What is Risk?
Risk is an uncertain event or condition that, if it occurs, has an effect on at least one project objective. Objectives can include scope, schedule, cost, and quality. A risk may have one or more causes and, if it occurs, it may have one or more impacts. A cause may be a requirement, assumption, constraint, or condition that creates the possibility of negative or positive outcomes.
Known & Unknown Risks & Issues
Known risks are those that have been identified and analyzed, making it possible to plan responses for those risks. Specific unknown risks cannot be managed proactively, which suggests that the project team should create a contingency plan. A project risk that has occurred can also be considered an issue.
What is Risk Management?
Risk Management includes the processes of conducting risk management planning, identification, analysis, response planning, and monitoring and control on a project. The objectives of Project Risk Management are to increase the probability and impact of positive events, and decrease the probability and impact of negative events in the project.
Risk Management Activities
- Plan Risk Management: The process of defining how to conduct risk management activities for a project.
- Identify Risks: The process of determining which risks may affect the project and documenting their characteristics.
- Perform Qualitative Risk Analysis: The process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.
- Perform Quantitative Risk Analysis: The process of numerically analyzing the effect of identified risks on overall project objectives.
- Plan Risk Responses: The process of developing options and actions to enhance opportunities and to reduce threats to project objectives.
- Monitor and Control Risks: The process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project.
More Detailed Information about each activity of Risk Management Activities will blogged Separately along with related Templates and Guidelines.
Source: Project Management Body of Knowledge (PMBOK® GUIDE).” Project Management Institute. 2008.