What is risk
In the Project Management, risk is defined as an uncertain event or
condition that may or may not happen, if it occurs, has a positive or
negative effect on at least one project objective, such as scope, schedule,
cost, or quality.
What is uncertainty
In the Project Management, uncertainty is defined as an uncertain event
or condition that may or may not happen, if it occurs does not affect on
project objectives.
What is project
In project management, a project is a temporary endeavor undertaken to
create a unique product, service, or result. It has a beginning and an end,
and you use resources like time and money to get it done.
What is Quality
In project management, quality means meeting the standards and
expectations set for a product, service, or result. It's not just about getting
something done, but doing it right, making sure it meets requirements,
functions properly, and satisfies the needs of those who will use it.
Risk Response Planning
Negative Positive
Escalate Exploit
Avoid Enhance
Transfer/Share Share
Mitigate Accept
Accept
Escalate: This strategy involves Exploit: Exploitation aims to maximize
raising the risk to a higher authority or the opportunity by taking actions to
management level when it exceeds the ensure it occurs and has the greatest
project team's ability to manage it possible impact on project objectives.
effectively. Enhance: Enhancement involves
Avoid: This strategy aims to identifying and maximizing the
eliminate the risk entirely by changing probability and positive impacts of an
project plans or procedures to opportunity through proactive
circumvent the risk event. measures.
Transfer: Risk transfer involves Share: Similar to negative risk sharing,
shifting the risk to another party, positive risk sharing involves allocating
typically through contracts or insurance. the opportunity and its benefits among
Mitigate: Mitigation involves taking multiple parties, often through
proactive steps to reduce the probability partnerships or collaborations.
or impact or both of a risk event before Accept: Acceptance in the context of
it occurs. positive risks means recognizing and
Accept: Acceptance acknowledges embracing the opportunity without
the risk without actively attempting to actively pursuing additional measures
alter its probability or impact and to exploit or enhance it further.
allocate the funds on a big thing.
Elements of a Risk Management System
• Inputs
Inputs refer to the information, data, and resources needed to initiate the
risk management process.
• Risk Identification
Risk identification involves systematically identifying potential risks that
could impact project objectives. This process may utilize various
techniques such as brainstorming, checklists, SWOT analysis, expert
judgment, and lessons learned from past projects.
• Risk Assessment and Prioritization
Risk assessment involves evaluating identified risks in terms of their
likelihood of occurrence and potential impact on project objectives. This
assessment can be qualitative, based on opinions, interview based or
quantitative, using data and statistical analysis to assign numerical
values to risks. Prioritization helps focus attention and resources on
managing the most significant risks.
– Qualitative
– Quantitative
• Risk Response Plan
The risk response plan outlines strategies and actions to address identified
risks. This plan typically includes specific responses for each risk, such as
avoidance, mitigation, transfer, or acceptance, exploit, enhance, share or
escalate along with responsibilities, timelines, and resource allocations.
• Implement Risk Responses
This step involves putting the risk response plan into action. It may require
coordination among project team members, stakeholders, and external
parties to execute the planned responses effectively.
• Risk Monitoring and Control
Risk monitoring and control are on-going processes throughout the project
lifecycle. It involves tracking identified risks, assessing their status, and
implementing any necessary adjustments to the risk response plan.
Elements of Risk Assessment
• Probability or Likelihood of Occurrence
– What chance does it have to happen?
• Severity/Size of Impact or Consequence
– How bad would it be if it happened?
• Detectability?
-Low Detectability> High Risk / High Detectability> Low Risk
What is a contingent response
A contingent response is a type of risk response strategy that is
implemented if a specific risk event occurs. Unlike proactive responses
that are planned in advance, contingent responses are prepared as a
reaction to the actual realization of a risk.
What is a Risk trajectory
Risk trajectory is like plotting the path of a risk's journey over time. It's
about watching how likely a risk is to happen and how much it might
impact the project as things progress. By keeping an eye on this
trajectory, project teams can prepare for changes in risks and adjust their
plans accordingly. It's like having a map to guide you through the ups and
downs of potential problems as the project moves forward.
What is an Issue
An issue is a problem or concern that arises during the course of a project
which needs to be addressed in order to keep the project on track. It's
important for project teams to identify, track, and resolve issues promptly
to prevent them from negatively impacting the project's progress or
objectives.
