Risk Management Strategies, Tools, and Techniques
By Kathie York
This essay is an excerpt from an assignment for the Assessing and Managing Project Risk course in my Master of Science in Project Management program. The tasks for this question were:
Describe, compare, contrast, and fully analyze the various strategies and tools/techniques for each of the six PMBOK risk management processes (for both negative and positive risks)
(In this document, negative risks are “risks.” Positive risks are “opportunities.”)
The six PMBOK risk processes are (from Chapter 11 of the Fourth Edition PMBOK):
- 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 Monitor and Control Risks
11.1 Plan Risk Management
The Risk Management Plan (RMP) is an overview of the entire risk process, initiated at the beginning of a project. It is usually completed during the planning phase. The project manager (PM), and other stakeholders as necessary to this project, help develop the plan. Read the Complete Article
What Is a Risk?
By Andrea Brockmeier
In my training experience, I find that most people know what risk management is, but many people struggle with identifying risks. Often, people create a list of risks that includes things like “The infrastructure is outdated,” or “We aren’t sure how much Sam will be available for the project.”
These are certainly concerns that we should be thinking about, but are they risks? I would suggest that no, they aren’t. The first one is simply a statement of fact; the second one is an uncertainty. Risks may derive from circumstances or uncertainties like these, but the most effective way to articulate a risk is to express it as an event. It’s something that could happen.
Why does it matter? The importance of articulating risks as events comes into play when we get to quantifying them, particularly the probability. When stated as facts or uncertainties, the probabilities are rather meaningless. Read the Complete Article
Risk Planning in Project Management
By Keith Mathis – PM Expert Live
When taking on any endeavor, you have to be prepared for the inevitable risk that will arise. No project ever runs perfectly. Snags will arise. You need to be prepared for what you will do when the time comes or, even better, you need to know how to prevent as many hurdles as possible.
A risk is any uncertain event or condition that may take place. All risks have a cause and a consequence. However, not all risks are negative. Some risks may be an opportunity. There are six processes to follow when planning and managing risk.
Risk Management Planning
According to the A Guide to the Project Management Body of Knowledge – 3rd Edition (PMBOK®), “risk management planning is the process of deciding how to approach and plan the risk management activities for a project.” Whether you decide to identify risks before the project begins or in the middle, a Risk Management Plan should be drafted. Read the Complete Article
Risk Management: Risk Workshops
By Dave Nielsen
One of the most powerful tools available to the project manager is the collective knowledge of the project team. A project manager’s success or failure on a project is determined, to some extent, by how well they use this tool. This is particularly true in the case of risk management. Sure there are other sources the project manager can turn to when searching for information on the risks their project faces. Information is available from professional associations, consultants, government organizations, historical databases, and risk management artifacts from previous projects. These are all valuable sources of information but they will not provide you with information specific to your project. Even if they could, they would not be able to provide you with information specific to your project, and your project team. The best source for that information is from the project team.
The team combines the knowledge they have of your project, its goals, objectives, schedule, tools, and technology which you provide with the knowledge and experience they have gained from projects they have worked on in the past. Read the Complete Article
Managing Project Risks (#28 in the Hut Introduction to Project Management)
By JISC infoNet
All projects bring with them an element of risk. In the best-planned projects there are uncertainties and unexpected events can always occur for example project staff might leave unexpectedly, the budget might suddenly be cut or a fire or theft might affect the project progress. The majority of risks are however related to the fact that your plan is based on estimates and they are therefore manageable. Risk management is a mechanism to help you to predict and deal with events that might prevent project outcomes being delivered on time.
Risk management is probably the single most important part of project management.
Identifying Project Risks
You will undertake an initial risk assessment as part of starting up the project. Basically you are asking the questions:
Read the Complete Article
- What could possibly happen to affect the project?
- What is the likelihood of this happening?
Project Risk and Risk Management
By David Litten
Whenever we undertake a project, risk is inevitable, since projects enable change – and whenever you have change, it introduces uncertainty and hence risk.
