Chapter 3 RISK risk is a known unknown. This means that it is something that we can predict might happen, but we are not sure whether or not it really will happen. We may also not know when it might occur. We know about it, but it is unknown whether or not it will occur. | Chapter 3 RISK PLANNING A risk is a known unknown. This means that it is something that we can predict might happen but we are not sure whether or not it really will happen. We may also not know when it might occur. We know about it but it is unknown whether or not it will occur. Although people think of risks as having a negative impact a risk could in fact have a positive impact. If something were to happen in a project which would make the project come in far ahead of schedule but we do not know whether or not it would happen it is a risk. If it occurs we need to manage the project in one way. If it does not we manage differently. Even though the overall impact of this risk is positive finishing early it may well cause some major headaches for the PM because many resources will likely have to be rescheduled as work will now be occurring earlier than expected. The PMBOK Guide gives the Risk Management Processes as follows Planning Closing Risk Identification Risk Management Planning Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Controlling Risk Monitoring and Control 54 Risk Planning The risk management process is actually fairly complex requiring a number of steps including 1. Risk identification 2. Establishing risk management strategy 3. Assessing risk attitude 4. Risk quantification and assessment 5. Risk Response 6. Inclusion of contingency Many factors enter into these steps and the process requires the involvement of many people. There are some tools which can be used to tighten the process but some of the risk management process relies on the intuition and experience of the people involved. 1. Risk Identification Identifying the project risks is the responsibility of the Project Manager but everyone associated with the project should assist with this. The PM should spend some focused time on this with the team early in the life of the project. However throughout the project people will continue to identify risks and the team
