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Saturday, 27 January 2007 17:05

Project Risk Management

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Risk Management is the process of measuring, or assessing risk and then developing strategies to manage the risk. In general, the strategies employed include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk. The Risk Management Plan (RMP) is the document prepared by a Project manager to foresee risks, to estimate the effectiveness and to mitigate them.

 


What is Project Risk Management?

Project Risk Management includes the processes concerned with conducting risk management planning, identification, analysis, response and monitoring and control on a project; most of these processes are updated throughout the project. The objectives of Project Risk Management are to increase the probability and impact of positive events, and decrease the probability and impact of events adverse to the project. The Project Risk Management processes include the following:

  • Risk Management Planning – Deciding how to approach, plan, and execute the risk management activities for a project.
  • Risk Identification – Determining which risks might affect the project and documenting their characteristics.
  • Qualitative Risk Analysis – Prioritizing risks for subsequent further analysis or action by assessing and combining their probability of occurrence and impact.
  • Quantitative Risk Analysis – Numerically analyzing the effect on overall project objectives of identified risks.
  • Risk Response Planning – Developing options and actions to enhance opportunities, and to reduce threats to project objectives.
  • Risk Monitoring and Control – Tracking identified risks, monitoring residual risks, identifying new risks, executing risk response plans, and evaluating their effectiveness throughout the project life cycle.


Note: Project Risks are greater at the beginning of the project than at the end. On the exam it may also be posed, as project risk is lowest at the end.

 

 

Read 4613 times Last modified on Thursday, 10 December 2009 22:16

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