Testing Tutorial
Risk
Management
Risk management must be an integral part of any project. Everything does not
always happen as planned. Project risk management contains the processes for
identifying, analyzing, and responding to project risk. Each process has a set
of input and a set of output. Each process also has a set of tools and
techniques that are used to turn the input into output
Risk Management Processes
Risk Management Planning
Used to decide how to approach and plan the risk management activities for a
project.
• Input includes: The project charter, risk management policies, and WBS all
serve as input to this process
• Methods used: Many planning meeting will be held in order to generate the
risk management plan
• Output includes: The major output is the risk management plan, which does
not include the response to specific risks. However, it does include
methodology to be used, budgeting, timing, and other information
Risk Identification
Determining which risks might affect the project and documenting their
characteristics
• Input includes: The risk management plan is used as input to this process
• Methods used: Documentation reviews should be performed in this process.
Diagramming techniques can also be used
• Output includes: Risk and risk symptoms are identified as part of this
process. There are generally two types of risks. They are business risks that
are risks of gain or loss. Then there are pure risks that represent only a
risk of loss. Pure risks are also known as insurable risks
Risk Analysis
A qualitative analysis of risks and conditions is done to prioritize their
affects on project objectives.
• Input includes: There are many items used as input into this process. They
include things such as the risk management plan. The risks should already be
identified as well. Use of low precision data may lead to an analysis that is
not useable. Risks are rated against how they impact the projects objectives
for cost, schedule, scope, and quality
• Methods used: Several tools and techniques can be used for this process.
Probability and Impact will have to be evaluated
• Output includes: An overall project risk ranking is produced as a result of
this process. The risks are also prioritized. Trends should be observed. Risks
calculated as high or moderate are prime candidates for further analysis
Risk Monitoring and Control
Used to monitor risks, identify new risks, execute risk reduction plans, and
evaluate their effectiveness throughout the project life cycle.
• Input includes: Input to this process includes the risk management plan,
risk identification and analysis, and scope changes
• Methods used: Audits should be used in this process to ensure that risks are
still risks as well as discover other conditions that may arise.
• Output includes: Output includes work-around plans, corrective action,
project change requests, as well as other items
Risk Management Concepts
Expected Monetary Value (EMV)
• A Risk Quantification Tool
• EMV is the product of the risk event probability and the risk event value
• Risk Event Probability: An estimate of the probability that a given risk
event will occur
Decision Trees
A diagram that depicts key interactions among decisions and associated chance
events as understood by the decision maker. Can be used in conjunction with
EMV since risk events can occur individually or in groups and in parallel or
in sequence.
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