5 Identify Risk
5 Identify Risk
5 Identify Risk
Objectives
Recognize identifiable
Recognize all the identifiable risks to project objectives.
risks
Make risk identification Make risk identification process iterative to ensure that the process is not
process iterative only restricted to planning phase.
Identify potential
Identify potential responses at the time when a risk is first identified.
responses
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Objectives of Identify Risks Process
Following are the critical success factors for Identify Risks process:
Multiple
Early identification
perspectives
Explicit
identification of Objectivity
opportunities
Following are the critical success factors for Identify Risks process:
Explicit
identification of Objectivity
opportunities
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Critical Success Factors
Following are the critical success factors for Identify Risks process:
Explicit
identification of Objectivity
opportunities
Following are the critical success factors for Identify Risks process:
Explicit
identification of Objectivity
opportunities
Following are the critical success factors for Identify Risks process:
Explicit
identification of Objectivity
opportunities
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Critical Success Factors
Following are the critical success factors for Identify Risks process:
Explicit
identification of Objectivity
opportunities
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Following are the critical success factors for Identify Risks process:
Emergent Complete risk ● Limiting risk identification to the immediate project team is
identification statement
unlikely to expose some identifiable risks.
Explicit
identification of Objectivity
opportunities
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Following are the critical success factors for Identify Risks process:
Explicit
identification of Objectivity
opportunities
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Critical Success Factors
Following are the critical success factors for Identify Risks process:
Emergent Complete risk ● Detailed risk descriptions with description of uncertainty and
identification statement
its cause and effects should be mentioned as early as possible
in the project lifecycle.
Comprehensive Ownership and
identification level of details
Explicit
identification of Objectivity
opportunities
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Following are the critical success factors for Identify Risks process:
Explicit
identification of Objectivity
opportunities
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Following are the critical success factors for Identify Risks process:
Multiple Objectivity:
Early identification
perspectives
● Human intervention is susceptible to bias when dealing with
Iterative Risks linked to uncertainty. This occurs as people apply heuristics. This
identification project objectives
sensitivity should be dealt during risk identification process.
Emergent Complete risk ● Sources of bias should be exposed and their effect should be
identification statement
managed proactively.
● The aim is to minimize subjectivity, and allow open and honest
Comprehensive Ownership and
identification level of details identification of as many risks to the project as possible.
Explicit
identification of Objectivity
opportunities
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Inputs, Tools and Techniques, and Output
Following are the inputs, tools and techniques, and outputs required for Identify Risks process:
Inputs Tools and Techniques Outputs
● Risk management plan ● Documentation reviews ● Risk register
● Scope baseline ● Information-gathering
● Activity cost estimates techniques
● Activity duration estimates ● Checklist analysis
● Stakeholder register ● Assumptions analysis
● Cost management plan ● Diagramming techniques
● Schedule management plan ● SWOT analysis
● Quality management plan ● Expert judgment
● Human resource management plan
● Project documents
● Procurement documents
● Enterprises environmental factors
● Organizational process assets
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Inputs
Contains a cost management approach specific to the project that helps to generate or
Cost management plan
mitigate risks.
Includes guidelines for handling changes to the schedule, updated risks, and associated
Schedule management plan
response plans.
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Inputs (contd.)
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Tools and Techniques
Following are the tools and techniques for Identify Risks process:
Documentation reviews +
Information-gathering techniques +
Checklist analysis +
Assumptions analysis +
Diagramming techniques +
SWOT analysis +
Expert judgment +
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Following are the tools and techniques for Identify Risks process:
Documentation reviews -
A structured review of the project documentation may be performed including plans, assumptions,
previous project files, agreements, and other information.
Information-gathering techniques +
Checklist analysis +
Assumptions analysis +
Diagramming techniques +
SWOT analysis +
Expert judgment +
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Following are the tools and techniques for Identify Risks process:
Documentation reviews +
Information-gathering techniques -
These include data collection methods such as brainstorming, Delphi technique, interviewing, and root
cause analysis.
Checklist analysis +
Assumptions analysis +
Diagramming techniques +
SWOT analysis +
Expert judgment +
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Tools and Techniques
Following are the tools and techniques for Identify Risks process:
Documentation reviews +
Information-gathering techniques +
Checklist analysis -
Checklist analysis is an analysis which is conducted on the basis of historical information, as a
standardized way of identifying risks.
Assumptions analysis +
Diagramming techniques +
SWOT analysis +
Expert judgment +
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Following are the tools and techniques for Identify Risks process:
Documentation reviews +
Information-gathering techniques +
Checklist analysis +
Assumptions analysis -
Assumptions analysis is used to explore the validity of project assumptions.
