Risk Management

  1. Risk Management
    Knowledge area with 6 processes that emphasize planning and evaluating the effectiveness of the plans. Risk includes all uncertainty, which could be bad news (negative risk) or good news (positive risk) for your project.

    • Processes:
    • - Plan Risk Management (planning)
    • - Identify Risks (planning)
    • - Perform Qualitative Risk Analysis (planning)
    • - Perform Quantitative Risk Analysis (planning)
    • - Plan Risk Responses (planning)
    • - Monitor & Control Risks (M&C)
  2. Plan Risk Management
    The goal of this first planning process within risk management is to create the risk management plan. This plan will shape how the team carries out the remaining risk processes.

    • Key Inputs
    • (none)

    • Key Tools
    • Planning Meetings & Analysis

    • Key Outputs
    • Risk Management Plan
  3. Identify Risks
    The second planning process of risk management works to create a risk register (a list of all possible risks that may affect the project).

    • Key Inputs
    • Activity Cost Estimates
    • Scope Baseline

    • Key Tools
    • Checklist Analysis
    • Diagramming Techniques

    • Key Outputs
    • Risk Register
  4. Perform Qualitative Risk Analysis
    Planning process of risk management performs a first assessment of the identified risks to determine which risks on the list "qualify" for further analysis. The team will then have a general ranking and prioritization of risks that might affect project results.

    • Key Inputs
    • (none)

    • Key Tools
    • Risk Probability and Impact Assessment / Probability and Impact Matrix

    • Key Outputs
    • (none)
  5. Perform Quantitative Risk Analysis
    Planning process of risk management that seeks to understand potential impact of each risk fully and assign specific rankings and cost and time estimates to risks.

    • Key Inputs
    • (none)

    • Key Tools
    • Probability Distributions
    • Quantitative Risk Analysis & Modeling Techniques

    • Key Outputs
    • (none)
  6. Plan Risk Responses
    Planning process of risk management that creates a plan for how each risk will be handled, detailing responses.

    • Key Inputs
    • (none)

    • Key Tools
    • Strategies for Negative Risks or Threats
    • Strategies for Positive Risks or Opportunities

    • Key Outputs
    • Risk-related Contract Decisions
  7. Monitor & Control Risks
    Monitoring and controlling process of risk management that looks back at performance, compared with the plan.

    The emphasis is on the risk plans. Are they effective? Are schedule and cost reserves adequate?

    • Key Inputs
    • (none)

    • Key Tools
    • Risk Reassessment
    • Risk Audits
    • Reserve Analysis

    • Key Outputs
    • (none)
  8. Reserve Analysis
    A tool of Monitor and Control Risks that evaluates schedule and budget reserves to make sure they are sufficient based on risk analysis performed for this project.

    • This tool is used in the following processes:
    • - Estimate Activity Durations (Time)
    • - Estimate Costs (Cost)
    • - Determine Budget (Cost)
  9. Risk Audits
    Tool of Monitor and Control Risks that focuses on the process of overall risk management.

    Audits look at the process instead of individual risk events.
  10. Risk Reassessment
    Tool of Monitor and Control Risks process that takes another look at the project environment to determine if more risks should be added to the risk register.
  11. Risk-Related Contract Decisions
    Output of Plan Risk Responses that is directly related to the tool of Transfer or Share.

    One group is transferring risk to another group by a form of agreement, such as an insurance policy or contract.

    Sharing may involve contracts or agreements between project partners.
  12. 4 Strategies of Positive Risks or Opportunities
    • - Share
    • - Exploit
    • - Enhance
    • - Accept

    Tool of Plan Risk Responses.
  13. 4 Strategies for Negative Risks or Threats
    • - Avoid
    • - Transfer
    • - Mitigate
    • - Accept

    Tool of Plan Risk Responses.
  14. Quantitative Risk Analysis & Modeling Techniques
    Tool of Perform Quantitative Risk Analysis with several subtopics:

    • - Sensitivity Analysis: Determining how sensitive the project is to a risk event
    • - Expert Judgement: Interviewing experts to mine their knowledge of a risk
    • - Expected Monetary Value: Assigns a likely dollar amount to risk events
    • - Decision Tree Analysis: Shows probabilities and results of risk events
    • - Simulation and Modeling: Monte Carlo is an example of this technique
  15. Probability Distributions
    Tool of Perform Quantitative Risk Analysis that uses mathematical representations to show the likelihood or probability of a risk event occurring.
  16. Risk Probability & Impact Assessment / Probability & Impact Matrix
    Tool of Perform Qualitative Risk Analysis to evaluate risks to help assign priorities.

    For each risk, assign the likelihood that the risk will occur and the impact if it does occur. Both values are given a relative ranking (low, medium, high) and combined to arrive at a risk score. These scores help set priorities with the list of risks.
  17. Risk Register
    A list of risks that may impact this project. It is created in the Identify Risks process. It becomes an input into 4 other risk management processes and is updated in each of these.

    • Risk Register is updated with:
    • - Descriptions
    • - Categories
    • - Ranking
    • - Cost Estimates
    • - Schedule impacts
    • - Contingency Plans
    • - Strategies selected
  18. Checklist Analysis
    Tool that provides structure to the Identify Risks process by referencing categories of risks from prior projects that should be considered here. It may use the RBS as a point of reference.
  19. Risk Management Plan
    A component of the project management plan created in Plan Risk Management. It determines how the team carries out the remaining risk processes.

    • Includes:
    • - What levels of risk are acceptable
    • - How risks will be managed
    • - Who will be responsible for risk related activities
    • - How risk findings will be communicated
    • - The risk breakdown structure (RBS), a decomposition of the risks into general categories.
  20. Planning Meetings & Analysis
    • Tool of Plan Risk Management.
    • Meeting of subset of stakeholders to map out the approach to identify, analysis, and plan for risks that may impact this project.
Card Set
Risk Management
Knowledge area