The Risk Management Procedure in PRINCE2 7 is a structured approach for handling uncertainty that could affect project objectives. This technique consists of five key steps that work together to ensure risks are properly addressed throughout the project lifecycle.
The first step is Identify, where…The Risk Management Procedure in PRINCE2 7 is a structured approach for handling uncertainty that could affect project objectives. This technique consists of five key steps that work together to ensure risks are properly addressed throughout the project lifecycle.
The first step is Identify, where potential risks are captured and documented in the Risk Register. This involves recognizing both threats (negative risks) and opportunities (positive risks) that may impact the project. Various techniques like brainstorming, checklists, and lessons learned from previous projects support this activity.
The second step is Assess, which involves analyzing each identified risk to understand its probability of occurring and its potential impact on project objectives. Risks are typically evaluated using scales (such as very low to very high) and may be plotted on a probability-impact grid to help prioritize them effectively.
The third step is Plan, where appropriate risk responses are developed. For threats, responses include avoid, reduce, transfer, accept, or share. For opportunities, responses include exploit, enhance, share, or reject. Each response should have a clear owner responsible for implementation.
The fourth step is Implement, which involves executing the planned risk responses. This ensures that the strategies developed during planning are put into action and that risk owners carry out their assigned responsibilities.
The fifth step is Communicate, which runs throughout all other steps. This ensures that relevant stakeholders are kept informed about risks, their status, and any changes. Effective communication supports decision-making and maintains awareness across the project team.
The Risk Register serves as the central repository for all risk information, tracking each risk through these procedural steps. Regular risk reviews ensure the procedure remains effective and that the project team responds appropriately to changes in the risk profile. This systematic approach helps projects achieve their objectives while managing uncertainty.
Risk Management Procedure Technique in PRINCE2 Foundation v7
Why Risk Management Procedure Technique is Important
Risk management is essential in project environments because every project faces uncertainty. The Risk Management Procedure provides a structured approach to handling threats and opportunities that could affect project objectives. By following this technique, project teams can proactively address potential issues before they become problems, and capitalize on opportunities that could benefit the project.
What is the Risk Management Procedure?
The Risk Management Procedure in PRINCE2 is a systematic approach consisting of five steps that guide how risks should be handled throughout the project lifecycle. This procedure ensures consistency in how risks are identified, assessed, and controlled.
The Five Steps of the Risk Management Procedure:
1. Identify This step involves recognizing potential risks that could affect the project. Teams use techniques such as brainstorming, checklists, and reviewing lessons learned from previous projects. The goal is to capture both threats and opportunities in the Risk Register.
2. Assess Once risks are identified, they must be evaluated. Assessment has two parts: - Estimate: Determining the probability of the risk occurring and its potential impact - Evaluate: Comparing risks against each other to prioritize which ones need attention
3. Plan This step involves deciding how to respond to each risk. For threats, responses include avoid, reduce, transfer, accept, or share. For opportunities, responses include exploit, enhance, share, or reject.
4. Implement The planned responses are put into action. This includes assigning risk owners and risk actionees who are responsible for carrying out the response actions.
5. Communicate Risk information must be shared with relevant stakeholders throughout the project. This ensures everyone is aware of risks and their status, supporting informed decision-making.
How the Procedure Works in Practice
The Risk Management Procedure is not a one-time activity. It operates continuously throughout the project, with risks being regularly reviewed and updated. The Risk Register serves as the central repository for all risk information, documenting each risk through all five steps of the procedure.
Exam Tips: Answering Questions on Risk Management Procedure Technique
1. Memorize the five steps in order: Identify, Assess, Plan, Implement, Communicate. Questions often ask about the sequence or what happens at each step.
2. Understand that Assess has two parts: Estimate and Evaluate. Exam questions may test whether you know the difference between these sub-steps.
3. Know the risk responses: Be clear on which responses apply to threats versus opportunities. This is a common exam topic.
4. Remember that Communicate is ongoing: It happens throughout the procedure, not just at the end.
5. Distinguish between risk owner and risk actionee: The risk owner is accountable for managing the risk, while the risk actionee carries out the response actions.
6. Look for keywords in questions: Words like 'probability' and 'impact' point to the Assess step, while words like 'response' or 'action' point to Plan or Implement.
7. The procedure is iterative: Risks can return to earlier steps as circumstances change. New information might require re-assessment or new responses.
8. Connect to the Risk Register: Questions may ask where risk information is recorded. The Risk Register captures outputs from all steps of the procedure.