PMI RMP – MONITOR RISKS

1. INTRODUCTION

Hi and welcome back again to the last risk management process monitor risks. It’s the only risk management process that is a part of the monitoring and controlling process group. So we were done with five planning processes, one executing process and the final one is the monitoring and controlling process monitor risks. It’s the process monitoring the implementation of the agreed upon risk response plan, tracking identified risks, defining and analyzing new risks and evaluating the risk process effectiveness throughout the project. So this is exactly what we are going to do in the monitor risks process. It’s the process of monitoring the implementation of the risk response plans. Also we are going to track the already identified risks in the risk register.

We are going to define and analyze new risks and evaluate the risk process effectiveness. The key benefit of this process is that it enables project decisions to be made based on current information about the overall project risk exposure and individual project risks. So the monitor risks process will be very supportive in decision making throughout the project line as all the decisions we are going to take will be based on the current information about the overall project risk exposure. This process is performed throughout the project and this effectiveness of all the project risk management processes should be reviewed during the process to provide improvements to the management of the current project.

The effective communication needs to be maintained especially between the risk owner or the risk action owner and the project manager so that the designated stakeholders accept accountability for controlling the potential outcomes of specific risks. So effective open and honest communication, especially between the risk owner and risk action owners and the project manager is a critical success factor for this process. The risk action owner should keep the risk owner await of the status of the response actions so that the risk owner can decide when the risk has been effectively dealt with or whether additional actions need to be planned and implemented.

So the risk or action owner will support the risk owner in making sure that the implemented risk response is enough or additional actions as required. It’s the decision of the risk owner depending on the status given by the risk action owner. Now, an important tool used in the monitor risks process is the risk reassessment. Risk reassessment or reassessing risks on the project might occur for few typical reasons as per the project or the practice standard of risk management. First of all, an occurrence of a major or unexpected risk or the need to analyze a complex change request at the end of the phase through the gate review or the phase end review. A project replanning or major plan elaboration periodic reviews to ensure that the information remains current.

These are the reasons to perform the risk reassessment, which is one of the most important tools in the monitor risks process. Now, the objectives of monitor risks process on high level basis are what are the primary objectives of monitoring risk? Manage the contingency and management reserves on the project so managing and controlling the reserves and the remaining reserves is part of the monitor risk process. Create workarounds workarounds are actions taken to deal with unidentified risks which occur on the project. Monitor the project risk overall refine and update the risk register to keep an up to date risk registered perform additional risk identification, qualitative and quantitative risk analysis and risk response planning number five system sentence number five represents exactly the definition of the risk reassessment.

We are identifying the risks, performing qualitative and quantitative analysis and planning for the risk responses. reestimate the project keep the stakeholders informed about the status of the risks on the project and communicate about the risks. Create risk related lessons learned evaluate the risk impact on the scope, schedule, cost and other change requests. These are the major high level objectives of the risk monitoring process. At the end of the project, an integrated analysis of the risk management process should be carried out with a focus on longterm process improvements. As the monitor risks is the last process in the risk management knowledge area. All the actions need to be performed at the closing phase of the project regarding the risk management will be performed as a part of this process.

As the project closure, the project manager should ensure that a description has been given of the closure of every single risk in the risk registered and this description might be that this risk was expired or risk did not occur, or this risk occurred. A description need to be given for each risk. One way to measure the status of the project is to include the evaluation of risks. You might check the number of identified risks that were not in the original risk evaluation, how many risks were identified throughout the project and these risks were not identified earlier in the planning phase or the number of workarounds needed on the project. What are the critical success factors? First of all, you need to integrate the risk monitoring with the project monitoring and controlling as the risk monitoring process is part of the monitoring and controlling process group.

The project management plan should include actions required to monitor the project risks continuously. Monitor risk trigger conditions risk triggers are early warning signs that an accepted risk is about to occur. Checking for speciality defined risks that may trigger conditional responses. The responsibility of the risk action owner includes collaboration with the risk owner under the overall authority of the project manager. The last critical success factor is to maintain the risk awareness. Risk management reports should be a regular item on every status meeting agenda to ensure that all team members remain aware of the importance of risk management and ensure it’s fully integrated into all of the project management decisions. So risk awareness should be maintained throughout the monitor risk process.

The ITTOs of this process are very simple. We have the project management plan, specifically the risk management plan as project documents you will need the lessons learned to register the issue log the risk register and the risk report, work performance data and work performance reports as well tools and techniques, data analysis technique, technical performance analysis and reserve analysis meetings and risk audits. I’m going to explain also the risk reassessment and the risk workarounds in addition to the tools and techniques as per the practice standard of risk management. The outputs will be the work performance information change requests, project management plan updates, few project documents updated as shown in a front view and the organizational process assets updated due to the risk related lessons learned captured on this process. This is all for the introduction. Thank you so much. I’ll see you at the next slide.

2. INPUTS

Hi and welcome back again. So now we want to know what are the inputs I need to have before I start the risk monitoring process? Very few inputs for this process, starting with the project management plan, specifically the risk management plan as it provides guidance on how and when project risks should be reviewed, which policies and procedures should be followed. Now, during the first process which is planned risk management, we thought in advance how we are going to monitor the project risks, what’s the frequency of the risk audits, risk reviews, who will perform these tasks. All this was documented in the risk management plan.

