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Friday, January 4, 2013

Risk Urgency Assessment

In the previous few chapters we have covered a majority of the tools and techniques used in qualitative risk analysis. We have gathered a lot of information about the risk including its probability, impact and category. Now, the next logical step would be to identify those risks that are near-term or have a greater chance of happening in the near future so that we can be ready for them. Isn’t it? This is where the Risk Urgency Assessment comes into picture.

Risk Urgency Assessment

The purpose of this risk urgency assessment technique is to identify near term risks. We are trying to determine which risks are to be considered urgent. In other words, we are trying to identify those risks that require our immediate attention.

How to Identify a Near Term Risk?

According to the PMBOK guide, we can identify near-term risks by considering either/all of the below factors:
a. Time Available to put a risk response into motion – With some risks, the risk management team needs a certain amount of time to implement the response and similarly in some cases the response could be useful only when implemented within a certain timeframe. For ex: In case of opportunities (positive risks) the opportunities may not exist forever. They may become irrelevant after a few days. So, unless the project team implements the response to the positive risk immediately (within the open window) the whole activity of responding to the opportunity could be useless. There could also be scenarios where a response could totally eliminate a risk if implemented within a certain timeline. If the timeline is missed the response can only mitigate the risk and not eliminate the same.
b. The symptoms and/or warning signs of the risk – Symptoms or Warning signs are also known as Risk Triggers. Risk triggers can help us identify if a risk requires an immediate or urgent response. Some risk triggers may allow only a small response window for the risk management team to handle it. Sometimes, the risk trigger itself could be quite large and we may be forced to implement the response even before all the conditions are met. For ex: let us say one of the risks is missing a schedule deadline where the symptom is a missed deadline. A good manager may implement a response to eliminate this risk even before the schedule deadline is actually missed. Isn’t it?
c. Risk rating score – This is fairly straight forward. In the previous chapters, we assigned a numeric rating score based on the risks probability and impact. Risks that have a higher score are typically risks that may occur pretty soon.

By using all the information outlined above, the team will label a few of the identified risks as near-term risks so that the team can prepare themselves to handle them when the risk events actually materialize.

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Next: Expert Judgment

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