Anticlue

Project Risk Management

Project Risk Management involves conducting risk management planning, engaging in risk identification, completing risk analysis, creating a risk response action plan, and monitoring and controlling risk on a project. Project Risk Management is a continuous process to be engaged in through out the entire project. A key point to remember is that risk is not always bad. There are opportunities and there are threats. The opportunities are the good risks. The treats are the bad risks. The purpose of project risk management is to increase the likelihood and impact of positive events and to decrease the probability and impact of negative events. The six risk management processes are:

1. Risk Management Planning – Risk Management Planning is the process where decisions are made on how to approach, plan, and execute risk management activities. This is completed as a part of the planning process group.
2. Risk Identification – Risk Identification determines the risk which can affect the project's objectives, and identifies the characteristics of those risks. Risk Identification is commonly first engaged in the planning process group.
3. Qualitative Risk Analysis – Qualitative Risk Analysis prioritizes risk for future analysis by analyzing the probability of occurrence and impact. Qualitative Risk Analysis is commonly first engaged within the planning process group.
4. Quantitative Risk Analysis – Quantitative Risk Analysis assigns a number to risks as a part of determining the impact on overall project objectives. Quantitative Risk Analysis is commonly engaged within the planning process group.
5. Risk Response Planning – Risk Response Planning ascertains the options and action plans to enhance the opportunities and mitigate the threats. Risk Response planning is normally first started in the Risk Response Planning Group.
6. Risk Monitoring and Control – Risk Monitoring and Controlling is an ongoing process. It involves overseeing the effectiveness of risk responses, monitoring residual risks, identifying and documenting new risks, and assuring that risk management processes are followed. This is done throughout the Monitoring and Controlling Process Group.

Each Risk Management process results in a specific deliverable which is used as the foundations for the subsequent process. Combined the risk management processes provide a best practice pattern for managing risk on a project.