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You should remember the Delphi technique if you are planning to take the PMP exam
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Root cause analysis (RCA) The use of tools to drill down to the core of the problem Strengths, weaknesses, opportunities, and threats (SWOT) analysis Looks at the overall project to determine where the strengths and the possible weaknesses may exist as well as the opportunities and threats
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SWOT analysis examines the project itself as well as the project management processes, various plans, resources, and organizational structure to help identify future risks
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What are the advantages of creating a risk register The advantages provided by creating a risk register start with the ability to organize the identified risks in a fashion that will assist in the analysis of those risks The risk register should document the identified risks, the category (scope, quality, schedule, staffing, and so on), risk triggers (if known), and response strategies as well as the assigned owner, who will monitor and respond to the risk The risk register is also a great way to demonstrate your project management control to stakeholders
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Outputs The only output to the Identify Risks process is the risk register, which is a list of the identified risks and specific information about the risks It is usually created in list or table format and contains the following information:
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List of identified risks The risks should be described in as much detail as needed and should include the event, probability, impact, expected cause, and priority (to be determined during the analysis processes) List of potential responses The responses should be determined by the assigned owner of the risk event and responses should be focused on the high-priority risks found during the risk identification and analysis processes
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3 Perform Qualitative Risk Analysis Process
Performing qualitative risk analysis involves assessing the probability and impact of the identified risks Remember to always use the work performed in previous processes to help develop each downstream process (PMI calls this progressive elaboration Remember this term)
Remember that qualitative analysis is subjective analysis, which depends on judgment to determine or qualify the probability and impact to your project You should also know that PMI (as does the real world) refers to the terms probability and impact in a number of different ways (refer to Table 11-3, later in this chapter)
The Perform Qualitative Risk Analysis process involves an understanding of the stakeholder tolerances and thresholds discussed earlier As with all risk management
11: Project Risk Management
processes, this analysis should be performed early and often throughout the project life cycle Probability and impact can be determined in many different ways:
Expert judgment (using people who are subject matter experts and are experienced with the risk) Cost and time estimates as well as tools such as Monte Carlo analysis (computer simulation) Use of previous similar project risks (historical information or lessons learned) Delphi technique (mentioned earlier in the discussion of the Identify Risks process)
Probability and Impact Matrix
To determine the probability and impact to the project of the various risks, it is helpful to use a matrix (see Table 11-2) The matrix provides a good way to rate, sort, and rank (in order of priority) the risks that have been identified The goal is to determine which risks will have the biggest impact on the project and should have an owner assigned and response strategy created Table 11-2 is an example of a risk probability and impact matrix Be aware that risk probability and impact can be referred to using different terms (see Table 11-3) and you are likely to see these terms on the PMI exam Risk
Staff availability Scheduling issues Obtain budget Procure equipment Create training materials
Probability
High High Med Med Low
Impact
High High High Med Low
Priority
1 2 3 4 5
Owner
PM PM and team Financial analyst Asset manager Course developer
Table 11-2 Risk Probability and Impact Matrix
Probability
Likelihood Chance Possibility Odds
Impact
Consequence Effort Outcome Results
Table 11-3 Other Terms Used for Probability and Impact
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Perform Qualitative Risk Analysis Inputs, Tools and Techniques, and Outputs
The inputs, tools and techniques, and outputs for this process are listed next
Inputs Here s a list of some of the inputs that should be considered when performing qualitative risk analysis:
Risk register
Output from the previous process Including other project plans From the risk perspective (for example, new technology) Standard templates, common terms, and so on
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