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Wednesday, June 13, 2012

Section Summary - Understanding Risk Management

In this section we have learnt about the basics of Risk Management that will be useful on our journey towards the PMI’s Risk Management Professional Certification.
Let us summarize what have learnt so far:

• A Risk is an uncertain event or condition that if it occurs, has a positive or negative effect on a projects objectives
• Risk Management is the act of increasing the probability and impact of positive events & decreasing the probability and impact of adverse events within a project
• The goal of risk management is to identify the risks within the project and develop a response to either reduce the impact or the probability of a negative risk. If the risk is a positive risk (opportunity) then the goal is to increase the probability and impact of the same.
• The PMBOK Guide covers the Risk Management knowledge area extensively and it is the basis on which our preparation for the RMP Certification is going to proceed
• The Risk Management Plan and the Risk Register are two important documents that are vital to efficient Risk Management
• The Environment in which the Project is executed can have a direct influence on the Project and can be a source of risks for the project. These environmental factors can be grouped into two “Internal” and “External” factors.
• The Project Organizational Structure is one of the vital Internal Factors that affects a Project. An organization can be of 3 types – Functional, Projectized or Matrix. A Matrix Organization in turn can be either a weak matrix, a balanced matrix or a strong matrix
• An Issue is something that is occurring now in the present and is currently being dealt with
• Risk Triggers are signs or indications that is risk event is about to occur or has already occurred. They are also known as Risk Symptoms or Warning Signs
• Pure risk is a type of risk that can result only in losses
• The purpose of Risk Categorization is to systematically identify risks in a consistent manner and organize them so that they can be managed better
• Uncertainty refers to the lack of knowledge of future events whether these events are positive or negative to the project.
• In almost all cases, a risk is taken in pursuit of some kind of benefit
• Part of managing risk is, knowing when to accept a risk.
• The Standard 5 Step approach to managing project risk is widely used to manage project risks and we will use it too. The 5 steps in it are:
o Risk Management Planning
o Information Gathering & Risk Identification
o Risk Assessment & analysis
o Risk Response Planning
o Plan Execution

Prev: Five Step Approach to Risk Management

Next: Risk Management Plan - An Intro

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