Risk Tolerance
The maximum acceptable deviation an entity is willing to accept on a project or business objective as the potential impact
Top ten risk item tracking
The ________ Risk Item Tracking is a qualitative risk analysis tool that helps to identify risks and maintain an awareness of risks throughout the life of a project
Brainstorming
a techniue by which a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgement
Contingency Allowances
provisions held by the project sponsor or organization to reduce the risk of cost or schedule overruns to an acceptable level or contingency reserves
Contingency Plans
predefined actions that the project team will take if an identified risk event occurs
Contingency reserves
provisions held by the project sponsor or organization to reduce the risk of cost or schedule overruns to an acceptable level or contingency allowances
Decision Tree
A diagramming analysis technique used to help select the best course of action in situations in which future outcomes are uncertain
Delphi techniques
This technique is used to derive a consensus among a panel of experts who make predictions about future developments
Expected monetary value (EMV)
the product of a isk event probability and the risk events mnetary value
Fallback Plans
These plans are developed for risks that have a high impact on meeting project objectives, and are put into effect if attempts to reduce the risk are not effective
Flowcharts
Diagrams that show how various elements of a system relate to each other
Influence Diagram
Diagrams that represent decision problems by displaying essential elements, including decisions, uncertainties and objectives, and how they influence each other
Interviewing
This is a fact-finding technique for collecting information in face-to-face, phone, e-mail, or instant-messaging discussions
Known risks
Risks that the project team has identified and analyzed and can be managed proactively
Management Reserves
Funds held for unknown risks
Monte Carlo analysis
This analysis simulates a model's outcome many times to provide a statistical distribution of the calculated results
Probability/impact matrix or chart
lists the relative probability of a risk occurring on one side of a matrix or axis on a chart and the relative impact of the risk occurring on the other
Residual risks
These risks remain after all of the response strategies have been implemented
Risk
An uncertainty that can have a negative or positive effect on meeting project objectives
Risk Acceptance
involves accepting the consequences should a risk occur
Risk Appetite
the degree of uncertainty an entity is willing to take on in anticipation of a reward
Risk-averse
having a low tolerance for risk
Risk avoidance
involves eliminating a specific threat or risk, usually by eliminating its causes
Risk breakdown structure
This structure is a hierarchy of potential risk categories for a project
Risk enhancement
changing the size of an opportunity by identifying and maximizing key drivers of the positive risk
Risk events
Risk _______ refer to specific, uncertain events that may occur to the detriment or enhancement of the project
Risk exploitation
doing whatever you can to make sure the positive risk happens
Risk factors
Numbers that represent the overall risk of specific events based on their probability of occurring and the consequences to the project if they do occur
Risk management plan
A plan that documents the procedures for managing risk throughout a project
risk Mitigation
reducing the impact of a risk event by reducing the probability of its occurrence
Risk-neutral
Balancing risk and payoff
Risk owner
The person who will own or take responsibility for each risk
Risk register
A document that contains the results of various risk management processes and that is often displayed in a table or spreadsheet format
risk seeking
People that have a high tolerance for risk
risk sharing
involves allocating ownership of the risk to another party
risk transference
Risk __________ occurs when the consequenmces of a risk and responsibility for its management are shifted tp a third party
risk utility
the amount of satisfaction or pleasure received from a potential payoff
runaway projects
This type of project has significant cost or schedule overruns and often does no risk management at all
Secondary risks
These risks are a direct result of implementing a risk response
Sensitive analysis
a technique used to show the effects of changing one or more variables on an outcome
Triggers
Indicators or symptoms of actual risk events
Unknown risks
Risks that have not been identified and analyzed so they cannot be managed proactively
Watch list
A list of risks that are low priority, but are still identified as potential risks
Workarounds
Unplanned responses to risk events that must be done when there are no contingency plans
Planning Risk Management
Involves deciding how to approach and plan risk management activities for the project. By reviewing the plan, project charter, stakeholder register, enterprise environment factors, and organization process assets, project teams can discuss and analyze ris
Identifying risks
Involves determining which risks are likely to affect a project and documenting the characteristics of each.
the main output of this process is the start of a risk register.
Performing qualitative risk analysis
Involves prioritizing risks based on their probability and impact occurrence. After identifying risks, project teams can use various tools and techniques to ran risks and update information in the risk register.
The main out outputs are project documents
Performing quantitative risk analysis
Involves numerically estimating the effects of risks on projects objectives.
The main outputs of this process are project documents updates
Planning risk responses
involves taking steps to enhance opportunities and reduce threats to meeting project objectives. Using outputs from the preceding risk management processes, project teams can develop risk response strategies that often result in updates to the project man
Controlling risks
Involves monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating the effectiveness of risk strategies throughout the life of the project.
The main outputs include work performance information, chan
Topics addressed in a risk management plan
1. Methodology
2. Roles and responsibilities
3. Budget and schedule
4. Risk categories
5. Risk probability and impact
7. Revised stakeholders' tolerances
8. Tracking
9. Risk Documentation
Broad categories of risks described on questionnaires
Market risk, financial risk, technology risk, people risk, structure/process risk
Sample risk resgister
1. Identification number for each risk event
2. Rank for each risk event
3. The name of the risk event
4. Description
5. Category
6. Root cause
7. Triggers
8. Potential responses
9. Risk owner
10. Probability
11. Impact
12. Status