Pmbok Chapter 11 - Project Risk Management

Front 1

What is the goal of Project Risk Management?

Back 1

To increase the probability and impact of positive events and decrease the probability and impact of negative events in the project.

Front 2

What is risk?

Back 2

1. A risk is an uncertain event or condition that, if it occurs, has an effect on at least one project objective (scope, schedule, cost, quality)
2. A risk may have one or more causes, and one or more impacts
3. Risk originates in the uncertainty that is present in all projects
4. Known risk are those that we can identify and analyze, and therefore manage
5. Unknown risks cannot be managed proactively, therefore we must perhaps handle them with contingency plans
6. A risk that has occurred is an issue.

Front 3

Why Risk Management?

Back 3

- Required for successful business activity in today's changing environment; risk versus reward
- Projects are launched in response to opportunities
- As opportunities increase, so do associated risks
- Planning tends to be based on the past, whereas risks are always in the future
- Uncertainty must be addressed proactively and consistently to improve the changes of project success

Front 4

Describe process 11.1 Plan Risk Management

Back 4

Defines how to conduct risk management activities for a project. Careful and explicit planning enhances the changes of success in the other risk management processes.
It is important to ensure that:
- The level of risk management is commensurate with the risk and importance of the project
- We provide sufficient resources and time for risk management activities
- We have established an agreed-upon basis for evaluating risks.

Front 5

What are the INPUTS of the process - Plan Risk Management?

Back 5

1. Project scope statement, provides information on the project and deliverables and helps establish the significance of the risk management effort
2. Cost management plan, defines how risk budgets, contingencies, and management reserves will be reported and accessed
3. Schedule management plan, defines how schedule contingencies will be reported and assessed.
4. Communications management plan, defines interactions and who can provide information on risks and responses
5. Enterprise environmental factors, including risk attitudes and tolerances
6. Organizational process assets, including risk categories, common definitions, risk statement formats, stand templates, roles and responsibilities, authority levels, lessons learned, and stakeholder register

Front 6

What are the TOOLS AND TECHNIQUES of the process - Plan Risk Management?

Back 6

1. Planning meetings and analysis, held to develop the risk management plan. Attendees: PM, project team leaders, key stakeholders, organization risk managers, others as needed. Develop high-level plans covering:
- Risk cost elements, schedule activities, risk responsibilities, etc.
- Templates for risk categories, levels of risk, probability by type of risk, impact by type of objectives, probability and impact matrix tailored to the project.

Front 7

What are the OUTPUTS of the process - Plan Risk Management?

Back 7

Risk management plan, including:
- Methodology
- Roles and responsibilities
- Budgeting for risk management resources
- Timing of risk management activities
- Risk categories
- Definition of risk probability and impact
- Probability and impact matrix, to assist in prioritizing
- Revised stakeholder tolerances
- Reporting formats for risk management process outputs
- Tracking. Documents how risk activities will be reported, monitored, and audited for the project.

Front 8

What are some common categories of risk?

Back 8

1. Technical, quality, or performance risks - such as reliance on unproven or complex technology, unrealistic performance goals, changes to the technology used or to industry standards during the project.
2. Project management risks - Such as poor allocation of time and resources, inadequate quality of the project plan, poor use of project management disciplines
3. Organizational risks - such as cost, time, and scope objectives that are internally inconsistent, lack of prioritization of projects, inadequacy or interruption of funding, and resource conflicts with other projects.
4. External risks - such as shifting legal or regulatory environment, labor issues, subcontractors and suppliers, country risk and weather.

Front 9

What are some common sources of risk?

Back 9

- External, but unpredictable (Regulatory, Natural hazards, side effects)
- External predictable, but uncertain (Market risks, Operational, Currency changes, etc)
- Internal, non-technical (Schedule, Cost, Cash flow, etc).
- Technical (Technology changes, Design, Complexity)
- Legal (Licenses, Patent risks, Contractual, etc).

Front 10

Describe the process - 11.2 Identify Risks.

Back 10

Risk identification determines which risks might affect the project and documents their characteristics. Potentially done by all project stakeholders.
- Risk identification is an iterative process as project risks evolve during the project
- Use a consistent format for all risks
- Usually leads to the Perform Qualitative Risk Analysis process, but can lead directly to the Perform Quantitative Risk Analysis process.