We will need also a few project documents, the lessons learned register from previous similar projects, the issue log that is used to see if any of the open issues have been updated. The risk register is the key input for this process. It includes so far the identified project risks, what are the risk owners, the risk action owners, what are the agreed upon risk response plans for these risks and specific implementation actions. We will need also the risk report as it includes an assessment of the current overall project risks. Always remember that the risk register for the individual project risks while the risk report is for the overall project risk.

We will need the work performance data as the monitor risks process is part of the monitoring and controlling processing group. In this type of processing group, we are going to analyze and compare what was the plan and what’s the actual so the actual data of the project status is documented as a part of the work performance data and the work performance reports as well as it provides information from performance measurement that can be analyzed. These are the only four inputs you will need for the monitor risks process. Thank you so much. I see the following lecture.

3. TOOLS AND TECHNIQUES

Hi and welcome back again. So what are the tools and techniques of the monitor racks process? First of all, the data analysis techniques technical performance analysis. It compares technical accomplishments during the project execution to the schedule of technical achievement. Such technical performance measures includes the weights, transaction times, for example, for the web development projects, the storage capacity of the software deviations as a result of the technical performance analysis can indicate the potential impacts of threats or opportunities. So as from the name, it’s the technical analysis.

So we are going to take technical figures, technical measures from the project current status and wherever there is a deviation between the planned and the actual numbers, there is an impact of a threat or opportunity on the project. The second data analysis technique, the reserve analysis technique to determine the essential features and relationships of components in the project management plan to establish a reserve for the scheduled duration, budget estimate, cost or funds for the project. So, through this data analysis technique, we are going to monitor the project contingency and management reserves. Tracking the state of reserves through the project execution will provide summary information as to the evolution of the status of the corresponding risks.

Now, as a result of performing the reserve analysis technique, we will have the risk reserves report which keeps a running balance of the remaining reserve and helps the project manager control the reserve. I will show you now the risk reserves report, which is a very useful tool for the risk manager or the project manager. In general. This report keeps aligning balance of the remaining reserves, contingency and management reserves and helps the project manager control the project reserves. It’s the output of performing the reserve analysis data analysis technique. Money or time is added when activities are completed cheaper or faster, they are added to the reserves and money is deducted when it’s used for the accepted already identified risks.

The reserve report will look after the contingency and management in the reserves. Not only the contingency reserves lock into your organizational process assets of your company. To find out the template used for the reserves report, here is an example of the risk reserves report showing a project which was started on January 14. Today. It’s June 14. So the red line here shows the cost baseline. This is the cost baseline, the remaining contingent reserves shown here and the project estimates. The cost estimates is shown through this dotted line. Now, as I explained earlier in the previous section, the total cost baseline of the project equals the estimates of the activities here plus the contingency reserves.

So at January 14, the cost baseline is 1,000,200, the cost estimates is 1 million and the contingency reserves are $200,000. On June 14, there is $90,000 which was consumed from the contingency reserve. So, just by looking on this reserves report, you can know the overall status of the risks identified on your project. The second important technique or tool is the risk audits. Risk audits is frequently performed in the monitor risks process. It takes a look at what the project team has done for risk management and whether it has worked. It looks backward in time to what has occurred. So this is the key word of the risk audit. It will measure the effectiveness overall of the risk management activities on your project and it will look backward, not forward.

Now, it might include reviewing if the risk owners have been assigned to each risk, determining if risk owners are effective so far, examining and documenting the effectiveness of the general risk management activities on the project and the effectiveness of the contingency and fallback plans you planned earlier to deal with the accepted risks. This is a high level description of what we are going to do through the risk audits. As a result of risk audits, corrective action may be taken. Risk owners might be changed. Contingency and fallback plans for risks might be adjusted. Those results become a part of the historical records. A corrective action is a type of the change requests.

I’m going to explain briefly the change requests in the PM book section, the Integration Management Knowledge Area. For now, you need to know that the corrective action and the preventive action are types of risk change requests. It can be performed by the project manager or a third party risk audit group. It’s preferred to be conducted by a third party, but still it’s allowable for the project manager to perform a risk audit on the project. The third tool is performing meetings and we have a very specific meeting called Direct Review. It’s a way to monitor the risks and to manage changes on the project. It logs forward in time to what should happen for arrest. A risk review board should include people who have not been part of the risk management process for the project to date.

This board generally does not include the project manager of the project being reviewed. So who will perform the risk review on your project? The risk review board and this risk review board should be people from outside the project, people who did not participate in the risk management on your project. And the project manager is not allowed to be a part of the risk review board. Now, what are the results of the risk reviews? Additional risk response planning ideas changing the order of top risks on the project adjusting the severity of actual risks monitoring residual risks reviewing all workaround situations making changes to the project management plan when a new responses are developed.

