Here’s some basic vocabulary used in risk management:
Project Risk: A probable event that, if it occurs, will positively or negatively affect project constraints like budget, schedule, or quality. 🎯
Project Risk Management: The process of identifying, evaluating, and planning responses to uncertain events during a project. 🛠️
Watch List: Risks that don’t currently need planned responses but may require action if they become more likely. 👀
Risk Owner: An individual who monitors an assigned risk and leads preplanned responses. 🧑💼
Threats and Opportunities ⚖️
Risks can have positive (opportunities) or negative (threats) impacts. Here are some opportunities:
Combining orders for ZYX equipment (20+ items) could reduce costs by 20%. 💰
Training the team could complete work package 3.4 two days faster. ⏩
A more experienced resource could speed up critical path activity 4.7.2 by 10%. 🚀
Most threats can be mitigated by optimizing resources, using experienced staff, and providing training. 🛡️
Think About It 💭
Negative risks (threats) are like “anti-value,” eroding project value if they occur, similar to unexpected expenses reducing a household budget. Opportunities, like a bonus, can increase value. Maximize opportunities and minimize threats to deliver the most value! 💡
Risk Factors 🔍
When assessing risks, consider:
Probability: How likely is the risk to occur? 🎲
Impact: What’s the range of possible outcomes? 📊
Timing: When might it occur in the project life cycle? ⏰
Frequency: How often could it happen? 🔄
Risk Appetites and Thresholds ⚖️
These terms describe how much risk an individual or organization is willing to accept:
Risk Appetite: General level of acceptable risk (e.g., low tolerance for schedule delays). 🕒
Risk Threshold: Specific point where risk becomes unacceptable (e.g., no delays over 15 days). 🚫
Risk Averse: Low tolerance for negative impacts. 😨
Example: An organization may tolerate cost risks but not risks to customer satisfaction or reputation. 🌟
Risk Definitions Specific to Agile 🌀
Agile projects handle uncertainty well, especially with evolving scope. Key points:
Every agile backlog is risk-adjusted. 📋
Risks are identified and mitigated iteratively, often in daily standups. 🗣️
Spikes: Short iterations to explore risks or opportunities (e.g., testing file migration to prevent data loss). 🧪
Architectural Spike: Proof-of-concept to test new technology or processes. 🛠️
Fast Failure: Inducing early failure to redirect resources quickly, reducing costs. ⚡
Agile continuous improvement practices focus on maximizing value. For example, a risk-based spike might test cloud migration to ensure no file loss, reducing risks early. 🛡️