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Project Risk Management (Processes (PLANNING (Process: Plan risk…
Project Risk Management
can help improve project success by helping select good projects, determining project scope, and developing realistic estimates
Negative Risk
involves understanding potential problems that might occur in the project and how they might impede project success
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The goal of project risk management is to minimize potential negative risks while maximizing potential positive risks
Risk Utility
Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential payoff
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Those who are risk-seeking have a higher tolerance for risk and their satisfaction increases when more payoff is at stake
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Processes
PLANNING
- Process: Plan risk management
Outputs: Risk, management plan
- Process: Identify risks
Outputs: Risk register
- Process: Perform qualitative risk analysis
Outputs: Project documents updates
- Process: Perform quantitative risk analysis
Outputs: Project documents updates
- Process: Plan risk responses
Outputs: Project management plan updates, project
documents updates project documents updates
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Determining which risks are likely to affect a project and documenting the characteristics of each
Identifying risks is the process of understanding what potential events might hurt or enhance a particular project
Output: Risk Register
A document that contains the results of various risk management processes and that is often displayed in a table or spreadsheet format
A tool for documenting potential risk events and related information
Risk Register Contents:
- An identification number for each risk event
- A rank for each risk event
- The name of each risk event
- A description of each risk event
- The category under which each risk event falls
- The root cause of each risk
- Triggers for each risk; triggers are indicators or symptoms of actual risk events
- Potential responses to each risk
- The risk owner or person who will own or take responsibility for each risk
- The probability and impact of each risk occurring.
The status of each risk
Risk Identification Tools:
- Brainstorming
- The Delphi Technique
- Interviewing
- SWOT analysis
- Performing qualitative risk analysis
Prioritizing risks based on their probability and impact of occurrence
Assess the likelihood and impact of identified risks to determine their magnitude and priority
Risk Quantification tools and techniques:
- Probability/impacts matrices
- The Top Ten Risk Item Tracking
- Expert judgement
- Watch list
- Performing Quantitative risk analysis
Numerically estimating the effects of risks on project objectives
Large, complex projects involving leading edge technologies often require extensive quantitative risk analysis
Main Technique include:
- Decision tree analysis
- Simulation
- Sensitivity analysis
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- Monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating the effectiveness of risk strategies throughout the life of the project
- Involves executing the risk management process to respond to risk events and ensuring that risk awareness is an ongoing activity performed by the entire project team throughout the entire project
Main outputs of risk control are:
- Work performance information
- change requests
- updates to the project management plan, other project
- documents, and organizational process assets
- Residual risks are risks that remain after all of the response strategies have been implemented
- Secondary risks are a direct result of implementing a risk response
Workarounds are unplanned responses to risk events that must be done when there are no contingency plans