Risk Management: Concepts and Guidance, Fifth Edition

466 Pages·2014·4.34 MB·English

Business Management / Project Management P Risk
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This new edition of Risk Management: Concepts and Guidance supplies a look c
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at risk in light of current information, yet remains grounded in the history of risk a
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practice. Taking a holistic approach, it examines risk as a blend of environmental, d Management
programmatic, and situational concerns. Supplying comprehensive coverage
of risk management tools, practices, and protocols, the book presents powerful
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techniques that can enhance organizational risk identification, assessment, and
management—all within the project and program environments.
i Concepts and Guidance
Updated to reflect the Project Management Institute’s A Guide to the Project s
Management Body of Knowledge (PMBOK® Guide), Fifth Edition, this edition
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is an ideal resource for those seeking Project Management Professional and Risk
Management Professional certification. Fifth Edition
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Emphasizing greater clarity on risk practice, this edition maintains a focus on the
ability to apply “planned clairvoyance” to peer into the future. The book begins
by analyzing the various systems that can be used to apply risk management. a
It provides a fundamental introduction to the basics associated with particular
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techniques, clarifying the essential concepts of risk and how they apply in
projects. The second part of the book presents the specific techniques necessary to
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successfully implement the systems described in Part I.
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The text addresses project risk management from
the project manager’s perspective. It adopts PMI’s e
perspective that risk is both a threat and an opportunity,
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and it acknowledges that any effective risk management
practice must look at the potential positive events that
may befall a project, as well as the negatives. e
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Providing coverage of the concepts that many project
management texts ignore, such as the risk response
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matrix and risk models, the book includes appendices
filled with additional reference materials and supporting Carl L. Pritchard,
details that simplify some of the most complex aspects E
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ISBN: 978-1-4822-5845-5 n
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Risk
Management
Concepts and Guidance
Fifth Edition

Risk
Management
Concepts and Guidance
Fifth Edition
Carl L. Pritchard
PMP, PMI-RMP, EVP
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2015 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Version Date: 20140722
International Standard Book Number-13: 978-1-4822-5846-2 (eBook - PDF)
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Contents
List of figures xvii
List of tabLes xxi
Preface xxiii
author xxv
introduction xxvii
Part i risk Processes and Practices:
Why risk ManageMent?
chaPter 1 risk ManageMent Practices 3
A Systematic Process 4
Summary 5
chaPter 2 risk concePts 7
Risk Attitudes and Appetites 9
Classifying Risk 10
Risk Breakdown Structure 10
Risk Taxonomy 11
Risk Facets 11
Other Risk Categories 13
Taxonomically Developed Risks 16
Other Relevant Considerations 17
Risk Management Perspectives 17
Realities of Project Management 19
Summary 21
v
vi Contents
chaPter 3 the risk ManageMent structure 23
Risk Management Planning 23
Description and Project Summary 25
Risk Environment 26
Approach to Risk Management 28
Application Issues and Problems 31
Other Relevant Plans 31
Risk Governance 32
Approach Summary 32
Bibliography 33
Approvals 33
Identify Risks 33
Documentation Reviews 34
Information-Gathering Techniques 34
Checklists 35
Assumptions Analysis 36
Diagramming Techniques 36
Perform Qualitative Analysis 37
Baselining Risk 37
Rating Schemes and Definitions 38
Assumptions Testing 40
Risk Modeling 40
Using Analogies 42
Conducting Data Quality Assessments 42
Risk Categorization 42
Risk Urgency Assessment 42
Perform Quantitative Analysis 43
Expert Interviews 43
Expected Monetary Value (EMV) 43
Decision Tree Analysis 44
Program Evaluation and Review Technique 44
Sensitivity Analysis 44
Simulations 44
Plan Risk Responses 48
Risk Avoidance 49
Risk Transference 49
Risk Mitigation 50
Risk Acceptance 50
Opportunity Exploitation 51
Opportunity Sharing 51
Opportunity Enhancement 52
Opportunity Acceptance 52
Monitor and Control Risks 53
Summary 56
Contents vii
Part ii risk ManageMent techniques
chaPter 4 exPert intervieWs 65
Technique Description 65
When Applicable 66
Inputs and Outputs 66
Major Steps in Applying the Technique 66
Use of Results 68
Resource Requirements 69
Reliability 69
Selection Criteria 69
Resource Requirements 70
Applications 71
Outputs 73
Summary 73
chaPter 5 PLanning Meetings: the risk
ManageMent PLan 75
Technique Description 75
When Applicable 75
Inputs and Outputs 75
Major Steps in Applying the Technique 76
Use of Results 80
Resource Requirements 80
Reliability 80
Selection Criteria 80
Resource Requirements 81
Applications 82
Outputs 83
Summary 84
chaPter 6 risk Practice MethodoLogy 85
Technique Description 86
When Applicable 86
Inputs and Outputs 89
Major Steps in Applying the Technique 89
Use of Results 90
Resource Requirements 91
Reliability 91
Selection Criteria 91
Resource Requirements 92
Applications 93
Outputs 94
Summary 95
viii Contents
chaPter 7 docuMentation revieWs 97
Technique Description 98
When Applicable 98
Inputs and Outputs 98
Major Steps in Applying the Technique 98
Use of Results 99
Resource Requirements 100
Reliability 100
Selection Criteria 100
Resource Requirements 101
Applications 102
Outputs 103
Summary 104
chaPter 8 anaLogy coMParisons 105
Technique Description 105
When Applicable 106
Inputs and Outputs 106
Major Steps in Applying the Technique 107
Use of Results 109
Resource Requirements 109
Reliability 109
Selection Criteria 110
Resource Requirements 110
Applications 111
Outputs 112
Summary 113
chaPter 9 PLan evaLuation 115
Technique Description 116
Using the WBS for Risk Identification 116
Using Specifications for Risk Identification 117
Using Statements of Work (SOWs) for
Risk Identification 118
Developing a Technical Risk Dictionary
or Risk Register 118
Using Other Plans for Risk Identification 120
When Applicable 120
Inputs and Outputs 120
Major Steps in Applying the Technique 120
Use of Results 121
Resource Requirements 121
Reliability 121
Selection Criteria 122
Resource Requirements 122
Applications 123
Outputs 125
Summary 125