BUS 528 - Chapter 5 Ideas

1. Risk management is the means by which uncertainty is systematically managed to increase the likelihood of meeting project objectives. The key word is systematic, because the more disciplined the approach, the more we are able to control and reduce the risk.

2. The risk management advantage:
• Known unknowns represent identified potential problems, such as the possibility of a strike when a labor contract expires. We don’t know exactly what will happen, but we do know it has a potential to damage our project and we can prepare for it.
• Unknown unknowns are the problems that arrive unexpectedly.
The risk management advantage is that fewer problems catch the project team off guard.

3. All project management is risk management
Risk management happens repeatedly throughout the project. Risk management activities relate to definition, planning and control stages. A risk management plan should be updated regularly, especially when old risks disappear and new risk occurs.

4. Business risk versus project risk
Business risk is inherent in all business activities, but it is seldom the project manager’s job to manage it; that responsibility lies with the owner of the project. Selecting the right project is business risk. Managing uncertainty to meet the stakeholders’ objectives is project risk.

5. The risk management framework
a. identify Risks
b. Analyze and Prioritize
c. Develop Response Plans
d. Implement and plan and continue monitor new risks

Identify the risks of the project and develop a response strategy to the risks. When risk does happen, you know how to response to it.