In PRINCE2 7, the Risk Practice addresses both threats and opportunities. When dealing with opportunities (positive risks that could benefit the project), there are five key response types that project managers can employ.
**Exploit** - This response aims to ensure the opportunity definitely happe…In PRINCE2 7, the Risk Practice addresses both threats and opportunities. When dealing with opportunities (positive risks that could benefit the project), there are five key response types that project managers can employ.
**Exploit** - This response aims to ensure the opportunity definitely happens. The project team takes active steps to guarantee the beneficial outcome materializes. For example, if there is a chance to complete work ahead of schedule, additional resources might be allocated to make certain this occurs.
**Enhance** - This approach seeks to increase either the probability of the opportunity occurring or its positive impact on the project. Actions are taken to maximize the potential benefit. This might involve investing in better equipment or training to improve the likelihood of achieving cost savings.
**Share** - This response involves partnering with a third party who is better positioned to capture the opportunity. The benefits are then divided between the parties. Joint ventures or partnerships are common examples where both organizations can gain from the positive outcome.
**Reject** - Sometimes opportunities are simply not pursued. This occurs when the effort required to capture the benefit outweighs the potential gain, or when the opportunity falls outside the project scope. The opportunity is acknowledged but consciously declined.
**Prepare contingent plans** - This involves creating plans that will be activated if the opportunity materializes. Resources and actions are prepared in advance but only deployed when the favorable conditions arise.
Effective opportunity management requires the Project Manager to identify potential benefits, assess their probability and impact, select appropriate responses, and assign owners responsible for managing each opportunity. This proactive approach ensures projects can capitalize on favorable circumstances while maintaining focus on delivering expected benefits to the organization.
Risk Response Types for Opportunities
Why is this Important?
Understanding risk response types for opportunities is essential in PRINCE2 because projects are not only about managing threats but also about maximizing potential benefits. Organizations that effectively exploit opportunities can deliver greater value, complete projects faster, or reduce costs. This topic is frequently tested in the PRINCE2 Foundation exam as it demonstrates your understanding of proactive risk management.
What are Risk Response Types for Opportunities?
In PRINCE2, opportunities are uncertain events that, if they occur, would have a positive effect on project objectives. There are four main response types for opportunities:
1. Exploit This response aims to make the opportunity certain to happen. The project team takes proactive steps to ensure the positive outcome occurs. For example, if there is an opportunity to finish early by using a new technology, the team would secure that technology and implement it.
2. Enhance This response increases the probability and/or impact of the opportunity occurring. Actions are taken to make the positive event more likely or to amplify its benefits when it does occur.
3. Share This involves partnering with a third party who is better positioned to capture the opportunity. Both parties benefit from the positive outcome. This is often done through joint ventures or partnerships where risks and rewards are distributed.
4. Reject Sometimes called 'accept' in other frameworks, this means acknowledging the opportunity but choosing not to take any specific action to pursue it. The opportunity may still occur naturally, but no resources are allocated to increase its likelihood.
How it Works in Practice
When an opportunity is identified during a project, the Risk Owner assesses it and selects the most appropriate response based on: - The potential benefit to the project - The cost of pursuing the opportunity - The probability of the opportunity occurring - The project's risk appetite
The chosen response is documented in the Risk Register, and specific actions are assigned to risk actionees who implement the response strategy.
Exam Tips: Answering Questions on Risk Response Types for Opportunities
Tip 1: Know the Key Differences Exploit makes the opportunity certain, while Enhance increases probability or impact. Exam questions often test whether you can distinguish between these two responses.
Tip 2: Remember Share Involves Third Parties When a question mentions partnerships, joint ventures, or involving external organizations to capture benefits, the answer is typically Share.
Tip 3: Reject Does Not Mean the Opportunity is Ignored Reject means a conscious decision not to pursue it actively. The opportunity is still monitored and recorded.
Tip 4: Look for Action Words in Scenarios Questions using words like 'guarantee' or 'ensure' often point to Exploit. Words like 'increase likelihood' or 'maximize impact' suggest Enhance.
Tip 5: Consider Cost-Benefit in Scenarios If pursuing an opportunity costs more than its potential benefit, Reject would be the logical choice. Exam scenarios may test this practical judgment.
Tip 6: Do Not Confuse with Threat Responses Opportunities use Exploit, Enhance, Share, and Reject. Threats use Avoid, Reduce, Transfer, and Accept. Ensure you match responses to the correct risk type.