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Risk Identification

5 minutes 5 Questions

Risk identification is the process of discovering, documenting, and understanding potential threats, uncertainties, and exposures that could impact a project’s objectives. Identification generally begins with brainstorming sessions, stakeholder interviews, or expert judgement to uncover potential risks. The aim is to generate a comprehensive risk register, which serves as a starting point for risk analysis or risk response development. A thorough risk identification process is key for project managers, as it allows for risks to be proactively managed instead of reactively addressed.

Guide on Risk Identification in line with PMBOK Guide Seventh Edition

Risk Identification is a critical process within Project Management. It involves the recognition of potential risks that may impact the tasks, objectives, or goals of a project. It is a proactive approach to anticipate and manage uncertainties that can occur in any phase of the project lifecycle.

This is important as early identification allows for timely mitigation strategies, reducing adverse impacts on the project's timeline, budget, and quality. A robust risk identification process can also enhance project success, stakeholder satisfaction, and maintain the project's alignment with strategic goals.

It involves engaging all key stakeholders and using various techniques like brainstorming, SWOT analysis, expert judgment, and historical data review. Effective risk identification can be a determining factor of a project's success or failure.

Exam Tips: Answering Questions on Risk Identification
1. Understand the process of risk identification and the role it plays in project management.
2. Be able to determine appropriate techniques for risk identification based on the given scenario.
3. Know the importance and benefits of risk identification.
4. Consider the context of the given project and its potential risks when answering exam questions.
5. It's not just about recognizing potential risks, but also understanding the impacts and devising mitigation strategies.

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PMP - Risk Management Example Questions

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Question 1

While managing a software project, you encounter a situation where a coding error could result in a significant security flaw. Which risk identification technique is best suited to this situation?

Correct Answer: Technical reviews

In this scenario, the best suited risk identification technique is 'Technical reviews'. Technical reviews involve a thorough examination of the software's code, design and integration, which allows for early detection of any potential issues or flaws that might lead to security risks. The main focus here is to identify any coding errors that could compromise the software's security hence 'Technical reviews' are the most viable options. In contrast, other techniques such as 'Brainstorming', 'Interviewing' and 'Checklist analysis' can also identify risks, but they are less effective in this particular situation as they rely more on theoretical aspects or focus on more general aspects of the project rather than technical details. 'Brainstorming' is primarily used for generating ideas and is less about identifying specific technical risks. 'Interviewing' is often more focused on understanding people's perspectives or skills, rather than the technical aspects of the system. 'Checklist analysis' might overlook this intricate detail as it involves going through a predefined list of common risks, whereas this situation requires a deep understanding of less frequent but highly impactful risks like a coding error that could lead to a significant security flaw.

Question 2

You are implementing an ERP system in a large supply chain management company. One risk identified is the lack of user acceptance due to unfamiliarity with the system. How was this risk most likely identified?

Correct Answer: From past experiences with different projects

The risk of lack of user acceptance due to unfamiliarity with the system was most likely identified from past experiences with different projects. Organizations often rely on lessons learned from previous implementations to anticipate potential risks in new projects. In ERP system implementations, user resistance is a common issue observed in past projects, especially when users are introduced to new systems that alter their usual workflows. By reflecting on these past experiences, the project team can proactively identify and address such risks to ensure a smoother adoption process.

Question 3

Your project involves the construction of a high-rise building in a hurricane-prone area. You've identified a risk related to structure durability under high-force winds. Which risk identification method did you most likely utilize?

Correct Answer: Historical Analysis

Given the scenario, the risk identification method most likely utilized is Historical Analysis. This approach involves using data and experience from earlier similar projects to identify risks in the current project. Here, high-force winds in a hurricane-prone area related to the durability of a high-rise building structure would have been a situation that has occurred in the past. Thus, through historical analysis, this risk is identified for the current project. This is why the other answers are incorrect: Brainstorming is a creative problem-solving method that involves the generation of ideas by a group, this method may or may not identify this particular risk without the context of historical project experiences. The Delphi Technique involves a group of experts who anonymously reply to questionnaires and subsequently receive feedback in the form of the group response, aiming at a consensus. This would not necessarily provide concrete data-based risk identification as provided by historical analysis. SWOT Analysis is used to identify Strengths, Weaknesses, Opportunities, and Threats; it's a strategic planning tool more than a risk identification one.

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