Usually these are the results of the risk reviews. Additional risk monitoring tools and techniques the Risk Reassessment now additional monitoring tools and techniques as per the practice standard of risk management. The most important one and the critical one for the monitor risks process is called the risk reassessment. The primary objective is to ensure that the full risk management cycle is repeated as required to ensure effective control. It involves identifying risks, qualitative risk analysis, quantitative analysis if needed, and risk response planning. So this is exactly what we are going to do in the risk assessment. We are repeating the full risk management cycle.

Whenever you identify a risk, you need to document this risk in the risk register, perform qualitative analysis, quantitative analysis if needed, and the risk response planning as well. Risk assessment might occur when new risks are identified and when changes occur on the project. Now, the primary reasons for performing a risk assessment I listed them in the introduction lecture. If you don’t remember them, refer back to the introduction lecture of this section. They are very important for the exam. Two major time. One, risk reassessment might occur when new risks are identified. When changes occur on the project. These are the primary two times when risk assessment might occur.

It’s the project manager role to look for new risks and to schedule additional risk identification sessions as required based on the current project needs and situation. The last tool we have, the workarounds. It’s an unplanned response to an unidentified risk that occurs. So workarounds will deal with the unknown, unknown risks which we did not identify earlier. But these risks occur. High number of workarounds on the project indicates a lack of adequate project planning. And risk management is made to reduce the need for workarounds. So the water rounds are reactive action, they are not proactive action, and high number of water routes for a project is not something good.

Water rounds are reactive. While the project management and risk management is supposed to be proactive, project managers shall spend more time executing contingency and fallback plans than creating workarounds. Risk management is made to reduce the need for workarounds. So the workarounds are the opposite of the plan response. They are unplanned responses and the high number four count on the project will lead to an indication that risk management was not performed properly. This is all for the tools and techniques of the monitor risks process. Thank you so much. I will see you at the next lecture.

4. OUTPUTS

Hi and welcome back again. So what are the outputs we are going to have from the monitor risks process? First of all, change requests such as recommended corrective actions and preventive actions to address project overall risks or individual risks. Those change requests are processed for review through perform integrated change control process. Whatever the change requested in the project, this change need to be addressed through the Perform integrated change control process as a part of the integration management knowledge area. For now, we need to know that performing risk audits and risk reviews will result with change requests. Project management plan updates usually results with updates to schedule cost quality, procurement and resources management plans.

The time and cost baselines of the project. The third output will be the organizational process assets updates. This is the only risk management process that will result with an update to the Opa. This process will lead to creation of risk templates such as risk register, including project risks and responses checklists and other data in addition to the risk related lessons learned. This is why the monitor risk process will create an output of the organizational process as its updates. The last output will be few. Project documents updated the assumption lock where new assumptions and constraints may be made and identified existing assumptions and constraints may be revised.

The issue Log Where issues are identified as part of the monitor risks process, they must be recorded in the issue log. The lessons learned registered updated with any risk related lessons learned during the risk reviews to be used for future projects. The risk report is updated to reflect the current status of major individual project risks and current level of the overall project risk. And finally, we have the risk register that will be updated with the outcomes of the risk audits, updates to previous parts of risk management, including the identification of new risks, closing of outdated risks and details of what happened when risk occurs. These are the five project documents that might get updated as an output of the monitor risks process. Thank you so much much. I see you the following glitch.

5. SUMMARY

Hi and welcome back again as a summary of the monitor risks process. Now, the objective of the monitor risks process is to manage the project according to risk management plan and risk response plans recorded and updated in the risk register and the risk report. It involves monitoring, ensure compliance, measure, take corrective actions, evaluate effectiveness reassess and refine contingency and management reserves must be controlled, not just used, for any need that arises. Do not assume all the risks have been identified in the identified risk process.

The risk identification process is an iterative process throughout the project lifecycle and you should keep looking for new risks throughout the project. Risk management should be one of the most important topics at each team meeting agenda. Now, workarounds should be less frequent than implementing risk response plans. Taking corrective action involves taking measures of performance, taking action and evaluating effectiveness of the corrective action. The more you communicate about risks, the less likely they are to occur. Communication shall be maintained with all relevant stakeholders. Prove the effectiveness of risk management by showing and reporting the results of the risk management activities.

Now, risk response audits helps you determine lessons length what are the key terms you should be aware in the monitor risks process?Monitor Risks Process ensure compliance respond to triggers manage reserves workarounds measure earn value analysis corrective action evaluate the effectiveness risk estimate, refine risk review, technical performance measurement, risk assessment, risk audit and risk reserve report. Now, what are the activities included in monitor risks process? Managing the risk management plan risk response plan watching for risk triggers keeping track of the identified risks managing the reserves.

The contingency and management reserves ensuring the execution of the risk management plan and risk response plan dealing with risks that were not identified performing workarounds only when needed performing risk audits and risk reviews coming up with additional risk response planning ideas taking corrective actions to adjust the severity of actual risks revising watch list or nontop risks to see if the rankings of the nontop risks need to change or if risk responses need to be determined. Collecting and communicating risk status, communicating with stakeholders about risks at a high level. Those are the activities included in the monitor risks process. Thank you so much. I will see you at the next section.