PMP Certification: Project Risk Management Whats, Whens, and Whys (based on PMBOK® Guide, 6th Edition)


Project Risk Management Whats, Whens, and Whys

by Project Management Process Group

1. Plan Risk Management


2. Identify Risks


  • WHAT Identify Risks Is. Identify Risks implies determining every possible potential opportunity or threat that might affect the project objectives.
  • WHY Identify Risks Is Important. Risks identification is the first step for putting together a risk register that prevents and minimizes unexpected problems for the project. Project managers cannot plan for risks until they have addressed which threats or opportunities they are likely to run into.
  • WHEN Identify Risks Is Executed. Identify Risks is an iterative process that continually builds on itself, since uncertainty, and thus risk for the project, can occur at any time and in any other part of the project.  Yet, in a typical project most of the risk identification activity takes place during planning.
pmp 2018 project risk management whats whens whys pmbok guide 6th edition tipsographic main

Project Risk Management Whats, Whens, and Whys

by Project Management Process Group

1. Plan Risk Management


2. Identify Risks


  • WHAT Identify Risks Is. Identify Risks implies determining every possible potential opportunity or threat that might affect the project objectives.
  • WHY Identify Risks Is Important. Risks identification is the first step for putting together a risk register that prevents and minimizes unexpected problems for the project. Project managers cannot plan for risks until they have addressed which threats or opportunities they are likely to run into.
  • WHEN Identify Risks Is Executed. Identify Risks is an iterative process that continually builds on itself, since uncertainty, and thus risk for the project, can occur at any time and in any other part of the project.  Yet, in a typical project most of the risk identification activity takes place during planning.

3. Perform Qualitative Risk Analysis


  • WHAT Perform Qualitative Risk Analysis Is. Perform Qualitative Risk Analysis implies taking all identified risks from the risk register and working  together as a project team in order to:
    • determine probability and impact of the risks
    • prioritize and rank the risks, based on the previous probability and impact analysis.
  • WHY Perform Qualitative Risk Analysis Is Important. The Perform Qualitative Risk Analysis process helps a project manager to focus on the right risks so that the right resources can be canalized in the right risk areas. Moreover, it is fast and relatively easy to put in place.
  • WHEN Perform Qualitative Risk Analysis Is Executed. The project team repeats qualitative risk analysis iteratively as soon as it detects new risks, throughout the entire life of the project.

4. Perform Quantitative Risk Analysis


  • project management professional certification 2018 kit free online preparation tipsographicWHAT Perform Quantitative Risk Analysis Is. Perform Quantitative Risk Analysis implies backing up the project team’s subjective judgments on the magnitude of risks with a numerical evaluation of the probability and impact of risks moved forward from qualitative risk analysis. The process considers also how risks could affect the objectives of the project.
  • WHY Perform Quantitative Risk Analysis Is Important. Plan Risk Responses and Monitor Risk – following processes in the Project Risk Management Knowledge Area – use the risk register information updated during Perform Quantitative Risk Analysis process. Moreover, calculations of contingency reserves for time or cost include the aggregate quantitative estimates that results from the quantitative risk assessment process.
  • WHEN Perform Quantitative Risk Analysis Is Executed. A project manager gathers numbers to evaluate risks right after or at the same time as Perform Qualitative Risk Analysis. It is also common practice to repeat quantitative analysis of risks after the application of risk responses, when the overall project risk should drop significantly.

5. Plan Risk Responses


  • WHAT Plan Risk Responses Is. Plan Risk Response implies determining the most appropriate responses to each top threat and opportunity and assigning an accountable person to manage each risk.
  • WHY Plan Risk Responses Is Important. The Plan Risk Response process creates a plan with specific proactive responses for each risk in the risk register, assigned to specific team members.
  • WHEN Plan Risk Responses Is Executed. Like Perform Qualitative Risk Analysis and Perform Quantitative Risk Analysis, Plan Risk Responses is a planning process with iterative nature and it does not end with the start of project execution. New risks arise throughout the entire project life cycle and a project manager needs to plan and review response strategies accordingly.

6. Implement Risk Responses


7. Monitor Risks


  • WHAT Monitor Risks Is. Monitor Risk implies ensuring that the implemented project risk management activities are in accordance with the risk management plan and the information contained within the risk register.
  • WHY Monitor Risks Is Important. By constantly going over all the project data, a project manager is able to react quickly either in case of new risk or if a response strategy has to be set in motion.
  • WHEN Monitor Risks Is Executed. Monitoring and controlling risks is an ongoing concern that span throughout the entire life of the project and is carried out during the day-to-day work.

Click here for a detailed analysis of each project management process group and knowledge area.

SOURCES: Project Management Institute (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide). 6th ed. Newtown Square: Project Management Institute.

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