Apply risk management approaches and response strategies.
Covers risk management approach and risk register. Focuses on understanding risk as both threats and opportunities, risk appetite and tolerance, risk cause-event-effect relationships, risk probability and impact, and risk ownership. Includes risk planning, analysis, and control, recommended risk response types, risk culture, decision bias awareness, and data-driven risk management.
5 minutes
5 Questions
In PRINCE2 7, the Risk practice provides a structured framework to identify, assess, and control uncertainty to improve the likelihood of project success. Risk is defined as an uncertain event that, should it occur, affects the achievement of objectives, encompassing both negative threats and positive opportunities.
The foundation of this practice is the Risk Management Approach, established during the initiation stage. This document defines the specific techniques, standards, and roles (such as Risk Owner and Risk Actionee) used to manage risk, ensuring alignment with the hosting organization’s risk appetite and tolerance. Central to tracking these uncertainties is the Risk Register, which logs details of identified risks including their status and proximity.
The management procedure follows a continuous, five-step iterative cycle:
1. Identify: Determining context (PESTLE analysis) and capturing specific risks.
2. Assess: Evaluating inherent and residual probability, impact, and proximity using tools like the probability impact grid.
3. Plan: Preparing specific responses. For threats, responses include avoid, reduce, transfer, share, accept, or prepare contingent plans. For opportunities, they are exploit, enhance, transfer, share, accept, or prepare contingent plans.
4. Implement: Executing the planned responses and monitoring their effectiveness.
5. Communicate: Ensuring stakeholders are informed via standard reports (e.g., Highlight Reports, End Stage Reports).
PRINCE2 7 specifically highlights the importance of the 'People' element, acknowledging that risk culture and human bias significantly influence how risks are perceived, prioritized, and reported. Ultimately, effective Risk practice is continuous, ensuring the project remains viable and aligned with the Business Case throughout its lifecycle.In PRINCE2 7, the Risk practice provides a structured framework to identify, assess, and control uncertainty to improve the likelihood of project success. Risk is defined as an uncertain event that, should it occur, affects the achievement of objectives, encompassing both negative threats and posit…