Which Components Can Be Added To The Risk Register Table From A Qualitative Risk Analysis

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Take a chance Management

Programme Adventure Management—11.i
Identify Risks—11.two
Perform Qualitative Take a chance Assay—11.3
Perform Quantitative Risk Assay—11.iv
Plan Risk Responses—eleven.five

PMI's gamble direction philosophy is based on a proactive approach to preventing negative risks and enhancing positive risks. Key points to think about risk include

Risk can be either positive or negative. Positive risks are opportunities; negative risks are threats.
A run a risk breakdown structure (RBS) is used to organize risk in a hierarchical construction.
Monte Carlo analysis is a technique using simulations and probability in determining quantitative risk assay.
Take chances categories are of import in classifying risk.
Probability and impact are both needed to assess risks.
Quantitative analysis is mostly reserved for loftier-probability, high-impact gamble.
Risk direction planning and risk response planning are non the same activities.
Hazard identification is an iterative procedure that is performed throughout the project, not just during planning.
Decision tree analysis is a technique using probabilities and costs for structured decision making.
V of the six risk management processes are conducted during the planning procedure grouping.
The risk register is an important tool for capturing and tracking risks.

The risk methodology is a definition of how risk will exist managed. It includes the approach, tools, and techniques to be used for the project. The arroyo details how the steps of the risk process will be conducted. For example, the approach could specify that risk analysis volition be conducted at the end of each planning meeting. The tools can include the risk annals, the take a chance breakdown structure, the probability and impact matrix, and checklists.

Risk Management Planning and Risk Response Planning

The adventure management plan includes the risk methodology, roles/responsibilities, budget, execution timing, and definitions for risk categories, probabilities, and impacts. It is a summation of how the project team will comport out the remainder of the gamble management activities for the projection. The adventure management plan should not be dislocated with the risk response programme, which is where the project director captures responses to specific risks that have been identified during the risk identification process.

The risk direction programme is the single output of the plan risk management process. Tabular array 4.10 shows the inputs, tools and techniques, and outputs for the programme risk management process.

Table 4.10. Plan Take a chance Direction Inputs, Tools and Techniques, and Outputs

Inputs	Tools and Techniques	Outputs
Project telescopic argument	Planning meetings and assay	Risk management program
Cost direction plan
Schedule management plan
Communications management plan
Enterprise environmental factors
Organizational procedure avails

Risk Breakdown Structure (RBS)

A gamble breakdown structure (RBS) is a tool that tin can be used to organize risks in a hierarchical fashion. The construction is defined using the risk categories. Even if an RBS is non used, risk categories are yet divers in risk management planning. Risk categories can include

Technical—Risk associated with using new applied science.
External—Chance associated with forces or entities outside the project organisation. External risks tin include external suppliers, customers, weather, and marketplace conditions.
Organizational—Risk associated with either the system running the project or the organization where the project will be implemented.
Project Management—Risk associated with project management processes.

Hazard Probability and Impact

Probability tin can be divers as the likelihood that a risk will occur. Information technology can be expressed mathematically (.2) or every bit a relative scale (low, medium, high). The definition for probability is adult during adventure direction planning.

Impact is the upshot a risk has if it does occur. It can also exist defined on a relative scale or mathematically. The definition for bear on is developed during risk management planning.

The team documents in the projection direction program particular how probabilities and impacts are measured. For example, a ruddy/yellow/green calibration might exist used, where loftier-probability, high-impact risks are red; low-probability, low-impact risks are dark-green; and so along. A probability and bear on matrix can also be used; for an example, refer to PMBOK 4th Edition, Figure xi-x.

Risk Identification, Analysis, Response Planning, and Monitoring/Controlling

In the risk direction procedure, completing the chance management plan is the beginning pace. After the plan is in place, according to PMI the side by side steps in the risk management process are

Identification
Analysis (qualitative and quantitative)
Response planning
Monitoring/controlling (discussed in Chapter 6, "Project Control")

Identify Risks

The identify risks procedure is determines the risks that might affect the project and characterizes those risks.

