Unit 10: Understand risk and issue management in the context of project management

Question 1

10.1 - Explain 3 stages in a risk management process

Answer 1

1. Identification

This stage in the process is to use various techniques to identify risks such as Brainstorming and SWOT analysis.
The aim of this stage is for the PM to identify as many risks as possible. Once identified, risks should be documented on a risk register. The risk register should include: the risk description, the cause, the probability of it occurring, the impact if it occurs, mitigation actions, a fullback / contingency, and the current status. A risk owner is also allocated - this should be the project team member best skilled to assess and mange that particular risk.

2. Analysis - This stage will analyse each risk in order to assess the relative severity. To do this, the PM will usually score the risk between 1-5 for the probability of it occurring and between 1-5 for the impact it would cause tot he project should it occur. The relative severity is calculated by multiplying the probability score with the impact score.
3. Response - This stage considers the most appropriate response that could be put into place to deal with the risk.
   The response could be proactive or reactive, taking into consideration if the risk is a threat or opportunity.
   Proactive responses could be to avoid or reduce a threat or exploit or enhance an opportunity.
   Reactive responses could include making provision of a contingency budget - on the basis that the risk can be accepted and managed this way.

Question 2

10.2 - Explain 2 responses that may be used to proactively manage an opportunity / threat

Answer 2

Avoid a threat - this seeks to eliminate the risk by changing the course of the project. This often changes the scope. e.g. a new technical solution release to market has been delayed so another solution is considered.

Reduce a threat - mitigative actions are considered and implemented to either reduce the probability or the impact of the threat occurring.

Exploiting an opportunity - exploring the opportunity and implementing a response to gain maximum benefit for the project.

Enhancing the opportunity -

Question 3

10.3

Explain 2 benefits of risk management to the sponsoring organisation

Answer 3

1. Better informed and more believable plans, schedules and budgets which increases stakeholder confidence in the project being delivered successfully.
2. Increases the likelihood of the project adhering to its schedules and budgets - by identifying risks, the PM and team can work together to understand mitigation control actions to overcome these uncertainties.

Question 4

10.4

Explain 3 steps in a issue management process

Explain 2 reasons why issues should be escalated

Answer 4

1. Log and analyse the issue
   The issue will be added to the issue register where it will be tracked through the issue management process. The issue will be analysed and prioritised. Priority will be based on the issue’s impact on the project output’s success criteria detailed in the business case.
2. Escalate the issue
   All issues get escalated to the project sponsor who may also escalate to the Steering Group for resolution. The best course of action will be defined to resolve the issue.
3. Assign actions
   Once the best way forward is identified, actions and deadlines will be allocated to the team member best placed to carry out the work.