Project Risk Management

Probability and Impact Matrix

A grid for mapping the probability of occurrence of each risk and its impact on project objectives if that risk occurs

Risk Category

A group of potential causes of risk

Risk Breakdown Structure (RBS)

A hierarchical representation of potential sources of risks

Risk Review

A meeting to examine and document the effectiveness of risk responses in dealing with overall project risk and with identified individual project risks

Threat

A risk that would have a negative effect on one or more project objectives

Opportunity

A risk that would have a positive effect on one or more project objectives

Tornado Diagram

A special type of bar chart used in sensitivity analysis for comparing the relative importance of the variables

Risk Audit

A type of audit used to consider the effectiveness of the risk management process

Risk Exposure

An aggregate measure of the potential impact of all risks at any given point in time in a project, program, or portfolio

Management Reserve

An amount of the project budget or project schedule held outside of the performance measurement baseline (PMB) for management control purposes, that is reserved for unforeseen work that is within scope of the project

Sensitivity Analysis

An analysis technique to determine which individual project risks or other sources of uncertainty have the most potential impact on project outcomes, by correlating variations in project outcomes with variations in elements of a quantitative risk analysis model

Contingency

An event or occurrence that could affect the execution of the project that may be accounted for with a reserve

Project Risk Management

It includes the processes of conducting risk management planning, identification, analysis, response planning, response implementation, and monitoring risk on a project

Fallback Plan

Fallback plans include an alternative set of actions and tasks available in the event that the primary plan needs to be abandoned because of issues, risks, or other causes

Risk Categorization

Organization by sources of risk (e.g. , using the RBS), the area of the project affected (e.g., using the WBS), or other useful category (e.g. , project phase) to determine the areas of the project most exposed to the effects of uncertainty

Contingent Response Strategies

Responses provided which may be used in the event that a specific trigger occurs

Risk Data Quality Assessment

Technique to evaluate the degree to which the data about risks is useful for risk management

Risk Appetite

The degree of uncertainty an organization or individual is willing to accept in anticipation of a reward

Risk Management Plan

A component of the project, program, or portfolio management plan that describes how risk management activities will be structured and performed

Risk Report

A project document developed progressively throughout the Project Risk Management processes, which summarizes information on individual project risks and the level of overall project risk

Reserve

A provision in the project management plan to mitigate cost and / or schedule risk. Often used with a modifier (e.g. management reserve, contingency reserve) to provide further detail on what times of risk are meant to be mitigated

Risk Register

A repository in which outputs of risk management processes are recorded

Risk Mitigation

A risk response strategy whereby the project team acts to decrease the probability of occurrence or impact of a threat

Risk Avoidance

A risk response strategy whereby the project team acts to eliminate the threat or protect the project from its impact

Risk Exploiting

A risk response strategy whereby the project team acts to ensure that an opportunity occurs

Risk Enhancement

A risk response strategy whereby the project team acts to increase the probability of occurrence or impact of an opportunity

Risk Sharing

A risk response strategy whereby the project team allocates ownership of an opportunity to a third party who is best able to capture the benefit of that opportunity

Risk Acceptance

A risk response strategy whereby the project team decides to acknowledge the risk and not take any action unless the risk occurs

Risk Transference

A risk response strategy whereby the project team shifts the impact of a threat to a third party, together with ownership of the response

Risk Escalation

A risk response strategy whereby the team acknowledges that a risk is outside of its sphere of influence and shifts the ownership of the risk to a higher level of the organization where it is more effectively managed

Secondary Risk

A risk that arises as a direct result of implementing a risk response

Reserve Analysis

An analytical technique to determine the essential features and relationships of components in the project management plan to establish a reserve for the schedule duration, budget, estimated cost, or funds for a project

Trigger Condition

An event or situation that indicates that a risk is about to occur

Risk

An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives

SWOT Analysis

Analysis of strengths, weaknesses, opportunities and threats of an organization, project, or option

Overall Project Risk

The effect of uncertainty on the project as a whole, arising from all sources of uncertainty including individual risks, representing the exposure of stakeholders to the implications of variations in project outcome, both positive and negative

Risk Threshold

The level of risk exposure above which risks are addressed and below which risk may be accepted

Risk Owner

The person responsible for monitoring the risks and for selecting and implementing an appropriate risk response strategy

Identify Risks

The process of identifying individual risks as well as sources of overall risk and documenting their characteristics

Implement Risk Responses

The process of implementing agreed-upon risk response plans

Monitor Risks

The process of monitoring the implementation of agreed-upon risk response plans, tracking identified risks, identifying and analyzing new risks, and evaluating risk process effectiveness throughout the project

Tolerance

The quantified description of acceptable variation for a quality requirement

Residual Risk

The risk that remains after risk responses have been implemented

Contingency Reserve

Time or money allocated in the schedule or cost baseline for known risks with active response strategies