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Risk Management Processes by Mind Map: Risk Management Processes
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Risk Management Processes

1. Risk Management Planning

Deciding how to approach, plan, and execute the risk management activities for a project.

Methodology

Defines the approaches, tools, and data sources that may be used to perform risk management.

Roles and Responsibilities

Defines management team for each type of activity in risk management plan and assigns people to these roles and clarifies their responsibilities.

Budgeting

Assigns resources and estimates costs needed for risk management for inclusion in the project cost baseline.

Timing

Defines when and how often the risk management process will be performed through out the project life cycle and establishes risk management activities to be included in the project schedule.

Reporting formats

Describe the contents and formats of risk management plan shall be documented, analyzed and communicated to project team.

Tracking

Documents how facts of risks will be recorded for benefit of project and future needs as well as how risks process shall be audited.

2. Establishing the context

Concerned with developing a structure for the risk identification and assessment tasks

Inputs

Key Project Documents

Approach

Review Organizational and Project Documentation

Perform Stakeholders Analysis

Develop Criteria For Success, Criteria measures, Cost, Quality, Time

Develop a Set of Key Elements

Outputs

Organizational and Project objectives

Specific Criteria For Success

Objectives and scope for the Risk Assessment

Develop a Set of Key Elements for Structuring Risk Identification

3. Risk Identification

Determining which risks might affect the project and documenting their characteristics.

Definition

Risk Identification involves identifying and documenting all the risks that could impact your project. A risk could be determined by asking: What is the potential kind of risks that may exist in our project OR by another meaning what are the expected risks in our project which could prevent us from achieving our goals.

Project Goals and Sources of Information

    Goals of each project and/or organization are different, they are including but not limited to: Achieving project scope. Completing project within budget Completing project without having any disputes and/or claims Completing project according to the required quality standards. Completing project on time. Sources of Information about the project: Project defined scope of work. Bench mark and preconstruction cost estimates Project preliminary schedule. Organization Charts. Logistic Plan    

Techniques

Documentation Reviews

Information Gathering Techniques, Brainstorming, Delphi Technique (Smart questionnaire), Interviewing, Root Cause Identification

Checklist analysis

Assumption analysis

Diagramming techniques, Cause-and-effect diagrams, System or process flow charts, Influence diagrams

Output

A list of project’s risks called "Risk Register"

4. Qualitative Risk Analysis

Prioritizing risks for subsequent further analysis or action by assessing and combining their probability of occurrence and impact

Definition

  It's carried out at project early stages, to analyze and prioritize the list of identified risks. At the end of the qualitative Risk analysis we shall be able to identify the Risk magnitude “subjectively" based ob the two factors:   Probability (Likelihood) Impact (Consequence) Qualitative Risk analysis is used at the early stages of the project during which we may face the problem of lack of information which will prevent us from being able to identify “Risk Magnitude” by numbers “Objectively”    

Techniques

Historical Information

Techniques used with Risk Identification, Information Gathering Techniques, Brainstorming, Delphi Technique (Smart questionnaire), Interviewing, Root Cause Identification, Diagramming techniques, Cause-and-effect diagrams, System or process flow charts, Influence diagrams

Matrix Method

Semi-Quantitative Risk Analysis

A scale (linear or non linear) is set for probability, and another scale is set for the impact, each number on the scale corresponds to a "linguistic" value of Probability or Impact (Very High, High, ... etc). For example a 1->5 scale or 1->10 scale. In the Matrix, the resultant of multiplying the values of Probability and Impact for each risk is represented as a number.

Output

By making the Risk Analysis qualitatively using the “Matrix Method” we shall be able to prioritize Risks according to their impact on the project which will enable us to group high risks impact together, moderates together and low risks impact together in order to quantify them.

5. Quantitative Risk Analysis

Numerically analyzing the effect on overall project objectives of identified risks.

Definition

Use of measurable, objective data to determine asset value, probability of loss, and associated risk(s). It's an attempt made to numerically determine the probabilities of various adverse events and the likely extent of the losses if a particular event takes place. Probability of occurrence of the event “Risk” is estimated based on statistical studies made for similar Projects  Impact of event “Risk” whether it is money and/or time is estimated and represented based on previous experiences for similar cases      

Tools and Techniques

Sensitivity Analysis

Scenario Analysis

Probability Analysis

Expected Value

Decision Tree Analysis

Fault Tree Analysis

PERT

Mont Carlo Simulation

Expert Systems (Artificial Intelligence)

6. Risk Response Planning

Developing options and actions to enhance opportunities, and to reduce threats to project objectives.

7. Risk Monitoring and control

Tracking identified risks, monitoring residual risks, identifying new risks, executing risks response plans, and evaluating their effectiveness throughout the project life cycle