Risk Management: Project Risk Management is the group of processes that enable an organization to plan risk management, identify, qualify, quantify risks, and take appropriate actions to manage the risks.
For the Exam: understand that risk has two characteristics - it is related to an uncertain event & may affect the project positively or negatively.
Risk Management Process:
Plan Risk Management
Identify Risks
Qualitative Analysis
Quantitative Analysis
Plan Risk Responses
Control Risks
Plan Risk Management: Is the
process of defining how to conduct risk management activities for a project. The key output is a Risk Management Plan.
Inputs:
Project Management Plan
Project Charter
Stakeholder Register
EEFs
OPAs
Tools:
Analytical Techniques
Expert Judgement
Meetings
Outputs:
Risk Management Plan: This is the sole output of this process. It is a roadmap for the other five management processes. Defining what level of risk will be tolerable, how risk will be managed, who will be responsible for risk activities and how findings will be communicated.
The risk breakdown structure is another important part, this is a risk categorization tool similar to the WBS.
Identify Risks: It is the process through which the project team identifies/ determines
which potential risks may affect a project’s objectives including scope, time, cost, quality. Participants in risk identification activities should include the project team members, and may also include other SMEs from outside the project team.
Tools & Techniques to identify risks include document analysis, brainstorming, root cause analysis, cause & effect techniques, and others.
The major output of this process is a Risk Register, which is a document that outlines identified project risks, progressively elaborated as
the project progresses.
Inputs:
Risk Management Plan
Cost Management Plan
Schedule Management Plan
Quality Management Plan
Human Resource Management Plan
Scope Baseline
Activity Cost Estimates
Activity Duration Estimates
Stakeholder Register
Project Documents
EEFs
OPAs
Tools:
Documentation Reviews
Information Gathering techniques
Checklist Analysis
Assumption Analysis
Diagramming Techniques
SWOT Analysis
Expert Judgement
Output:
Risk Register: The Risk Register provides a list of all identified risks on the project,
what the possible reactions to this risk are, what the root causes are, and what categories the risks fall into.
Perform Quantitative Risk Analysis: This process seeks to assign a value in cost and / or time, to quantify risks that have been ranked and
prioritized during the perform quantitative risk analysis process.
It is up to the PM to determine if, how
long, and the level of detail with which this process should be performed.
Perform Qualitative Risk Analysis: This is the process to determine which identified risks are the highest priority on the project.
The process of prioritization places identified risks on a probability and impact matrix (PIM). The output in this process are prioritized risks updated in the risk register.
Inputs:
Risk Management Plan
Scope Baseline
Risk Register
EEFs
OPAs
Tools:
Risk Probability & Impact Assessment / Probability & Impact Matrix
Risk Data Quality Assessment
Risk Categorization
Risk Urgency Assesment
Expert Judgement
Outputs:
Project Document Updates
Inputs:
Risk Management Plan
Cost Management Plan
Schedule Management Plan
Risk Register
EEFs
OPAs
Tools:
Data gathering & Representation Techniques Such as:
Probability Distributions
Interviewing
Quantitative Risk Analysis & Modeling techniques:
Sensitivity Analyisis
Expected Monetary Value Analysis
Decision Tree Analysis
Tornado Diagrams
Modeling & Simulation
Expert Judgement
Outputs:
Project Documents Updates
Plan Risk Responses: This process creates a detailed plan for managing risks.
Inputs:
Risk Management Plan
Risk Register
Tools:
Strategies for Negative Risks or Threats:
Strategies for Positive Risks or Opportunities:
Avoid
Transfer
Mitigate
Accept
Exploit
Share
Enhance
Accept
Contingent Response Strategies
Expert Judgement
Outputs:
PM Plan Updates
Project Document Updates
Control Risks: Is a monitoring & control process that looks over the plans and execution that has taken place and compares them. Corrective action is then taken by modifying the plan or way of execution
Inputs:
PM Management Plan
Risk Register
Work Performance Data
Work Performance Reports
Tools:
Risk Re-assesment
Risk Audits
Variance & Trend Analysis
Technical Performance Measurements
Reserve Analysis (Contingency)
Meetings
Outputs:
Work Performance Information
Change Requests
PM Plan Updates
Project Document Updates
OPAs
