Free PMP Prep Podcasts PMBok Chapter 11 Project Risk Management

The “Bible” of the PMI is the PMBOK Guide, an overall tool for analyzing, conceptualizing, and engaging with projects at both the generic and specific levels. The basic principle of the guide is process, defined through three categories: inputs, tools, and outputs. Five process groups are identified: initiating, planning, executing, monitoring, and closing. Nine areas of knowledge are also uncovered: integration, scope, time, cost, quality, human resources, communications, risk, and procurement. This structure forms a matrix so that each process can be matched with exactly one area of knowledge and one process group.

Parallel Project Training has recently begun offering a series of PMP podcasts in support of its prep certification training – one of its many project management courses in London, recorded by Paul Naybour and Adrian Taggart. Its latest episode covers Chapter 10 of the PMBOK Guide, Project Risk Management. A summary of the material covered is as follows:Project risk management is both the art and science of responding to risk so as to meet project objectives. Risk management is tantamount to insurance, a kind of investment. Risk utility involves the emotional feeling of satisfaction that is experienced when a risk pays off.

Risk identification, quantification, response development, and response control are the processes by which a project manager engages with risk throughout the course of a project. Each knowledge area corresponds to a condition of risk:

1. integration, to inadequate planning
2. scope, to poor definition
3. time, to errors of time and resource availability
4. cost, to lack of productivity
5. quality, to substandard workmanship
6. human resources, to poor organization and conflict management
7. communication, to poor planning
8. risk, to poor insurance
9. and procurement, to lack of enforcement in contracts

Risk quantification involves calculating risk factors and their potential impact on the project, for example, through Expected Monetary Value analysis. Simulations can be used to create a statistical distribution of expected results. The judgment of experts can also be taken into account in processes designed to reach consensus.

Some strategies for risk mitigation include mitigating technical risks, by increasing the quality of project supervision and monitoring; mitigating cost risks, by improving cost management and team support; and
mitigating scheduling risks, by selecting an experienced project manager.

Contingency plans are an important strategy for risk management, specifying the course of action that the team will take if the risk event occurs.

Project managers must effectively set a course of action based on a number of variables, including why the risk is (or is not) important in relation to the project objectives, the strategy of risk mitigation, the individuals responsible for implementing and overseeing the plan, the resource commitment to mitigating the risk, and the goals that will let the team know if the plan is succeeding.

Risk response control is the means by which the plan is monitored and implemented, which may involve making unplanned decisions if contingency plans prove to be inadequate. Risk tracking is the strategy of maintaining an awareness of a particular risk throughout the course of a project. A system of documenting the risk can be set up in order to ensure that the risk is kept within manageable boundaries.