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Risk Definition
Risk can be termed as an incident, event, which could have an impact on the project.
Risk has a probability of its occurrence. Based on the identification and analysis
it can have high or low probability. Similarly risk can have high, medium or low
impact.
Risk can be termed as positive or negative. Negative risk occurs due to certain
uncertainties that could harm the project. Positive risks can be termed as events,
if they occur could provide an opportunity to the project ? cost saving, quality
enhancement etc.
Why does it occur?
Risk occurs because our project plan suffers from various uncertainties:
1)
Our project
plan is based on assumption, which might affect the outcome of the results.
2)
During project
plan we have to face the external environment changes.
3)
During project
phases we may encounter resource issues, project scope issues, etc.
4)
We may encounter
problems related to poor design, planning, quality etc.
How does it affect the project?
In an ideal situation, Project should not suffer from its desired outcomes ? schedule,
scope, cost etc. But based on above factors, project might get affected in all possible
areas ? Cost, Scope, Time, and Quality etc. If the whole objective to delivery the
project in agreed scope, cost and time is not achieved then project can be termed
as failure.
Role of project manager in Risk Management.
During planning, Project manager needs to look at all the aspects of risks and carefully
planned all the risks associated with Project. Project manager should thrive to
minimize the impact of negative risk and seize the opportunities that are positive
and conducive to the project.
Risk Management in PMP framework
PMP Framework
divides the Risk management into five main processes.
a.
Risk Management
Plan
b.
Risk identification
c.
Quantitative
analysis
d.
Qualitative
analysis
e.
Risk response
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