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