Diagramming techniques +
SWOT analysis +
Expert judgment +
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Following are the tools and techniques for Identify Risks process:
Documentation reviews +
Information-gathering techniques +
Checklist analysis +
Assumptions analysis +
Diagramming techniques -
The diagramming techniques include cause-and-effect diagrams, influence diagrams, and process
flowcharts which helps in identifying the causes of risks.
SWOT analysis +
Expert judgment +
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Tools and Techniques
Following are the tools and techniques for Identify Risks process:
Documentation reviews +
Information-gathering techniques +
Checklist analysis +
Assumptions analysis +
Diagramming techniques +
SWOT analysis -
The SWOT analysis examines the project from the perspectives of strength, weakness, opportunity, and
threat.
Expert judgment +
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Following are the tools and techniques for Identify Risks process:
Documentation reviews +
Information-gathering techniques +
Checklist analysis +
Assumptions analysis +
Diagramming techniques +
SWOT analysis +
Expert judgment -
Expert judgment includes the inputs given by subject matter experts or team members who have the
relevant knowledge and experience on similar business areas or projects.
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Jeremiah has begun looking for risks on his project, which is to a deliver a new product for his
company. In fact, his company has no experience at all in this area but the company’s leadership
thought that the return on investment was worth it.
During initial planning, Jeremiah is concerned with the cost and duration estimates that his team
delivers to him. Since this is a new type of project, and they are inexperienced, he does not want
to leave anything to chance.
He decides to use assumptions analysis and documentation reviews to determine how accurate
the estimates might be. He also interviews subject matter experts on other projects to increase his
confidence level with the estimates.
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Assumption Analysis and Documentation Reviews—Example (contd.)
At the conclusion of his analysis, he determines that the existing estimates are as accurate as they
could possibly be under the circumstances.
Jeremiah then decides to ask for additional contingency funds to account for the uncertainty and
to protect the project budget. Jeremiah’s use of multiple tools enabled him to determine the
uncertainty of his project estimates and to ask for appropriate funding.
During the life cycle of his project, he was then able to capture more accurate data that he will use
on future projects.
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The three categories of tools and techniques required to identify risks are as follows:
● Historical review is based on past occurrence of risks, either in the current project
or other similar projects within the organization, or comparable projects in other
Historical review organizations.
● It relies on careful selection of comparable situations, which are genuinely similar
to the current project, and are filtered to select the only relevant previous risks.
Current assessment
Creativity technique
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The three categories of tools and techniques required to identify risks are as follows:
● They rely on current project, analysis against the framework, and models to find
uncertainties.
Historical review ● They do not rely on external reference points, but are based purely on
examination of the project.
● Current assessments are based on present data (documentation reviews,
rrent assessment
Current assessments information-gathering techniques, assumption analysis, diagramming technique,
and SWOT analysis).
Creativity technique
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Tools and Techniques—Categories
The three categories of tools and techniques required to identify risks are as follows:
Creativity technique
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Choose checklist (historical review) with assumption analysis (current assessment) and brainstorming
(creativity technique).
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Given below are the other tools and techniques of Identify Risks process.
Checklist, Forms,
Crawford Slip Analogy
and Templates
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Interview with SMEs
It involves engaging:
● consultants; and
● project team.
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1 2 3 4
Introduce the Introduce the Develop the
Define the scope
facilitator interviewees questions
5 6 7 8
Receive the Fill up the register
Send the questions Consolidate the
answers from with the list of
to interviewees responses
interviewees identified risks
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Brainstorming Technique
Identification of
many risks
Team must be
available
Leads to chaos, if
executed
inadequately
Highly creative
and synergetic
sessions
Encourages
teamwork
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Brainstorming Process
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Delphi Technique
A type of interview
with SMEs
The interviews
are
anonymous
Slow and requires
hard work
Used when there are
conflicts or when
brainstorming
is not
Used to get
recommended
comments from
competitors
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1 2 3 4
Introduce the Develop the Introduce the
Define the scope
facilitator questions interviewees
5 6 7 8
Distribute the Receive the Consolidate the Redistribute the
questions/survey answers responses questions
9 10
Fill up the register
Consolidate the
with the
final results
identified risks
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Nominal Group Technique
Individual
brainstorming
Allows a certain
degree of
prioritization
Reduces the chaos
of brainstorming
Mix of individual
and group
participation
Fast and
effective
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1 2 3 4
Introduce the
Introduce the
Define the scope participants Schedule the meeting
facilitator
(between 6 and 8)
5 6 7 8
Start the meeting Each participants Facilitator writes
Each participants
and state the rules, creates his/her own down the first risk of
orders his/her risks
time, and process risk list each participant
9 10 11
Facilitator writes Fill up the list of
Consolidate the final identified risks
down the second risk
result (prioritized)
of each participant
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Uses a slip or a
Group consolidation piece of paper
like post-it®
Individual brainstorming
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Crawford Slip Process
1 2 3 4
Introduce the
Introduce the
Define the scope participants (between Schedule the meeting
facilitator
6 and 8)
5 6 7 8
Start the meeting by Each participants Collect slips and Distribute the list to
stating the rules, time, writes down one risk consolidate the list of the participants for
and number of risks for a minute identified risks final comments
9 10
Consolidate the final Fill up the register
result with identified risks
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Analogy Technique
Available
information is A reference is needed.
