Taken together, risk attitude, risk appetite, risk tolerance, and risk threshold influence the decisions made by individuals and organizations regarding how much risk to take on and how to manage it. Risk Tolerance According to PMBOK Guide 6th Edition, Risk tolerance is the identified range of acceptable outcomes Risk tolerance informs you regarding the sensitivity […]
Mitigation plan, Fallback Plan, Contingency Plan and Workaround Mitigation plan In risk mitigation, action is taken to reduce the probability of occurrence and/or impact of a threat. PMBOK 6 is used for the risk with high probability and impact and therefore place in action to minimize the impact. Risk mitigation revolves around reducing the impact […]
Reserves is a buffer in terms of Schedule or Cost while estimating is added to the estimated schedule and cost to account for risks or uncertainties both for known and unknown risks Padding is unwelcomed practice as it adds unplanned values or reserve over the output of estimations As explained in the picture, your reserves are […]
Passive Acceptance of Risk and Active Acceptance of Risk These are two different risk response strategies to deal with the risks on the project. The idea behind good risk response strategies is to provide the team with various options and identify the actions that could reduce or eliminate threats to project objectives. Risk management team […]
Known Risks and Unknown Risk The risk is future uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives. [PMBOK6] The risk is the effect of uncertainty on objectives, and an effect is a positive or negative deviation from what is expected. [ISO31000] Project risk […]
Negative Risk (threat) and Positive Risk (opportunity) The risk is a future uncertain event which may have positive or negative impact on the Project. PMBOK 6 Risk like changes is unavoidable and integral part of project life. We don’t want to be caught off guard in the event of the risk happening. Thinking methodically about […]
Before embarking on our journey to understand the mentioned terms, let’s understand Decomposition Decomposition as a means of breaking down scope into work package or work packages into smaller activities I understand that for many of us, the project manager it doesn’t make a lot of sense to have two activities as we usually deliver […]
Project Risk Management Future in ambiguous, future is unknown, no one controls the future. Even with the perfect plan, no one can guarantee that things will go as the team has charted out. The risk is a future uncertain event, which means that it might happen or might not. In order to maintain good control over […]
Project Risk Management (A high-level snapshot) Risks are inevitable. Whatever you do, some of the future uncertain events will happen on the project. You got to be ready to face them. Project Risk Management Knowledge Area helps you prepare for these unexpected and unplanned events. Project Risk Management Knowledge Area Processes Plan Risk Management (Planning) it […]
