PMP Risk Management Part VII – Process of Risk Identification

The article provides knowledge on the topic of Risk Management for better preparation for exam.
 
In this article we shall focus on the last topic in Risk management – Monitor and Control Risks
 
Monitor and Control Risks
 
The topic of monitoring and controlling risks deals with observing risk trends, observing the responses planned earlier are being implemented, observing occurrence of risk response triggers as planned and how and why are identified risks changing in nature or what new risks are being identified.
 
Activities in Monitor and Control Risks
 

• Observe occurrence of risk triggers, evaluate effectiveness of risk responses and strategies
• Monitor residual risks, observe occurrence of secondary risks
• Identify new risks, analyze and plan responses for them
• Develop new risk responses – due to a change in information available on risk or risk itself
• Collect and communicate risk status along with status of effectiveness of risk responses
• Communicate with stakeholders about identified risks, any new risks and about status of contingency and management reserves
• Determine whether risk identification and response and other assumptions are still valid
• Revisit risks check list – low priority or low impact risks which were not part of prioritized list
• Recommend corrective actions to adjust with the severity of actual occurrences of the risks’
• Recommend preventive actions to adjust to the severity of risk events, in case the risk events are expected to occur later in the project stages as well
• Look for any unexpected risks arising out of actions implemented, including corrective action
• Update risk management and response plans, as needed
• Make changes to the project management plan and other project documents when new risks are identified and risk response measures are formulated
• Create a data base of risk data that can be used in future for similar projects
• Use contingency reserves, re-evaluate the status of reserves including management reserves

 
Workarounds - While contingency plan are developed in advance for certain risks, workarounds are unplanned responses to deal with unexpected problems or events on the project.  An indication of poor risk planning is when managers spend lot of time creating workarounds. 

Risk Reassessments - Risk reassessments simply mean review of risk management plan and risk register and adjusting the information as needed.  These are done periodically during the project phases to ensure risk management plan is working as desired, i.e. to effectively reduce the risks on the project.  The results may include newly identified risks, additional analysis and further risk planning
 
Risk Audits - Risk audits refer to an examination of all the identified risks, the plans for each risks, implementation of such plans, efficiency of the plans and the completeness of risk management plan.  These are helpful simply to show how seriously risk is being taken on the project.
 
Reserve Analysis - Reserves need to be safeguarded throughout the project.  The purpose of creating reserves, especially contingency reserve which lies with the project manager is not to use the reserve, but to provide fallback mechanism.  If a change other than an identified change occurs, a Project manager must use other techniques such as crashing, fast tracking, adjusting the schedule and cost baselines and so on to take control.  Under certain circumstances, management reserves with prior approval of management may be used to deal with such unidentified changes.
 
Asking for additional reserves is equally bad and does seem to indicate lax planning.  In case the reserves are unutilized they must be returned rather than being utilized in other areas. The reserve must be used for the purpose it was created for and not for any other purpose or change occurring on the project. 
 
Status Meetings – Meetings are generally most effective when used to monitor progress on identified risks and for identifying new risks, rather than just to report status of activities being done by each team member.  The latter may lead to other team members losing interest and focus during team meeting.
 
Outputs of Monitor and Control Risks
 
These include

1. Risk register updates
2. Change requests, recommended preventive and corrective actions
3. Project Management plan updates
4. Project document updates
5. Organizational process assets updates

Important tip for all exam seekers: Risk related questions are asked on the exam assuming that the project manager has done proper project management including following all risk management processes thereby identifying risks, planning risk responses, assigning risk response owners, putting contingency and fallback plans in place, and taking all other actions.
 
The topic of risk management is huge, yet critical for the exam. I am also providing the summary separately for the benefit of the readers.
 
Rattan N Whig, PMP
 
The views presented in this article are solely my personal views.  I advise all the readers to exercise discretion while adopting any views listed in this article or anywhere in the other articles for their benefits.  Another important aspect is that, whenever there is a difference or conflict in information presented in these articles and those listed in PMBOK® guide or any other publication by the PMI® institute, the dispute must be resolved in favor of the information published by PMI® institute.