Risk Mangement Flashcards
What are some benefits of project risk management?
- Proactive (rather than reactive) approach
- Reduction of surprises and negative consequences
- Prepares the project manager to capitalize on opportunities
- Provides better control of future events
- Improves chances of reaching project performance objectives within budget and on time
What is the objective of project risk management?
To increase the likelihood and and impact of positive events, and decrease the likelihood and impact of negative ones
Qualitative risk analysis
The process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.
Quantitative risk analysis
The process of numerically analyzing the effect of identified risks on overall project objectives
Risk responses
The process of developing options and actions to enhance opportunities and to reduce threats to project objectives
Controlling risks
- Implementing risk response plans
- Tracking identified risks
- Monitoring residual risks
- Identifying new risks
- Evaluating risk process effectiveness throughout the project
Difference between risks and issues?
- Issues are well defined, can be predicted and planned for
- Risks are uncertainties which can’t be predicted and are hard to plan for
Tools and techniques for identifying risks
- Brainstorming
- Delphi technique
- 1-on-1 interviews
- Funnel analysis
- SWOT analysis
- Strengths, Weaknesses, Opportunities, Threats
- Checklist
- Assumption analysis
- Diagramming techniques
- Cause & effect (Ishikawa/Fishbone)
- Process flowcharts
Monte Carlo methods
Computational algorithims that rely on repeated random sampling to obtain numerical results
Risk response strategies
- Avoid
- Extend schedule, reduce scope, change project, etc.
- Transfer
- Insurance, cost-plus or fixed price contracts, etc.
- Mitigate
- Reduce probability or impact
- Accept
- Passive
- No action, just document
- Active
- Set up a contingency
- Passive
Positive risk (opportunities) strategies
- Exploit
- Ensure opportunity is realized (drive resources towards)
- Share
- Move ownership to a third party to capture the opportunity
- Enhance
- Modify size of opportunity by
- Accept
Secondary risk
Risk that arises as a direct outcome of implementing a risk response
Workaround
Response to a negative risk that has occured (unplanned; not a contingency)
Residual risk
Risks that are expected to remain even after planned responses have been taken. These risks are deliberately accepted.
Tools and techniques for monitoring and controlling risk
- Status meetings
- Variance and trend analysis, and technical performance measurements
- Compare planned vs. actual
- Regular risk audits
- Risk reassessment
- Reserve analysis
