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Additional PM Information
Risk Management

"In the business world, the rear view mirror is always clearer than the windshield."
Warren Buffet

PMP Module 11 + PMBOK® Guide Chapter 11 

These notes are supplementary information that expand on the core information contained in Mosaic's PMP Exam Prep courses. Whilst not central the the PMP exam requirements the materials are intended to add value to our course notes and increase the overall richness of the materials as a project management reference resource. Topics planned for this page include:
For more Practical risk Management resources visit our
Risk Home Page
Risk Management Planning
   

To manage risk effectively you need to deal with uncertainty that matters by following a structured process that takes into account the people aspects (eg, risk tolerance). Each risk is something in the future which might or might not occur. This is vital to a proper understanding of risk and planning its management. Risks do not yet exist, indeed they may never exist at all. This makes them quite different from things which have happened in the past or which currently exist in the present. This makes risks different from issues, problems or constraints; past and present events can be analysed and measured, but future events can only be imagined or estimated by people and these estimates will be influenced by the people's perceptions and past experiences. The general flow of processes needed for effective risk management are outlined in WP1047.
 
- PMI Practice Standard for Project Risk Management is available free of charge to PMI members as a non-printing PDF
     For instructions on downloading the PDF see: http://www.mosaicprojects.com.au/Books.html

 
- Our How To Build a Risk Management Plan workshop provides practical skills and tools to help develop an effective risk register and risk management plan [view course plan].
 
- Paper: The Meaning of Risk in an Uncertain World
- Paper: Risk Management and Complexity Theory   

 
- Blog (Feb. 2009): Risky Business
- Blog (July 2009): A Long Tail    

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Risk Identification
   

The term 'risk management' covers many different types of risk, including strategic risk, financial risk, reputational risk, operational risk, environmental risk, legal risk, contract risk, and technical risk, as well as corporate governance, business continuity and disaster recovery...... to name a few. It is important to ensure that all of the risks that matter are identified and actioned.

 
See Mosaic's Risk Management Templates.
 
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Risk Assessment

The PMBOK
® Guide focuses on the Probability of a risk occurring and its likely Impact if it happens; WP1015 Risk Assessment expands on these basic elements to define a more complete range of assessment criteria and the effect of cognitive bias on peoples ability to make rational assessments of any potential gain or loss. In addition to these known unknowns that can be assessed, there are also two types of unknown unknown; knowable unknowns and unknowable unknowns (or Black Swans). These these three 'types of risk' are discussed in WP1057.
 
The unique nature of projects creates problems in assessing probability; WP1037 outlines some of the issues.
   
For a simple explanation of many statistical calculations, including probability, see: http://www.khanacademy.org/  

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Risk Treatment
   

A risk process which does not lead to the implementation of actions to deal with the identified risks is incomplete and useless. The ultimate aim is to manage the risk affecting your project, not to simply list and analyse them.

 
See Mosaic's Risk Management Templates.

 
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Risk Monitoring and Control
   

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Risk Tools and Techniques
   
Decision Trees
:  One of the best guides to decision trees is at http://www.mindtools.com/dectree.html
 
Venn Diagrams: Show all hypothetically possible logical relations between a finite collection of sets. WP1040 describes there use.
   
   
Complex Decision Making: Many aspects of project management involve making complex decisions - this CSIRO paper provides valuable insights into how people make complex decisions: download the paper
   
Monte Carlo and Latin hypercube:  
Predicting Future Project Outcomes - The power of uncertainty

For a simple explanation of many statistical calculations, including probability, see: http://www.khanacademy.org/  
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View Mosaic's PMP Course Details  or  Visit our Risk Home Page
 

Need More Information?
To discuss your training requirements, please complete an [Information Request Form]
Telephone (03) 9696 8684 or simply email your request to:- training@mosaicprojects.com.au

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