Risk Management Knowledge Area

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Information about Risk Management Knowledge Area
Business-Finance

Published on June 15, 2019

Author: AgileMercurial

Source: authorstream.com

Project Risk Management Knowledge Area: Project Risk Management Knowledge Area Project Risk Management Overview: Project Risk Management Overview The process of planning for risk management, identifying risks, analyzing potential impacts, and response planning Work to increase the likelihood of positive risk occurrence Work to prevent the occurrence of negative risks Project Risk Management Processes: Project Risk Management Processes 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 11.6 Implement Risk Responses 11.7 Monitor Risks Risk Management Concepts: Risk Management Concepts Threats and Opportunities: Threats and Opportunities Risks: Risks 11.1 Plan Risk Management : 11.1 Plan Risk Management Part of the Planning Process Group 11.1 Plan Risk Management: 11.1 Plan Risk Management Part of the Planning Process Group The process of describing how risk management activities will be conducted Risk Management Plan: Risk Management Plan Risk Management Plan: Risk Management Plan 11.2 Identify Risks : 11.2 Identify Risks Part of the Planning Process Group 11.2 Identify Risks: 11.2 Identify Risks Part of the Planning Process Group The process involved with figuring out which risks are relevant to the project and documenting them Concerned with documenting existing risks Risk identification should be a far reaching and collaborative process Risks can be identified later or a risks information can change - this is an ongoing process Risk Identification Techniques: Risk Identification Techniques Risk Register: Risk Register The output of the Identify Risks process Contains information on the possible risks faced in the project Includes: List of risks that were identified The possible impact of the risk Possible identified causes of risks Responses to risks are added during the Plan Risk Response process 11.3 Perform Qualitative Risk Analysis : 11.3 Perform Qualitative Risk Analysis Part of the Planning Process Group 11.3 Perform Qualitative Risk Analysis: 11.3 Perform Qualitative Risk Analysis Part of the Planning Process Group Prioritizing risks by probability of occurrence or the impact of the risks A high probability risk with a high impact will likely be at the top of the list as a high priority risk The likelihood of a risk occurring is a high probability risk The risk impact is severity of the impact on the project if the risk occurs Risks are rated by standard outlined in the Risk Management Plan (Developed in the Plan Risk Management process) Techniques of Qualitative Risk Analysis: Techniques of Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis : 11.4 Perform Quantitative Risk Analysis Part of the Planning Process Group 11.4 Perform Quantitative Risk Analysis: 11.4 Perform Quantitative Risk Analysis Part of the Planning Process Group Numerically analyzing risks by the impact of the risk using metrics such as the cost of the risk or the schedule delay of the risk Aids in decision making related to the risk Assists in creating costs and schedule reserves Identifies the largest impact risks Less subjective than Qualitative Risk Analysis, but more difficult to perform and not always needed in a project with low risk/low time duration Techniques for Performing Quantitative Risk Analysis: Techniques for Performing Quantitative Risk Analysis Techniques for Performing Quantitative Risk Analysis: Techniques for Performing Quantitative Risk Analysis Expert Judgement Experts aid in the discovery of possible costs and schedule impacts to risks bases on their own experience Expected Monetary Value (EMV) Analysis Calculates the average outcome on possible scenarios Positive values indicate a positive risk, while negative values indicate a negative risk Modeling and Simulation Usually done by computer, it is used to find the potential impact of risks on the project Monte Carlo Analysis – can provide the probability of completing a project by the estimated completion date and the estimated budget 11.5 Plan Risk Responses : 11.5 Plan Risk Responses Part of the Planning Process Group 11.5 Plan Risk Responses: 11.5 Plan Risk Responses Part of the Planning Process Group The process of creating plans for handling positive and negative risks Goals include developing ways to improve the likelihood of positive risk (opportunity) of occurring and reducing the likelihood of negative risk (threat) of occurring Develop contingency plans for risks if they do occur Responding to Risks: Responding to Risks Negative Risks – Threats: Negative Risks – Threats Escalate Risk is outside the scope of the project and not within the authority of the project manager or team to handle, risk is escalated up Avoidance Work to eliminate the occurrence of the threat Transfer Shift the possible impact to a third party, such as insurance or contracting out parts of the project transferring the risk to another entity Mitigate Reduce the likelihood of a risk occurring or reduce the impact of a risk on the project Accept Accept that the risk may occur and deal with it when it happens Positive Risks – Opportunities : Positive Risks – Opportunities Escalate Risk is outside the scope of the project and not within the authority of the project manager or team to handle, risk is escalated up Exploit Working to make sure that the risk occurs and exploiting the opportunity Enhance Increasing the likelihood of the opportunity’s occurrence Share Sharing the opportunity with a third party, usually merges multiple advantages increasing the possibility of a positive risk occurrence Accept Accept the risk if/when it occurs, but not working to actively realize the opportunity Contingency Risk Response: Contingency Risk Response If a risk occurs, plans to handle or correct the impact could be created for severe risks Contingency Plans are developed to respond to the occurrence of a risk describe how the occurrence will be handled 11.6 Implement Risk Responses : 11.6 Implement Risk Responses Part of the Executing Process Group 11.6 Implement Risk Responses: 11.6 Implement Risk Responses Part of the Executing Process Group Risks responses plans are implemented to handle or deal with risks The action of minimizing the threat or maximizing the opportunities Implement approved change requests or project document updates 11.7 Monitor Risks : 11.7 Monitor Risks Part of the Monitoring & Controlling Process Group 11.7 Monitor Risks: 11.7 Monitor Risks Part of the Monitoring & Controlling Process Group The process of monitoring or tracking identified risks and identifying possible new risks Evaluation of the risk management processes Reassess risks to determine their current priority and update plans as needed Carry out audits of risks and ensure planned responses are adequate Sources: Sources A Guide to the Project Management Body of Knowledge – PMBOK 6 th Edition https://www.pmi.org/ Joshua Render https://agile-mercurial.com

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