Intro to Project Management: Project Risk Management - Identifying Risks, Brainstorming Delphi Technique Interviews SWOT Checklists Prompt Lists Assumptions Analysis

Identifying Risks: Brainstorming, Delphi Technique, Interviews, SWOT, Checklists, Prompt Lists, Assumptions Analysis

What This Is

Identifying risks is a crucial step in project management. It involves anticipating potential threats or opportunities that could impact the project's objectives, timeline, budget, or quality. A project manager must proactively identify risks to develop effective mitigation strategies and ensure the project's success. For example, when building a bridge, a project manager might identify risks such as inclement weather, material delays, or changes in regulatory requirements.

Key Terms & Formulas

• Risk: An uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives.
• Risk Register: A document that captures identified risks, their likelihood, impact, and mitigation strategies.
• Brainstorming: A technique for generating a large number of ideas in a short time, often used to identify risks.
• Delphi Technique: A structured method for gathering and consolidating opinions from a group of experts, used to identify and prioritize risks.
• Interviews: A method for gathering information from stakeholders, used to identify risks and gather data.
• SWOT Analysis: A technique for identifying strengths, weaknesses, opportunities, and threats, used to identify risks and opportunities.
• Checklists: A list of potential risks, used to ensure that all possible risks are considered.
• Prompt Lists: A list of questions or prompts, used to stimulate thinking and identify potential risks.
• Assumptions Analysis: A technique for identifying and challenging assumptions, used to identify potential risks.
• Risk Matrix: A table that plots risk likelihood against potential impact, used to prioritize and categorize risks.
• Risk Priority Number (RPN): A numerical value that represents the risk priority, calculated as (Likelihood x Impact).
• EV = % complete × BAC (Earned Value = percent complete times Budget at Completion)

Step-by-Step / Process Flow

1. Identify Risks: Use various techniques such as brainstorming, Delphi technique, interviews, SWOT analysis, checklists, prompt lists, and assumptions analysis to identify potential risks.
2. Qualify Risks: Assess the likelihood and potential impact of each identified risk using a risk matrix or RPN.
3. Prioritize Risks: Rank risks based on their likelihood and potential impact, and focus on the most critical ones.
4. Develop Mitigation Strategies: Create plans to mitigate or manage each identified risk.
5. Monitor and Review: Continuously monitor and review risks throughout the project, and update the risk register as necessary.

Common Mistakes

• Mistake: Failing to identify all potential risks.
• Correction: Use multiple techniques to identify risks, and involve stakeholders in the process.
• Mistake: Not prioritizing risks effectively.
• Correction: Use a risk matrix or RPN to prioritize risks, and focus on the most critical ones.
• Mistake: Not updating the risk register regularly.
• Correction: Continuously monitor and review risks, and update the risk register as necessary.

Exam Tips

• Tip: Be prepared to explain the differences between various risk identification techniques.
• Tip: Understand the concept of risk priority number (RPN) and how it is calculated.
• Tip: Be able to describe the importance of risk monitoring and review.

Quick Practice Questions

1. If the CPI is 0.8, is the project under or over budget? Answer: Over budget. Explanation: CPI (Cost Performance Index) is calculated as EV / AC (Earned Value / Actual Cost). A CPI of 0.8 indicates that the project is spending more than planned.
2. What is the purpose of a risk register? Answer: To capture identified risks, their likelihood, impact, and mitigation strategies. Explanation: A risk register is a document that helps project managers track and manage risks throughout the project.
3. What is the difference between a risk and an issue? Answer: A risk is an uncertain event or condition that could impact the project, while an issue is a specific problem or obstacle that has already occurred. Explanation: Risks are potential problems, while issues are actual problems.

Last-Minute Cram Sheet

• Risk: An uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives.
• Risk Register: A document that captures identified risks, their likelihood, impact, and mitigation strategies.
• Brainstorming: A technique for generating a large number of ideas in a short time.
• Delphi Technique: A structured method for gathering and consolidating opinions from a group of experts.
• Interviews: A method for gathering information from stakeholders.
• SWOT Analysis: A technique for identifying strengths, weaknesses, opportunities, and threats.
• Checklists: A list of potential risks.
• Prompt Lists: A list of questions or prompts.
• Assumptions Analysis: A technique for identifying and challenging assumptions.
• Risk Matrix: A table that plots risk likelihood against potential impact.
• Risk Priority Number (RPN): A numerical value that represents the risk priority, calculated as (Likelihood x Impact).
• EV = % complete × BAC (Earned Value = percent complete times Budget at Completion)
• Risk vs Issue: Risks are potential problems, while issues are actual problems.
• Risk Matrix: A table that plots risk likelihood against potential impact.
• RPN: A numerical value that represents the risk priority, calculated as (Likelihood x Impact).