Project Risk Management (PMBOK Guide, 4th Edition, PMI, 2008)

Project Risk Management (PMBOK Guide, 4th edition, PMI, 2008)

Objectives: increase the probability and impact of positive events, decrease the probability and impact of negative events.

Risk is an uncertain event or condition that, if it occurs, has an effect on at least one project objective: scope, schedule, cost or quality. Organizations perceive risk as the effect of uncertainty on their project and organizational objectives. Risk tolerance is the degree of risk accepted by organizations and stakeholders (risks within tolerance and in balance with the rewards that may be gained by taking the risks).

• Known risks are those that have been identified and analyzed, making it possible to plan response for those risks.

• Specific unknown risks cannot be managed proactively, which suggests that the project team should create a contingency plan.

Process:

1. Plan Risk Management: the risk management plan describes how risk management will be structured and performed on the project,

a. Methodology: defines the approaches, tools and date sources that may be used to perform risk management on the project

b. Roles and responsibilities

c. Budgeting: assign resources, estimate funds needed for risk management for inclusion in the cost performance baseline and establishes protocols for application of contingency reserve;

d. Timing: when and how often the risk management process will be performed throughout the project life cycle;

e. Risk categories: provide a structure that ensure a comprehensive process of systematically identifying risks to a consistent level of detail;

f. Definitions of risk probability and impact

g. Probability and impact matrix: risks are prioritized according to their potential implications for having an effect on the project’s objectives.

h. Reporting formats and tracking: how the outcomes of the risk management processes will be documented, analyzed, communicated and recorded.

2. Identify Risks: tools and techniques for information gathering

a. Brainstorming

b. Delphi techniques, expert judgment

c. Interviewing

d. Checklist analysis

e. Assumption analysis

f. Diagramming techniques (cause and effect diagrams, system or process flowchart, influence diagrams…)

g. SWOT analysis

3. Perform (effectuer) qualitative risk analysis: process of prioritizing risks for further analysis or action by assessing (en évaluant) and combining their probability of occurrence and impact. Such assessment reflects the attitude of the project team and other stakeholders to risks. The output can be a probability and impact matrix.

4. Perform quantitative risk analysis: process of numerically analyzing the effect of identified risks on overall project objectives. Tools and techniques:

a. Data gathering and representation techniques that draw on experience and historical data to quantify the probability

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