Question

Risk Management (RM) is one of the tools used in project monitoring to ensure successful completion of the projects. RM involves several iterative steps.

1. Draw and label all risk characteristics which are associated with risk definition. Show the region where each degree of risk (low, moderate and high) lies
2. With regards to the RM iterative process, explain the importance of Monitor and Review  

           in an ongoing RM process.

Answer 1

Ans

a Risk in project management is the process of identifying, analyzing and responding to factors which can lead to delay, affect performance or increase the cost beyond budget during the life cycle of the project. Risk can be classified according to the following risk matrix which has two important characteristics:

• likelihood : how likely the risk is to manifest given historical data, team performance etc
• impact: how much negative impact does the occurrence of the event has

Here red zone is high risk due to high likelihood and high impact

Orange zone is medium risk and yellow zone is low risk.

Ans

b) Risk Management in project management is a iterative process considering of following activities:

i) identification of the risk : This involves which all factors can delay or affect performance or make it unviable.

ii) analyze the risk and prioritize it based on the risk matrix shown above

iii) risk ownership to be defined so that responsible person or team is looking into it.

iv) monitoring of the risk by the risk committee based on report by the responsible person. This monitoring is extremely crucial for high risk categories

v) review of the risk matrix periodically so as to understand the change in likelihood of an event or its impact on the project.