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Risk identification

There will be a number of times over the course of the project’s respective life cycle that the project management team and or the project management team leader will find themselves in a position in which they realize that a particular component as to the project and or a particular facet of that project does in fact come with a set or series of inherent risk. When attempting to organize any and all risks for the purposes of attempting to determine what the best strategy in dealing with them may be, the logical first step in the process is to actually make a thorough and careful identification of what exactly these risks are expected to be. Specifically speaking, the risk identification process is one in which all of the potential and likely risks that may arise. This identification process usually involves a session of intense discussion followed by careful documentation and categorization of the risks.

This term is defined in the 3rd edition of the PMBOK but not in the 4th.

Identify Risks

One of the important aspects of managing a project is the project risk management which involves identification, analysis, planning and controlling any risk present within the project. One element of risk management is to identify the risk. It is a process of determining the types of risks that can affect the project. It also involves the documentation of the characteristics of the risks.

The benefits of this particular process are that the existing documentation, as well as the knowledge of the project team members, provides everyone the ability to anticipate different types of events including risk.  To identify the risks, it is important to use information from the cost management plan, quality management plan, schedule management plan, scope baseline and other project documents to name a few to create a risk register.

Risk identification is often carried out by the project manager with the help of the team members, customers and even subject matter experts. This process is iterative since new risks can evolve during the middle of the project life cycle thus may not be included in the risk register.

This term is defined in the 5th edition of the PMBOK.

Project Risk Management

Project Risk Management is a branch of the discipline of project management that deals with identifying and mitigating risk on a project. The desired outcome of risk management is to increase the probability and maximize the result of positive events. There are six steps to the project risk management process, and these steps are repeated over the course of the entire project.
Risk Management Planning-The process of analysis and decision making with regards to the best address, plan, and implement the risk management activities of a project.
Risk Identification- Assessment of the risk susceptibilities of a project and conveying their traits.
Qualitive Risk Analysis- The process by which risks on a given project are given ranking with regard to their potential occurrence and impact on a project.
Quantitive Risk Analysis- The numerical assessment of the impact of overall risk on a project.

Risk Response Planning-A phase of project management that concerns planning interventions to reduce the risk to a project when faced with an adverse event.
Risk Monitoring and Control-The dynamic and ongoing process of project risk management that notes risk occurrence, assesses the effect of risk, noting new risks, intervention with risk response plans, and assessing their outcomes across the duration of a project.
Risk management may involves the interaction of team members from other work groups to evaluate individual work packages and implement measures to reduce risk to the deliverables as a whole.
Risk is any element of uncertainty that may have a positive or negative impact upon project management such as time to completion, amount of resources, or cost.

This term is defined in the 3rd and the 4th edition of the PMBOK.

Risk Monitoring and Control

While the project management team and or the project management team leader is doing its careful and complete characterizations of risk, they often will find themselves in a position in which they realize that a particular component as to the project and or a particular facet of that project does in fact come with a set or series of inherent risks. After all of these likely and potential risks have been properly organized and categorized, it is up to the project management team and or the project manager to effectively determine the best way to deal with these risks. The entire process of identifying these risks and establishing a method of dealing with them can be referred to as risk monitoring and control. This process refers to the process of detailing and tracking identified risks as well as monitoring residual risks, also the identification of any new risks that may arise. This also includes the execution of business response plans, as well as making a thorough evaluation of their effectiveness.

This term is defined in the 3rd edition of the PMBOK but not in the 4th.

The Role Of Expert Consultants In Project Management

Successful project management is always a team effort. However, sometimes this team isn’t all in house. For larger and more complex projects, it is not unusual for even an experienced project manager to require outside assistance to help with the planning  process or to perform some of the work. When is a specialist worth the extra expense?

The Need is Temporary

In some cases, the expert knowledge required is only needed for the project at hand. For example, a project for a large telemarketing organization might be to implement a new suite of software applications for call routing, billing, customer service, etc. The necessary IT leadership resources for such an ambitious project are unlikely to be available on staff. The current IT personnel may be generalists or might have been hired mainly for their familiarity with troubleshooting the existing system.

Creating a full time position to fill this gap can cost much more in terms of total compensation than hiring a consulting firm. An added advantage of sourcing an expert to collaborate with existing team members is that the firm can share responsibility for ensuring a successful project outcome.

The Issue is Complicated

Project management planning is only as good as the information it is based on. In some situations, contracting with an expert to collect data that will be used in scope planning and scheduling makes sense. This might be the case when industry-wide information on a specific topic is needed. An outside consultant with lots of industry networking connections may have a better chance of compiling accurate statistics and other information for use in planning than someone on your staff.

Risk identification is an example of such an area of expertise. A ‘blind spot’ in risk planning can lead to disaster. This type of mistake is particularly likely when historical information is low (e.g. when the current project has little in common with previous projects). A third party risk assessor who does not have a financial stake in any risk protection coverage purchased may be able to offer more accurate insights and strategies.

Potential Problems with Hiring Consultants

There are a number of potential pitfalls to consider before investing in an outside knowledge expert. First, this can represent a significant expense. With a tight budget, it can be difficult to justify hiring a consultant for the planning phase when (in the minds of some stakeholders) no visible work is produced. They may question why you need to pay for advice since you are the project management expert and “should already know all this stuff”. Let the consulting firm share the burden of making the case that their services are necessary and valuable.

Second, bringing in an expert may create friction with your team members. This is especially true if someone on staff feels that they are being passed over in favor of an outsider. A consultant should not be hired unless and until you have fully explored the resources available in house. Acknowledge each team member’s expertise in their field and reward their contributions. Also, make it clear that the role of an adviser is to help out – but that your team will be taking the credit for a job well done.

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In the process of being able to identify risk, it is an important Project Management tool to be able to identify certain indicators, or triggers, in order to anticipate risk before it becomes an issue. A deliberate method is employed to both identify and monitor risk. During this risk identification process, triggers are identified. And these triggers are tracked during the risk monitoring and control process. This system of checks and balances provides Project Management methods for keeping a close watch of risk and its triggers. These triggers, sometimes also referred to as risk symptoms or warning signs, are identified early enough during this risk identification process to be closely observed. Once they are identified, then they are scrutinized in the risk monitoring and control process, thus adding a series of quality assurance and quality control to risk management. As it is critical during Project Management that risk is managed appropriately, being able to control those triggers is pertinent to efficient operations. This process is designed to do just that. Once this process is implemented and is operational, risk management will become considerably easier.

This term is defined in the 3rd and the 4th edition of the PMBOK.