RISK is an uncertain or unknown events that can occur any time of project execution and has a positive or negative impact.Risk Management is a crucial part of Project Management.It aims to attract oppurtinities that has positive impact and decrease the probability of threat that has negetive impact to project.More oppurtinities and less threat signifies a stable project in term of scope , time , Cost and quality.Risk can be of 2 category: Known , Unknown.
Project Risk management contains 6 steps
Plan for how to manage a RISK both known & unknown in advance.
It says the overall process on how to plan,manage for a risk depends on Priority and Impact(Probability & Impact Matrix).Its basically conducted at the time of Project planning. It defines following :
- Define which tool and method to be used.
- Define roles and responsibility of Risk Management Teams.
- Look on budgeting for resources for risk management.
- Define the threshold for time frame for the risk to be resolved.
- Define RISK Categories and prepare RBS- Risk breakdown structure.
- Prioritize Risk by Risk by Risk &Impact Matrix.
- Find stake holder tolerance.
Identify a Risk by following method
- SWOT Analysis
- Checklist Analysis
- Assumption Analysis
- Process flow chart
- Cause & Effect Diagram
Qualitative Risk Analysis by following method
- Probability & Impact Matrix
- Categorization method.
Quantitative Risk Analysis by following method
- Probability Distribution
- Expert Judgment
- Sensitive Analysis
- EMV Analysis (Expected Monetary Value)
- Decision Tree Analysis
Risk Response Planning by following method
- Negative Risk –> Avoid / Transfer / Mitigate
- Positive Risk –> Exploit / Share / Enhance