adjusted to suit the
current scenario
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Analogy—Process
4 5 6
Adapt the lists of
Develop the initial Distribute the list
risks to the current
lists of risks to team members
projects
7 8 9
Team analyzes the Fill up the register
Consolidate the
preliminary list of with the identified
final results
risks risks
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Checklists, Surveys, and Templates
Checklists, surveys, and templates are some of the commonly used techniques
for identifying risks on the project.
● The critical success factor for these techniques is the availability of data from
within and outside the organization.
● These techniques are based on the concept that no new project has a
complete new set of risks.
● These techniques help to refine the list of risks and they use the risk
breakdown structure, which is usually defined as a part of the risk
management plan.
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Assumptions Analysis
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Checklist Analysis
Checklist analysis is the process of systematically evaluating the pre-created checklists and developing
a checklist based on relevant historical information.
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SWOT Analysis
SWOT analysis is a popular tool which is used for risk identification. In this technique, strengths and
weaknesses that are of internal origin, that is, related to the organization are identified. Also,
opportunities and threats of external origin are identified.
Helpful Harmful
to achieve the to achieve the
objective objective
(attributes of the
Internal origin
organization)
S W
Strengths Weaknesses
(attributes of the
External origin
environment)
O T
Opportunities Threats
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Cause-and-Effect Diagram
Overworked Noise
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The ABC Company has identified a problem during a recent program review. Management realizes
that the same types of risk events are occurring on almost every project and they cannot seem to
understand the reason.
So, they hire an outside risk consultant, who sets out to investigate the matter. The consultant
begins by looking at historical documentation on projects that have been performed over the last
three years.
During the review of project documents, the consultant begins to discover that, most risks are
related to human resources and scope. The consultant then employs multiple diagramming
techniques to assign each risk area to common root causes. It is then evident that Pareto’s Law is
clearly defined with the results.
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Root Cause Analysis—Example (contd.)
Pareto’s Law generally states that the smallest number of causes will result in the largest number
of problems. By working in reverse from effect to cause, the consultant is able to pinpoint which
root causes are to blame for the majority of the risks within this company.
There is a lack of training for the employees, too many understaffed activities during execution and
poor requirements documentation.
By using root cause analysis, and understanding Pareto’s Law, the consultant was able to track
down the root causes and report it back to the company with his recommendations. The ABC
company then utilizes the results to begin correcting the problem.
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Output
Output Description
The risk register contains the list of identified risks and potential responses. When
complete, the risk register will ultimately contain the outcomes of the other risk
Risk register management processes, including the results of the qualitative risk analysis,
quantitative risk analysis, and risk response planning. It also includes risk actions, risk
statuses, and names of risk owners.
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Prompt Lists
A prompt list refers to several risk categories that may be presented as a RBS and used when
identifying risks in a project.
Prompt lists include the following:
The PESTLE prompt list is The TECOP prompt list is The SPECTRUM prompt list is
determined by political, determined by technical, determined by socio-cultural,
economical, social, technological,
undertaking the project environmental, commercial, political, economic, competitive,
ascertaining the costs and benefits of
legal, and environmental factors. operational, and political factors. technological, regulatory or legal,
uncertainty or risk, and market
factors.
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Risk Categories
Best Practices
The best practices in the Identify Risks process include the use of structured risk descriptions which
can ensure clarity. Risk meta-language offers a useful way of finding the causes and effects of a risk.
Meta-language describes each risk using three-part statements in the following forms:
Cause
(Fact or condition)
Risk
(Uncertainty)
Effect
(Possible result)
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Historical Documentation
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Documenting the Results
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Summary
Here is a quick ● The objectives of Identify Risks process are identify risks, document risks,
recap of what was and categorize risks.
covered in this ● The critical success factors for Identify Risks process are early identification,
lesson:
multiple perspective, iterative identification, risks linked to project
objectives, emergent identification, complete risk statement,
comprehensive identification, ownership and level of details, explicit
identification of opportunities, and objectivity.
● The three categories of tools and techniques of Identify Risks process are
historical review, current assessments, and creativity technique.
● The best practices in Identify Risks process include the use of structured risk
descriptions which can ensure clarity.
● Recording is one of the important activities, which helps in capturing all the
relevant information on each identified risk.
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