Obviously, the ability to identify risks is key in an constructive risk management process. Keep in heed that identifying risks is non just the project manager's responsibility; team members, subject thing experts, customers, stakeholders, and others are involved in this process. Table iv.11 shows the inputs, tools and techniques, and outputs for the identify risks process.

Table four.11. Identify Risks Inputs, Tools and Techniques, and Outputs

Inputs	Tools and Techniques	Outputs
Hazard management plan	Documentation reviews	Risk annals
Activity cost estimates	Information gathering techniques
Activity duration estimates	Checklist analysis
Telescopic baseline	Assumptions analysis
Stakeholder register	Diagramming techniques
Cost management plan	SWOT analysis (Force, Weakness, Opportunity, Threat)
Schedule management programme	Expert judgment
Quality management program
Projection documents
Enterprise environmental factors
Organizational process assets

The Risk Register

The adventure register is the output of the place risks process. The risk register contains the post-obit information:

Risk description
Date identified
Category
Potential responses
Electric current status

Qualitative and Quantitative Adventure Analysis

Qualitative run a risk analysis provides further definition to the identified risks in society to make up one's mind responses to them. The key terms are probability and affect. Probability is important because information technology measures how likely a run a risk volition occur. A loftier-probability risk deserves more attention than a low-probability chance. Likewise, impact is a measure of how the run a risk will affect the project should it occur. A take a chance with low bear on has a different response than one with a high bear on.

Qualitative run a risk analysis quickly prioritizes risks in gild to conduct response planning and quantitative chance assay, if used. Using the probability of the affect and a probability touch matrix, the project manager develops a prioritized list of risks. The output to this step is captured in the risk register. Table four.12 shows the inputs, tools and techniques, and outputs for the perform qualitative risk analysis process.

Table 4.12. Perform Qualitative Risk Analysis Inputs, Tools and Techniques, and Outputs

Inputs	Tools and Techniques	Outputs
Risk register	Risk probability and bear upon cess	Hazard register updates
Risk management plan	Probability and bear on matrix
Project telescopic argument	Risk data quality assessment
Organizational process assets	Risk categorization
	Risk urgency cess
	Expert judgment

Quantitative hazard analysis assigns numerical values to risks and looks at those risks that are loftier on the list of prioritized risks during qualitative risk assay. The goal of this process is to quantify possible outcomes for the project, determine probabilities of outcomes, further identify high impacting risks, and develop realistic scope, schedule, and price targets based on risks. Table iv.13 shows the inputs, tools and techniques, and outputs for the perform quantitative chance analysis procedure.

Table 4.13. Perform Quantitative Risk Assay Inputs, Tools and Techniques, and Outputs

Inputs	Tools and Techniques	Outputs
Risk register	Data gathering and representation techniques	Hazard register updates
Run a risk management plan	Quantitative risk analysis and modeling techniques
Cost direction plan	Expert judgment
Schedule management plan
Organizational process assets

A key tool used in quantitative take chances analysis is decision tree assay. Using a conclusion tree diagram (see Figure four.3), the touch on of different scenarios is captured. Both probability and price are used, resulting in an expected monetary value (EMV).

Figure 4.3

Effigy iv.three An case of a decision tree assay.

For this example, there are two vendors for a software packet; Peak and WebCo. The details of the ii options are presented in Table 4.14.

Table 4.14. Decision Tree Analysis Instance Information

	Acme	WebCo
Buy price	$120,000	$130,000
Maintenance	$75,000/year (98% reliability)	$seventy,000/yr (99% reliability)
Failure cost	$100,000 (2% probability)	$50,000 (1% probability)

Responses to Positive and Negative Chance

Later on all risks are identified, options to deal with the risks must be identified. Each risk is assigned to one or more than owners to carry out the planned response. The responses are documented in the run a risk register subsequently information technology has been updated in the plan run a risk responses process. Table iv.fifteen shows the inputs, tools and techniques, and outputs for the plan gamble responses procedure.

Table 4.15. Program Gamble Responses Inputs, Tools and Techniques, and Outputs

Inputs	Tools and Techniques	Outputs
Risk register	Strategies for negative risks or threats	Run a risk register updates
Risk management plan	Strategies for positive risks or opportunities	Run a risk-related contract decisions
	Contingent response strategiesplan	Project management updates
	Expert judgment	Project certificate updates

There are 4 responses to negative risks:

Avoid
Transfer
Mitigate
Accept

For positive risks the responses include

Exploit
Share
Enhance
Accept

They are summarized in Table iv.16.

