Caprivi Consultancy

What is Risk?

Risk is an uncertain event or condition that, if it occur, has a positive or negative effect on a project’s objectives. (A Guide to the Project Management Body of Knowledge – PMBOK, 2008)

Overall Project Risk; Overall project risk represents the effect of uncertainty on the project as a whole. Overall project risk is more than the sum of individual risk on a project, since it applies to the whole project rather than to individual elements or tasks. It represents the exposure of stakeholders to the implications of variations in project outcome measured in terms of the corresponding objectives.  (Practice Standard for Project Risk Management, 2009)

Threat is a condition or situation unfavourable to the project, a negative set of circumstances, a negative set of events, a risk that will have a negative impact on a project objective it occurs, or a possibility for negative changes.  (Practice Standard for Project Risk Management, 2009)

Likelihood/Probability is a measure of how likely an individual risk is to occur.  (Practice Standard for Project Risk Management, 2009)

Impact is a measure of the effect of a risk, if it occurs, on one or more portfolio success criteria. Also know as consequences. (The Standard for Portfolio Management, 2008)

Opportunity is a condition or situation favorable to the project, a positive set of circumstances, a positive set of events, a risk that will have a positive impact on the project objectives, or a possibility for positive changes. (The Standard for Portfolio Management, 2008)

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Risk Management

Risk Management; Project risk management includes the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project. The purpose of Project Risk Management is to increase the probability and impact of positive events and decrease the probability and impact of events adverse to project objectives.  (Practice Standard for Project Risk Management, 2009)

Risk Management Plan; The document describing how the project risk management will be structured   and performed on the project. It is contained in or is a subsidiary plan of the project management plan. Information in the risk management plan varies by application area and project size. The risk management plan is different from the risk register that contains the list of project risks, the results of   risk analysis and risk responses. (A Guide to the Project Management Body of Knowledge – PMBOK, 2008)

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Risk Management & Frameworks 

• Risk Identification
• Quantitative Risk Assessment
• Qualitative Risk Assessment
• Risk Assessment Frameworks, Forms & Templates

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Risk Assessments 

Identify Risk is the process of determining which risks may affect the project and documenting their characteristics.  (Practice Standard for Project Risk Management, 2009)

Qualitative Risk Analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.  (Practice Standard for Project Risk Management, 2009)

Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on the overall project objectives.  (Practice Standard for Project Risk Management, 2009)

Monte Carlo Analysis is a technique that computes or iterates the project cost or project schedule many times using input values, select at random from probability distributions of possible costs or durations, to calculate a distribution of possible total project cost or completion dates.  (Practice Standard for Project Risk Management, 2009)

Risk Register is the document containing the results of the qualitative risk analysis, qauntitative risk analysis, and the risk response planning. The risk register details all identified risks, including description, category, cause, probability of occuring, impact(s) on the objectives, proposed responses, owners, and the current status.  (Practice Standard for Project Risk Management, 2009)

Risk Response/Risk Mitigation is the process of developing option and actions to enhance opportunities and to reduce the threats to project objectives. (A Guide to the Project Management Body of Knowledge – PMBOK, 2008)

Risk Tolerance; The degree, amount or volume of risk that an organisation or individual will         withstand. (A Guide to the Project Management Body of Knowledge – PMBOK, 2008)

Risk Transference; A risk response planning technique that shifts the impact of a threat to a third party, together with ownership of the response. (A Guide to the Project Management Body of Knowledge – PMBOK, 2008)

Risk Breakdown Structure (RBS) [Tool] is a hierarchically organized depiction of the identified project risks arranged by risk category and subcategory that identifies the various areas and causes of potential risks. The risk breakdown structure is often tailored to specific project types.  (Practice Standard for Project Risk Management, 2009)

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See also; Blog; Risk Management

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