Assessment Tasks / Output (ATOs)
1. In your own words, define Risk.
Whenever I hear/see the word “Risk,” I always think of it as the possibility or
chance of something undesirable or unexpected happening. It represents the
potential for harm, loss, or adverse consequences that may arise from a
particular action, decision, or situation. Essentially, risk refers to uncertainty and
the likelihood of unfavorable outcomes. It is often associated with the concept of
taking chances or exposing oneself to potential harm or setbacks.
2. What do you think is the importance of identifying Risk in a project
For me, identifying risks in a project is essential because it allows for early
anticipation of potential obstacles, facilitates resource allocation and
contingency planning, supports proactive decision-making, enhances
communication and stakeholder engagement, and enables effective risk
management. By understanding and addressing risks, projects can increase
their chances of success and minimize negative impacts.
3. Discuss the steps of Risk Management. How do these steps help Project to
succeed?
Step 1 - Plan Risk Management: In this step, you create a plan that outlines how
you will manage risks throughout the project. This plan includes identifying roles
and responsibilities, defining the risk management process, and establishing the
criteria for evaluating risks.
Step 2 - Identify Risks and Opportunities: Here, you identify potential risks that
could affect the project's success. Risks are anything that could go wrong and
cause problems. You also identify opportunities, which are joyous events that
could enhance the project's outcomes.
Step 3 - Perform Qualitative Risk Analysis: In this step, you assess the identified
risks based on their probability of occurrence and potential impact. This helps you
prioritize risks and focus on the ones that are most likely to happen and have a
significant impact on the project.
Step 4 - Perform Quantitative Risk Analysis: Here, you go a step further and
analyze the risks quantitatively, using numerical data and techniques. This
analysis helps you understand the potential monetary value of risks, their
probabilities, and their impacts. It provides a more detailed understanding of the
risks and helps in making informed decisions.
Step 5 - Plan Risk Responses: Once you have analyzed the risks, it's time to
develop strategies to respond to them. In this step, you create a plan that outlines
specific actions to avoid, mitigate, transfer, or accept each identified risk. The goal
is to minimize the negative impact of risks and maximize opportunities.
Step 6 - Implement Risk Responses: Here, you put the risk response plan into
action. You execute the strategies you developed in the previous step to address
the identified risks. This may involve making changes to the project plan,
allocating resources, or taking other necessary actions to deal with the risks.
Step 7 - Monitor Risks: Risk management is an ongoing process, and in this step,
you continuously monitor the project for new risks and evaluate the effectiveness
of the implemented risk responses. You track the identified risks, observe any
changes or new risks that may arise, and ensure that the risk management plan
is still relevant and practical.
Overall, by following these steps, a project can proactively identify, assess,
and manage risks. This helps in reducing uncertainties, minimizing negative
impacts, capitalizing on opportunities, and increasing the chances of project
success. Effective risk management enhances project performance, assists in
meeting objectives, and contributes to overall project stability and predictability.
References:
Team, C. (2023). Risk Management. Corporate Finance Institute.
https://corporatefinanceinstitute.com/resources/risk-management/risk-
management/