A risk is defined as an uncertain event which should it occur, will have an effect on the project meeting its objectives. These uncertain events can be positive in which case it would be called an Opportunity, when negative it is called a Threat. Both have the common thread of uncertainty.
When carrying out risk management, the purpose is to reduce the probability and impact of threats and to increase the probability of opportunities and/or their positive impact. It is helpful to consider that risk is “an event that may all may not occur in the future, but if it does occur it will have an impact on the project objectives“.
The Business Case will contain information weighing project cost and risk against the business benefits. Read the Complete Article
Risk Identification in Software Projects
By Dave Nielsen
Threats to software development projects are often minimized or overlooked altogether because they are not as tangible as risks to projects in other industries. The risks are there though and just as capable of derailing the software development project as a project in any other industry.
Most project managers in the information field have had the experience of planning a software development project down to the last detail, planning the effort for each of the tasks in the plan down to the last hour and then having some unforeseen issue come along that derails the project and makes it impossible to deliver on time, or with the feature set originally envisioned.
Successful project managers in any industry must also be skillful risk managers. Indeed, the insurance industry has formalized the position of risk manager. To successfully manage the risks to your software development project, you first must identify those risks. Read the Complete Article
Risk Identification Tools (#3 in the series How To Effectively Manage Project Risks)
By Michael D. Taylor
To avoid the , the project manager can take advantage of any one of the following risk identification tools. Each of these tools enables the team to focus on parts of the project rather than the project as a whole. By doing this the focus is more concentrated and more likely to give better visibility of potential project risks.
Process Flowcharts. Focusing on project processes such as the schedule network diagram, communications, information flows, decision making, Intranet usages, documentation, e-mail, manufacturing, coding, testing, etc., will inevitably disclose potential project threats.
Analogous Project Comparisons. Previous similar projects, that have experienced certain problems, can be invaluable to the new project. Project managers of these previous projects can become a fountain of information regarding similar risks to be faced by those on the new project.
Risk Checklists. Read the Complete Article
Risk Identification – Typical Risk Sources (#2 in the series How To Effectively Manage Project Risks)
By Michael D. Taylor
Identification of project risks is not a one-time only event. As projects progress new risks will become evident and must be addressed accordingly. It is imperative that project managers take full advantage of the skills and experiences of subject matter experts, and other project managers of similar past projects. The challenge facing risk management teams is knowing where to begin the process of risk identification. It’s not uncommon to see blank facial expressions when one asks the question, “What risks do we face on this project?”
Typical risk sources that should be examined are:
- Poorly defined product requirements
- Design “drift”
- Exceeding technical capabilities
- Accepting an unproven technology
- Making too many changes to an existing product
- Limited availability of needed skills
- Project deadlines
- Budget/funding limits
- Extensive sharing of resources
- Learning curve periods
- Effects of major holidays
- Activity bottlenecks
- Marketing risk
MICHAEL D. Read the Complete Article
Project Risk Management – An Analogy
By Xiaoming Wang
In terms of project management theory, risk management in a project can be defined into three main activities:
- Risk assessment and analysis
- Risk reduction and monitoring
- Risk management process and methodology
It might be difficult to understand the boring theory, thus a real-life example will prove very helpful.
Imagine, you and your partner plan to have dinner in a fancy restaurant on the Fifth Revenue for your three year anniversary. Basically, you need go through the following steps in order to make your wife/husband happy.
- Find the phone number of the restaurant
- Call the number and book the table
- Go to the restaurant
- Eat, drink, talk, eye contact, and etc…
In the above steps, if everything is going well, brilliant! However, as you know anything could go wrong in real life, and you cannot know beforehand. Such as “the number is wrong”, “no table available”, “huge traffic preventing you from getting there”, “the restaurant did not reserve your table”, “you/your partner are not happy with the dishes”, “they do not accept a credit card or your credit card does not work”, etc… There are many of them. Read the Complete Article