Project Management Chapter 11
Risk identification tools
brainstorming, The Delphi Technique, Interviewing, SWOT analysis
monitoring risk
ensuring the appropriate risk response are preformed, tracking identified risk, identifying, and analyzing new risk, and evaluating effectiveness o risk management throughout the entire project
risk seeking people
have a higher tolerance for risk and their satisfaction increases when more payoff is at stake
SWOT analysis
helps identify the broad negative and positive risks that apply to a project
Implementing risk response
implementing the risk response plan
Managing Negative Risk
involves a number of possible actions that project managers can take to avoid, lessen, change or accept the potential effects of risk on their projects
Probability/Impact Matrix or Chart
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
Risk Escalation
notifying a higher level of authority
Contingency plans
predefined actions that the project team will take if an identified risk event occurs
The Delphi Technique
used to derive a consensus among a panel of experts who make predictions about future developments. repeated rounds of questioning and written responses and avoids the biasing effects possible in oral methods, such as brainstorming
Known risk
used to describes risks that the project team has identified and analyzed
Utility
what rises at a decreasing rate for people who are risk averse
Qualitative risk analysis
- assessing the likelihood and impact of identified risk to determine their magnitude and priority
Quantitative Risk Analysis
- follows qualitative risk analysis, both of them can be done together. - Large, complex projects involving leading-edge technologies often require qualitative risk analysis.
Risk Management Plan
A plan that documents the procedures for managing risk throughout a project
Risk Enhancement
Changing the size of an opportunity by identifying and maximizing key drivers of the positive risk
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
risk exploitation
Doing whatever you can to make sure a positive risk happens
Management reserves
Funds held for unknown risks that are used for management control purposes
Broad categories of risk
Market, financial, technology, People, Structure/process
Performing quantitative risk analysis
Numerically estimating the effects of risk on project objectives
Performing qualitative risk analysis
Prioritizing risks based on their probability and impact of occurrence
Contingency reserves or allowances
Provisions held by the project sponsor or organization to reduce the risk of cost or schedule overruns to an acceptable level
Risk Mitigation
Reducing the impact of a risk event by reducing the probability of its occurrence
Main strategies for negative risks
Risk avoidance, risk acceptance, risk transference, risk mitigation, risk escalation
Risk transference
Shifting the consequence of a risk and responsibility for its management to a third party
Planning risk responses
Taking steps to enhance opportunities and reduce threats to meeting project objectives
Workarounds
Unplanned responses to risk events that must be done when there are not contingency plans
risk register
a document that contains the results of various risks management processes and that is often displayed in a table or spreadsheet format, a tool for documenting potential risk events and related information
Interviewing
a fact-finding technique for collecting information in face-to-face, phone, email, or instant messaging discussions
Watch List
a list of risks that are low priority, but are still identified as potential risks
Top Ten Risk Item Tracking
a qualitative risk analysis tool that helps to identify risks and maintain an awareness or risks throughout the life of a project
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 judgement
Risk acceptance
accepting the consequences if a risk occurs
risk-neutral approach
achieves a balance between risk and payoff
risk shifting
allocating ownership of the risk to another party
Risk register contents
an identification number of each risk event, a rank of each risk event, a description of each risk event, the category under which each risk even falls, the root cause of each risk, triggers for each risk, potential responses to each risk
Risk
an uncertainty that can have a negative or positive effect on meeting project objectives
Risk avoidance
eliminating a specific threat its causes
Risk Events
refer to specific, uncertain events that may occur to the detriment or enhancement of the project
positive risks strategies
risk exploitation, risk sharing, risk enhancement, risk acceptance, risk escalation
Unknown risks
risks that have not been identified and analyzed, cannot be managed
Positive risks management
that result in good things happening, sometimes called opportunities
Risk utility or risk tolerance
the amount of satisfaction or pleasure received from a potential payoff
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