PMP Risk Management
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What are the 6 Risk Management Processes?
- Plan Risk Mgt (planning)
- Identify Risks (planning)
- Perform Qualitative Risk Analysis (planning)
- Perform Quantitative Risk Analysis (planning)
- Plan Risk Responses (planning)
- Monitor and Control Risks (planning)
What is Risk Management concerned with?
- Identification of Risk (opportunities or threats)
- Categorisation of Risk
- Response Planning
- Increase or Decrease the impact
When considering risks what factors should be considered?
- 1. Probability it will occur
- 2. Range of outcomes - impact
- 3. Expected timing / proximity
- 4. Anticipated frequency of risks from that source
Risk Tolerance and Threshold
Risk Tolerance is the degree of risk that is acceptable
Risk Threshold is point at which the risk becomes unacceptable
Describe the Plan Risk Management process.
Details how risk will be managed for the project.
- May include:
- 1. Methodology - how risk will be managed
- 2. R & R s
- 3. Budgeting - cost of risk management activities
- 4. Timing - when to perform risk management (how often)
- 5. Risk Categories to use
- 6. Definitions of probability and impact to use
- 7. Stakeholder tolerances - will guide risk metrics
- 8. Reporting
- 9. Tracking
Who should be involved in the Identify Risks process?
What are the types of input into Identify Risks?
- Management Plans (cost, schedule, risk, quality)
- Activity info (Cost and Duration estimates)
- Stakeholder info
- Project Documents - Earned Value reports, Assumptions, Baselines, Network diagrams...
- EEFs - industry studies, benchmarking..
- OPAs - project files, lessons learned etc...
Identify Risks : Tools and Techniques
- Documentation Reviews
- Info Gathering Techniques (brainstorming, delphi technique, interviewing, root cause analysis)
- Checklist Analysis - Risk Identification checklists built from previous experience and projects (historical info)
- Assumption Analysis - examine validity of assumptions
- Diagramming - Cause & Effect, Flow Charts, Influence Diagrams
- SWOT Analysis
- Expert Judgement
What is the main output of Identify Risks?
Risk Register containing
- List of risks
- List of responses
- Root causes
- Risk Category
When in the risk management process are responses documented.
- Identify Risks
- Plan Risk Responses
What is the purpose of Perform Qualitative Risk Analysis?
- To analyse risks and prioritise them in order to focus on the most worthy risks.
- Compare the risk of a project to the overall risk of other projects
- Determine whether a project should proceed
- Identifying the probablility and impact of each risk using a scale defined in the Risk Management Plan
The Risks can be plotted on a Matrix (Probability x Impact )
Tools and Techniques of Perform Qualitative Risk Analysis
- Risk Probability and Impact Assessment - from interviews, brainstorming...
- Probability & Impact Matrix
- Risk data quality assessment - reviews quality of risk data held
- Risk Categorisation - group risks by criteria e.g. source of risk - helps in planning responses, and mitigating many risks at once.
- Risk Urgency Assessment - i.d the high priority risks that need rapid response
Outputs of Perform Qualitative Risk Analysis
Risk Register Updates including:
- Risk Ranking (against other projects) - this project has a risk score of 8.3
- List of risks , prioritise according to their probability and impact
- Risks grouped by categories
- List of risks with close proximity
- Trends - maybe updated throughout the project to show if risk is increasing etc
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