Risk management Flashcards
what is risk?
an uncertain event or set of circumstances that, should occur, will have an effect on the achievement of the project’s objectives
risk management should be a process integral to the project planning/management process
what is the risk management process
- initiate - ensure common understanding of project objectives, scope and success criteria
- identify
- assess - look at structure of risks and ownership, estimate probability and impact
- plan responses
- implement responses and control
IIAPI
- Initiate
- Look at scope, sucess criteria and project objectives
- risk management focusses on customer needs
what is contained in the risk management plan?
- developed in Definition stage
- description of project risk management process
- criteria for tolerability of risk (what constitutes excessive risk?)
- roles and responsibilities
- risk register format
- identification
- development of risk register
- they should be specific and consider a range of factors
- identification can be done using mechanisms such as brainstorming, SWOT analysis, interviews, questionnaires, assumptions and constraint analysis
give some examples of risk factors
human
commercial
political
economic
social
legal
environmental
- identification what is assumptions and constraints analysis?
mechanism used for risk identification
- identifies assumptions and constraints made whilst developing project plan.
- assumptions then analysed based on their sensitivity (importance to project objectives) and stability (how likely assumption will be false)
- then ranked and converted into risks
+ quick, specific
- subjective - relies on assumptions being identified
- identification: brainstorming
activity should be structured, for example around the WBS.
+ cost effective, wide ranging
+ involves those involved with project, assists communication and understanding
- depends on strong facilitation to keep group on track
- impractical ideas
- risks exaggerated
- identification; check lists
Draws on risks identified in previous projects yes/no/not applicable/unknown
+ uses past experience
+ quick process
- restricted to items on paper
- may be too generic and not up-to-date
- Identification; Delphi Technique
structured method of obtaining group consensus on risk. group of experts meet under guidance of a chairperson to provide assessment of risk.
their responses are then circulated to group
+ taps into expert opinion
- requires experts, time consuming, requires coordination
- risk assessment what does it aim to establish?
structure of risks identified
ownership of the risks, between client and contractor
estimation of the probability evaluation raks and prioritises risk
- risk assessment; evaluation
Categorisation of identified risk according to severity
Priorities risk for treatment
The scores developed for each risk in the P-I matrix can now be used as the basis for ranking and prioritising risks for treatment.
what is the P-I matrix?
probability-impact matrix is a tool for estimating level of risk uses assigned numbers to categorise risks and provide overall measure of their severity
process;
1. define ranking scales and criteria for each scale point
- assign scores for each scale point
- derive the P-I scores for each risk
4, risks then evaluated and ranked according to P-I scores
Explain P-I process
1. define ranking scales and criteria agreed high/medium/low or five-point scale criteria are project specific
- assign scores for each scale point linear score used for probability and logarithmic scale used for impact
- derive P-I scores for each risk -
PxI for each impact.
creates a positioning matrix into which each risk can be placed
What is risk evaluation (part of P-I process)?
This process priorities risks for treatment scores from P-I matrix used
High/medium/low categorisation
is there concentration of risk in one area?
how is risk distributed in project?
