Aim: To understand the Monitor and Control Risks process
The monitor and control risk process enables the project manager to keep track of how risk responses are performing against the plan, as well as the place where new risks to the project are managed.
There could be cases in which risk might be identified as having a material impact to the enterprise but not to the project. For these risk types, the project must allow for an alternative communication path that forwards alerts to the people in enterprise risk management functions. In addition, the project manager must remember that risks can have negative and positive effects. For example, consider a project for a bridge that interconnects two roads with a max traffic flow of 10,000 cars and 300 tons. A weather event forces a traffic change from other roads, which doubles the capacity requirements for the bridge for at least 18 months after project completion. Although this wrinkle does not directly affect the project’s deliverable, it is important to consider the new information. In this case, the added traffic could affect the lifespan and performance of the deliverable after delivery.
The table below shows the inputs, tools and techniques, and outputs for the monitor and control risks process.
|Monitor and Control Risks|
|Inputs||Tools & Techniques||Outputs|
Project management plan updates
Work performance information
Variance and trend analysis
Technical performance measurement
Risk register updates
Organizational processes assets
Project management plan updates
Project document updates
The purpose of project risk control is to
• Identify the events that can have a direct effect in the project deliverables
• Assign qualitative and quantitative weight—the probability and consequences of these events that might impact the project deliverables
• Produce alternate paths of execution for events that are out of your control or cannot be mitigated
• Implement a continuous process for identifying, qualifying, quantifying, and responding to new risks
The risk register accounts for positive and negative risks. A positive risk is a risk taken by the project because its potential benefits outweigh the traditional approach. A negative risk is one that could negatively influence the cost of the project or its schedule.
One of the techniques to evaluate risk control and monitoring effectiveness is to compare actual risk resolution practices to those that were planned at the time the risk was identified. Any deviations (negative or positive), would be cause to implement a corrective action in the risk management plan.
Risk triggers are those events that cause the threat of a risk to become a reality. For example, you have identified the fact that you only have one water pump station available and the replacement takes six weeks to arrive. In the middle of your irrigation and recycling process tests, you discover that water pressure tends to fluctuate beyond pump tolerance levels. If you do not find a way to solve this problem your risk will become a reality.
Remember that for each identified risk, it is important to provide a response plan. It is not much help if the risk becomes a reality and there is no alternate execution path or an emergency procurement plan.
Business risks and pure risks are different because a pure risk takes into account impacts on loss of financial profits, and business risk concentrates on events that might cause a company to lose position with its investors or to have financial difficulty.
In addition, the risk reserves must be evaluated to determine the best way to replenish them. Some examples of events that could have a negative impact in your risk mitigation and control strategies are
• Resource shortage
• Scope creep
• Contractual issues
• Lack of key resources availability
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