines
- How risks will be monitored
- How the risks will be controlled throughout the project
Risk Inputs
- Brainstorming
- Delphi Technique
- Nominal Group Technique
- Interviewing
- Checklists
- Assumption Analysis
- Diagramming Techniques
most common, all in a room at the same time
Brainstorming
similar to brainstorming but generally not in the same room and often anonymously
Delphi Technique
cross between brainstorming and Delphi, participants in the same room but use a medium such as post-it notes
Nominal Group Technique
Q&A with participants and even other PM’s with previous experience
Interviewing
based on historical information
Checklists
