The Risk Management Framework

In the previous section, we learnt about the basic details about the PMI Risk Management Professional certification. This is going to be the first actual chapter in our study plan for this PMI RMP certification exam.

Overview of the Risk Management Framework

The Project Management Institute suggests a Framework that is tried & tested and widely used to manage project risks. It is extremely important to understand the basics of this Risk Management Framework.

There are 4 key domains in this Risk Management Framework. They are:

1. Risk Communication
2. Risk Analysis
3. Risk Response Planning &
4. Risk Governance

Our study plan will be revolving around each of these 4 domains of the Risk Management Framework. Before we go any further into these individual domains, let us now look at the basic details related to these domains and also look at the Exam Objectives that we need to focus on for the PMI RMP Exam.

Risk Communication

The Risk Communication domain deals with how effectively we can communicate about risk related events with all the Project Stakeholders. Risk Communication plays a key role in the overall Risk Management strategy because, as the Project Manager, it is our foremost priority to keep all stakeholders apprised of the Situation in the Project. They key exam objectives of this domain are:

a. Apply Interpersonal Skills
b. Assess Stakeholder Risk Tolerance
c. Document Risk Related Information &
d. Create Regular Status Reports

Risk Analysis

The Risk Analysis domain is by-far the most critical domain of the Risk Management Framework in terms of the impact it can have on the overall Risk Management Strategy in the Project. This is because, unless you can analyze risks properly you cannot plan effectively plan how to handle them and eventually result in project delays and losses. The key exam objectives of this domain are:

a. Identify Risks
b. Evaluate Risks using Quantitative & Qualitative Risk Analysis
c. Prioritize Risks
d. Establish Control Limits

Risk Response Planning

The Risk Response Planning domain too is a very critical domain of the Risk Management Framework because, this is where we actually create plans on how we are going to handle the risk events if they occur. Unless our response is appropriate, the risk will cause project delays and losses. The key exam objectives of this domain are:

a. Develop a Risk Response Strategy
b. Develop a Contingency Approach & Plan
c. Present the Recommendations to Key Stakeholders

Risk Governance

The Risk Governance domain sets up baselines & standards that you wish your project to follow. This is where we actually handle the risk events when they occur. We also take necessary steps to improve our process to ensure that the chances of risk events occurring are kept to the minimum. The key exam objectives of this domain are:

a. Document Lessons Learned
b. Refine Risk Policies & Practices
c. Create the Risk Management Plan
d. Establish metrics for the Risk Management Processes
e. Examine Process Performance
f. Monitor Risk Performance
g. Identify Relevant Policies & Standards

If all this information seems overwhelming to you, just relax and go through the chapter once more. This is just the first chapter. We still have a very long way to go where we will be covering each of these areas in detail…

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