Risk Planning

Risk management planning process is the foundation if or all the risk processes that follow. The risk management plan assures that the appropriate amount of resources and the appropriate time are dedicated to risk management.

• Risk management planning inputs
• Project scope statement
• Project management plan
• Tools and techniques
• Planning meetings and analysis

Outputs

• Risk cost elements are developed
• Schedule activities associated with risk are developed
• Risk responsibilities are assigned
• Templates for risk categories are defined
• Definitions of terms
• Probability and impact matrix is defined or modified for this project.

Risk categories are a way to systematically identify risks and provide a foundation for understanding.Risk breakdown structure lists the categories and subcategoriesA probability and impact matrix defines the combination of probability and impact that helps you determine which risks need detailed risk response plans.

Risk identification

Inputs

• Project scope statement
• Risk management plan
• Project management plan

Tools and techniques for risk identification

• Documentation reviews
• Information gathering
• Brainstorming
• Delphi technique
• Nominal group technique
• Interviewing
• Root cause identification
• Strengths weaknesses opportunities and threats
• Checklist analysis
• Assumptions analysis
• Diagramming techniques

Outputs

• List of identified risks
• List of potential responses
• Root causes of risk
• Updated risk categories
• Triggers

Qualitative risk analysis process involves determining what impact the identified risks will have on the project objectives and the probability they”ll occur.

Inputs

• Project scope statement
• Risk management plan
• Risk register

Tools and techniques

• Risk probability and impact assessment
  • Probability is the likelihood that an event will occur 0-1
  • Impact is the amount of pain that risk event poses low-med-high
• Probability and impact matrix
  • Probability * impact = risk overall
• Risk data quality assessment
• Risk categorization
• Risk urgency assessment

Outputs

• Risk register updates
  • Risk ranking
  • Risks grouped by categories
  • List of risks requiring near-term responses
  • List of risks for additional analysis and response
  • Watch list of low-priority risks
  • Trends in qualitative risk analysis results

Quantifying risk analysis

Inputs

• Project scope statement
• Risk management plan
• Risk register
• Project management plan

Tools and techniques

• Data gathering
  • interviewing
• Representation techniques
  • Probability distributions

• Continuous probability distributions

• Normal, lognormal, triangular, beta, and uniform distributions

• Normal and lognormal

• Mean and standard deviations which also require gathering the optimistic, most likely and pessimistic estimates

• Triangular distributions

• • • Three-point estimate
• Expert judgment
• Sensitivity analysis
  • Tornado diagram
    • Horizontal bars displays the low and high failure possible for that element. Greatest effect on the project appear at the top of the graph

• Expected monetary value analysis
  • Statistical technique that calculates the average anticipated impact. EMV is calculated by multiplying the probability of the risk by its impact and then adding them together. Used with decision tree analysis
  • Positive – opportunities
  • Negatives – threat
• Decision tree analysis
  • Diagrams that show the sequence of interrelated decisions and expected results of choosing one alternative over the other.
• Modeling and simulation
  • Used for schedule risk analysis and cost analysis
  • Monte Carlo analysis is a simulation technique

Outputs

• Probabilistic analysis of the project
• Probability of achieving the cost and time objectives
• Prioritized list of quantified risks
• Trends in quantitative risk analysis

Risk response plan

The process of deciding what actions to take to reduce threats and take advantage of the opportunities discovered during the risk analysis processes. Includes assigning responsibility to someone – risk owners.

Tools and techniques

• Negative risks
  • Avoid
  • Transfer
  • Mitigate
• Positive risk
  • Exploit
  • Share
  • Enhance
• Both
  • Acceptance

• Passive acceptance means you won”t make any plans to try to avoid or mitigate the risk
• Active acceptance might include developing contingency reserves to deal with the risk should they occur.

• Contingency planning
  • Plan alternatives

Outputs

• Risk register updates
• Project management plan updates
• Risk related contractual agreements