Lecture 7 (ch11)

Question 1

What parts go into the field of risk management?

Answer 1

How risk is identified, categorised and dealt with

Question 2

What is a project risk?

Answer 2

An uncertain event with positive or negative impact on the project.

Question 3

How do you identify risk?

Answer 3

Brainstorming sessions
SWOT Analysis
PESTEL
Lessons learned
Data Analytics
AI

Question 4

What is risk management?

Answer 4

When you reduce overall risk to an acceptable level –> “the process of defining how to conduct risk management activities for a project.”

Question 5

What is the difference between risk and issue?

Answer 5

If a risk event is going to occur then it is no longer a risk but an issue to be resolved by whatever means are available and appropriate.Not everything should be seen as a risk.

Question 6

What is a known known risk?

Answer 6

can be planned and
managed with certainty

Question 7

What is a known unknown risk?

Answer 7

can be identified and may
or may not happen

Question 8

What is unknown unknown risk?

Answer 8

are true uncertainties

Question 9

What is a black swan risk?

Answer 9

Very low probability of occurrence but
Extreme impact on the Project

Question 10

What are some strategies to respond to risks?

Answer 10

Avoid
Transfer
Mitigate
Accept
Research
Exploit
Share
Enhance

Question 11

What is PESTEL and how could you use it to identify risks?

Answer 11

Political
Economic
Socio-Cultural
Technological
Environmental
Legal
–> use it to analyse potential risks

Question 12

How do you perform a quantitative risk analysis?

Answer 12

“the process of numerically analyzing the effect of identified risks on overall project objectives.”

Question 13

Who should be involved in identifying potential
risks for the project?

Answer 13

Project managers are ultimately responsible for identifying all risks, but often they rely upon subject matter experts to take a lead in identifying certain technical risks.

Question 14

What is an example of transferring risk?

Answer 14

One common means to do so is through insurance. Project insurance works like any other type of insurance: a premium is paid to another organization, which will assume a level of risk.

Question 15

Plan risk management definition

Answer 15

“the process of defining how to conduct risk management activities for a project.”

Question 16

performing organization (meaning)

Answer 16

an enterprise whose employees have a direct involvement in executing and completing the project

Question 17

project risk (definition in the book)

Answer 17

A project risk is anything that may impact the project team’s ability to achieve the general project success measures and the specific project stakeholders’ priorities. Can be seen either as a threat or as an opportunity.

Question 18

examples of the most common risks faced by megaprojects

Answer 18

1. Design
2. Legal and political
3. Contractual
4. Construction
5. Operation and maintenance
6. Labor
7. Customer/user/society
8. Financial
9. Force majeure (an unforeseen event that prevents a contract from being fulfilled)

Question 19

what is a risk breakdown structure?

Answer 19

a hierarchical organization of risks based on categories such as operational, strategic, finance, external, and project management.

(A Risk Breakdown Structure is similar to a WBS or a resource breakdown structure (RBS) in its hierarchical representation. It can be presented in graphic or table format.)

Question 20

Identify risks (book’s definition)

Answer 20

“the process of determining which risks may affect the project and documenting their characteristics.”

Question 21

Examples of another risk identification technique not mentioned in the other list

Answer 21

Delphi technique

Question 22

risk register (definition)

Answer 22

“the document containing the results of the qualitative risk analysis, quantitative risk analysis, and risk response planning. It details all identified risks, including description, category, cause, probability of occurring, impact(s) on objectives, proposed responses, owners, and current status.”

Question 23

Steps in identifying risks

Answer 23

1. information gathering
2. reviews (of documents to uncover risks)
3. understanding relationships (root cause relationship and trigger conditions)
4. risk register

Question 24

risk vs issue

Answer 24

Issue: a certain event, deal with it.

Risk: an uncertain event/only a probability of occurrence. If the risk event is going to occur then it becomes an issue to be resolved.

Question 25

Plan risk responses (definition)

Answer 25

“the process of developing options and actions to enhance opportunities and to reduce threats to project objectives.”

Question 26

to perform qualitative risk analysis (definition)

Answer 26

“the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.”

Question 27

steps in a root-cause analysis:

Answer 27

1) list the risk as an event (e.g. late delivery), 2) name the big bones (e.g. machines, people, methods, materials), 3) ask why could e.g., people be a cause?

Question 28

Plan risk responses:

Answer 28

“the process of developing options and actions to enhance opportunities and to reduce threats to project objectives.”

Question 29

Eight common risk responses:

Answer 29

1.avoid risk 2.transfer risk 3.mitigate risk 4.accept risk 5.reserach risk 6.exploit opportunity 7.share oppportunity 8.enhace opportunity

Question 30

what is a showstopper

Answer 30

risks that threaten the entire project

Question 31

avoid risk

Answer 31

Many people prefer to avoid a risk if possible, and often, that is the best strategy. Sometimes, a project plan can be altered to avoid a risk by deleting the risky section or work element.

Question 32

TRANSFER RISK

Answer 32

Sometimes, a decision is made to transfer a part of or an entire proj- ect risk to another organization. One common means to do so is through insurance.

Question 33

MITIGATE RISK

Answer 33

Mitigation strategies are those in which an effort is made to lower risk. In general, this means either reducing the probability of a risk event happening and/or reducing the impact if it does happen.

Question 34

ACCEPT RISK

Answer 34

often used for risks that are deemed to be minor. The project team deals with them if and when they happen.

Question 35

Research risk

Answer 35

In certain instances, the best way to handle a risk is to learn more about it. The first research strategy, therefore, is to secure better and/or more information so the project team understands what they are dealing with.

Question 36

EXPLOIT OPPORTUNITY

Answer 36

only for opportunities. done by assigning more resources to the opportunity

Question 37

share opportunity (weird answer :/)

Answer 37

the project team can develop a new product or service so revolutionary that the parent organization is not capable of fully exploiting it

Question 38

ENHANCE OPPORTUNITY

Answer 38

a project team wants to either maximize the probability that an opportunity will occur and/or maximize the benefit if it does. The project manager wants to identify key drivers of these positive impacts and develop strategies to capitalize upon them. e.g. by adding more resources (opposite of mitigate)

Question 39

Risk definition (more techincal version)

Answer 39

Cause → Risk Event → Effect* "As a result of a definite cause an uncertain event might occur, which would lead to an effect on the project’s objective(s) with a quantifiable result."