Table 4.16. Summary of Risk Responses

Response	Description	Hazard Blazon
Avoid	Eliminating the threat past irresolute the project management program.	Negative
Transfer	Shifting the risk to a third political party.	Negative
Mitigate	Reducing either the probability or bear on of the risk.	Negative
Exploit	Taking steps to make the opportunity happen.	Positive
Share	Using a 3rd party to assist capture the opportunity.	Positive
Enhance	Increasing the probability or positive touch of the run a risk.	Positive
Take	Taking no steps in the project because of the adventure. Contingency reserves might be established.	Positive and Negative

Adventure Monitoring and Controlling

The risk process is not just performed one time during the planning procedure. Throughout the projection, risks must be continually monitored, with boosted assay and hazard response evolution as new risks are identified. Take chances monitoring and decision-making focuses both on identification and analysis of new risks, every bit well every bit tracking previously identified risks and risk triggers.

Risks should be re-evaluated when the following events occur:

A run a risk trigger is identified
A change request is canonical
Key project milestones are reached
Project phases end
Deviations are detected in variance and trend assay
Corrective or preventive actions are implemented

Cram Quiz

Reply these questions. The answers follow the last question. If you cannot answer these questions correctly, consider reading this section again until you can.

Which input is non used for hazard identification?

	A. Projection charter
	B. Scope baseline
	C. Cost direction program
	D. Academic studies

In evaluating projection risk, a determination tree assay is most helpful in which of the following scenarios?

	A. Describing a potential risk and the implications for each bachelor choice and outcome associated with the risk
	B. Describing a potential risk and the most likely choice and outcome associated with the risk
	C. Describing a potential gamble and the least likely choice and outcome associated with the risk
	D. None of the above

The identification of risks associated with a project happens when?

	A. Occurs only at the first of a project when the risk management plan is developed
	B. Is an ongoing procedure, regularly scheduled throughout the life bike of a project
	C. Occurs as needed throughout the life wheel of a project
	D. Both C and D

Which of the following is the only valid tool and technique for the programme risk management process?

	A. Reserve analysis
	B. Planning meetings and analysis
	C. Expert judgment
	D. Contingent response strategies

Which input is not used for the qualitative risk assay process?

	A. Toll management programme
	B. Risk annals
	C. Take chances direction programme
	D. Project telescopic statement

Which tool and technique is not used for the Plan Take a chance Responses procedure?

	A. Strategies for positive risks or opportunities
	B. Contingent response strategies
	C. Risk audits
	D. Expert judgment

Cram Quiz Answers

Answer A is correct. The project charter is not used. The telescopic baseline and cost management plan are used. Bookish studies are part of enterprise environmental factors that also include commercial databases, benchmarking, or other manufacture studies.
Answer A is the correct response. A conclusion tree diagram tin can be used to consider potential risks and all the implications associated with the run a risk. You tin can include every conceivable selection and outcome. Every pick is considered. Answer B is incorrect because choice and issue are limited to the nigh probable scenario. Answer C is incorrect considering choice and outcome are limited to the least probable scenario. Answer D is wrong.
Answer D is the all-time response. Risk analysis is non limited to the beginning of a project'south life bicycle when the risk management plan is developed. The risk direction plan should include a tool for risk assessment as a continuous procedure throughout the project. Hazard reassessment should be a scheduled component of the project simply should too accept the flexibility to occur equally needed at greater or bottom intervals based on the level of gamble.
Answer B is correct. Planning meetings and analysis is the only tool and technique defined for the program risk management process. All of the other answers refer to tools and techniques from other processes.
Respond A is correct. The cost management programme is an input for the perform quantitative risk analysis process. All of the other answers are valid inputs for the perform qualitative take a chance analysis process.
Answer C is correct. Run a risk audits are a tool and technique for the monitor and command risks process. All other answers are valid tools and techniques for the plan risk response procedure.