Project Management Chapter 11

Risk Breakdown Structure

A hierarchy of potential risk categories for a project.

Risk Management Plan

A plan that documents the procedures for managing risk throughout a project.

Risk Transference

A risk management and control strategy that involves the contractual shifting of a pure risk from one party to another.

Brainstorming

A technique by which a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgment.

Project Risk

An uncertainty that can have a negative or positive effect on meeting project objectives.

Planning Risk Management

Deciding how to approach and plan the risk management activities for the project.

Identifying Risks

Determining which risks are likely to affect a project and documenting the characteristics of each.

Fallback Plans

Developed for risks that have a high impact on meeting project objectives, and are put into effect if attempts to reduce the risk are not effective.

Management Reserves

Funds held for unknown risks.

Risk Factors

Numbers that represent the overall risk of specific events based on their probability of occurring and the consequences to the project if they do occur.

Residual Risks

Risks that remain after all of the response strategies have been implemented.

Positive Risks

Risks that result in good things happening

Risk Events

Specific, uncertain events that may occur to the detriment or enhancement of the project.

Triggers

Symptoms of actual risk events.

Planning Risk Responses

Taking steps to enhance opportunities and reduce threats to meeting project objectives.

Risk Mitigation

Taking steps to reduce adverse effects of risk.

Risk Tolerance (Risk Utility)

The amount of satisfaction or pleasure received from a potential payoff.

Negative Risks

Understanding potential problems that might occur in the project and how they might impede project success.

Delphi Technique

Used to derive a consensus among a panel of experts who make predictions about future developments.

Decision Tree

A diagramming analysis technique used to help select the best course of action in situations in which future outcomes are uncertain.

Secondary Risks

A direct result of implementing a risk response.

Risk Register

A document that contains the results of various risk management processes and that is often displayed in a table or spreadsheet format.

Probability/Impact Matrix

Lists the relative probability of a risk occurring on one side of a matrix or axis on a chart and the relative impact of the risk occurring on the other.

Controlling Risk

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.

Performing Quantitative Risk Analysis

Numerically estimating the effects of risks on project objectives.

Contingency Plans

Predefined actions that the project team will take if an identified risk event occurs.

Performing Qualitative Risk Analysis

Prioritizing risks based on their probability and impact of occurrence.

Contingency Reserves

Provisions held by the project sponsor or organization to reduce the risk of cost or schedule overruns to an acceptable level.

Monte Carlo Analysis

Simulates a model's outcome many times to provide a statistical distribution of the calculated results.

Project Risk Management

The art and science of identifying, analyzing, and responding to risk throughout the life of a project and in the best interests of meeting project objectives.

Risk Acceptance

The cost of managing a certain type of risk is accepted, because the risk involved is not adequate enough to warrant the added cost it will take to avoid that risk.

Risk Avoidance

The elimination of hazards, activities and exposures that can negatively affect an organization's assets.

Risk

The possibility of loss or injury.

Estimated Monetary Value (EVM)

The product of a risk event probability and the risk event's monetary value.