Unit 6 Assignment 2
Without going into details regarding the theory of project risk management we present still, the definition of this concept as it is proposed by the Project Management Institute professionals who, in The Project Management Body of Knowledge Guide, [Duncan, W., R.,
1996] define risk management as a systematic process of identification, analysis and response to the project risks, process comprising the risk identification, risk quantification, risk response plan, risk response control sub processes.
A closer look to the literature or project risk management standards will make the reader understand that depending on the author of the methodology, the name or the order of these sub-processes is different. Thus, risk identification and risk quantification are sometimes taken together and are called risk assessment or risk analysis; the risk response plan is sometimes met under the name of risk mitigation plan; the risk response plan and the risk control plan are sometimes taken together under the name of risk management plan.
2 Inside Risk Assessment
All the elements of the risk management cycle are important but risk assessment is the headstone for all the other elements.
The problem of risk assessment is an extremely complex one. When a risk assessment process is started, this process has to analyze several aspects in parallel.
First, we can talk about the stake at risk and how important vulnerabilities are in the disaster scenarios taken into account, the outcome being a way to reduce the resulting risks.
Second, we must understand that the probability of an event depends on a series of external factors as well as on internal factors of the entity (business/process/project) for which the risk assessment is made. It is essential to know and control as many of these factors as possible.
Risk management and analysis: risk assessment (qualitative and quantitative)
The internal factors include historical data from within the entity, collected in time, as it is necessary
1996] define risk management as a systematic process of identification, analysis and response to the project risks, process comprising the risk identification, risk quantification, risk response plan, risk response control sub processes.
A closer look to the literature or project risk management standards will make the reader understand that depending on the author of the methodology, the name or the order of these sub-processes is different. Thus, risk identification and risk quantification are sometimes taken together and are called risk assessment or risk analysis; the risk response plan is sometimes met under the name of risk mitigation plan; the risk response plan and the risk control plan are sometimes taken together under the name of risk management plan.
2 Inside Risk Assessment
All the elements of the risk management cycle are important but risk assessment is the headstone for all the other elements.
The problem of risk assessment is an extremely complex one. When a risk assessment process is started, this process has to analyze several aspects in parallel.
First, we can talk about the stake at risk and how important vulnerabilities are in the disaster scenarios taken into account, the outcome being a way to reduce the resulting risks.
Second, we must understand that the probability of an event depends on a series of external factors as well as on internal factors of the entity (business/process/project) for which the risk assessment is made. It is essential to know and control as many of these factors as possible.
Risk management and analysis: risk assessment (qualitative and quantitative)
The internal factors include historical data from within the entity, collected in time, as it is necessary