Understand risk identification, analysis, and response.
Covers the risk practice including risk management approach and risk register. Focuses on understanding threats and opportunities, risk appetite and tolerance, risk cause-event-effect relationships, risk exposure, risk probability and impact, risk ownership, risk planning, risk analysis, risk control, risk culture, decision bias, and recommended risk response types.
5 minutes
5 Questions
Risk Practice in PRINCE2 7 is a fundamental practice that ensures projects identify, assess, and control uncertainty throughout the project lifecycle. This practice recognizes that all projects face potential threats and opportunities that could impact objectives, and provides a structured approach to managing these uncertainties effectively.
The Risk Practice involves several key activities. First, teams must identify risks by examining what could affect the project positively or negatively. This includes reviewing project documentation, conducting workshops, and drawing on lessons from previous projects. Each identified risk is documented in the Risk Register, which serves as the central repository for all risk information.
Once identified, risks are assessed using two primary criteria: probability (how likely the risk is to occur) and impact (what effect it would have on project objectives if it materializes). This assessment helps prioritize risks and determine which require active management versus simple monitoring.
PRINCE2 7 defines several risk response strategies. For threats, these include avoid (eliminate the threat), reduce (minimize probability or impact), transfer (shift responsibility to a third party), accept (acknowledge and budget for consequences), and share (distribute the risk). For opportunities, responses include exploit, enhance, share, and reject.
The practice integrates with governance structures through defined roles. The Project Board has overall accountability for risk management, while the Project Manager handles day-to-day risk activities. Risk owners are assigned to specific risks to ensure accountability.
Risk management is not a one-time activity but continues throughout the project. Regular reviews ensure new risks are captured, existing risks are reassessed, and response effectiveness is evaluated. This ongoing approach helps projects adapt to changing circumstances while maintaining focus on delivering benefits within agreed tolerances.
Effective risk management contributes to project success by enabling informed decision-making and proactive responses to uncertainty.Risk Practice in PRINCE2 7 is a fundamental practice that ensures projects identify, assess, and control uncertainty throughout the project lifecycle. This practice recognizes that all projects face potential threats and opportunities that could impact objectives, and provides a structured approach…