Project Portfolio Risk Management
As a critical concept in Project Portfolio Management (PPM), Risk Management involves identifying, analyzing and responding to project risks, and aims at increasing the likelihood and impact of positive events and reducing the likelihood of negative events in the project. PPM introduces a structured risk management process, which includes risk identification, risk assessment, risk response planning and risk monitoring, and control on a portfolio level. This ensures risk consideration in selection of projects, allocation of resources and decision-making on project continuation. By understanding potential risks across the portfolio, organizations can prepare for uncertainties, reducing the potential for harm and increasing opportunities for benefits.
Guide on Project Portfolio Risk Management
Project Portfolio Risk Management is essential for the successful execution and completion of any project.
What is it?
It is a process used to identify, assess and manage risk in the project portfolio which includes potential obstacles that could impede the progress, performance, or successful completion of a project.
Why is it important?
It helps in predicting any risk factors and allows the stakeholders to take preventive measures, alleviating the negative impact on project objectives such as scope, schedule, cost and the quality.
How it works?
It works in five steps:
1. Risk identification
2. Risk assessment
3. Planning for risk response
4. Risk monitoring, reporting and control
5. Plan execution and risk response tracking.
How to answer questions on Project Portfolio Risk Management in an exam?
• Be clear with the definition and importance of project portfolio risk management.
• Go step by step, explaining all the parts of how it works.
• Bring practical examples and situations.
• Mention the importance of each step in the Risk Management process.
Exam Tips: Answering Questions on Project Portfolio Risk Management:
• Understand the context and frame your answers accordingly.
• Always provide practical and appropriate examples.
• Use the specific terminologies associated with the process.
• Practise similar questions for better retention and quick recall during exams.
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