The document discusses project risk management according to the Project Management Institute (PMI). It describes how PMI identifies six key processes for managing risk: plan risk management, identify risks, perform qualitative and quantitative risk analysis, plan risk responses, and monitor and control risks. The objective is to increase the probability of positive events and decrease the probability of negative events. It also notes that environmental factors and organizational process assets are important inputs that can influence five of the six risk management processes.

1. PM508 Managing Risk: Project and Business
Risk PMI-style
Char Pogue, MSPM, PMP

2. PM508 Managing Risk: Project and Business
“Risk is an uncertain event or condition that, if it occurs, has an effect
on at least one project objective. Objectives can include scope,
schedule, cost and quality” (PMI, 2008, p. 275).
Project Risk PMI-Style
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK).
4th Ed. Newton Square, PA.: Project Management Institute, Inc.
The following are a few highlights of chapter 11, not a comprehensive
overview of Project Risk Management identified by PMI

3. PMI has identified 6 processes to manage risk:
1. Plan Risk Management
2. Identify Risks
3. Perform Qualitative Risk Analysis
4. Perform Quantitative Risk Analysis
5. Plan Risk Responses
6. Monitor and Control Risks
“The objectives of Project Risk Management are to increase
the probability and impact of positive events, and decrease
the probability and impact of negative events in the
project” (PMI, 2008, p. 273).
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business

4. PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business
One of the outputs of the Plan Risk Management process is to categorize risks.
If a project has allot of risks they could be categorized into a Risk Breakdown
Structure, or RBS (PMI, 2008, p.280).

5. PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business
Should every project have an RBS?
The PMBOK is a GUIDE, which means you would
use the RBS as a tool if it would help you
manage project risks. I personally would use
this tool if a project had many risks or if the
project had allot of subject matter experts
(SMEs). The RBS may mirror the WBS or may be
categorized by SME.

6. PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business
An output of the plan risk management process is how risks will
be prioritized on the project. Below is the example used in the
PMBOK (PMI, 2008, p. 281).

7. PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business
The only output of the PMI process of Identifying Risks is
the Risk Register. After the risks are identified they are
prioritized (through Qualitative Analysis). The high
priority risks may be thoroughly analyzed (Quantitative
Analysis) so informed decisions (Plan Risk Responses) can
be made (PMI, 2008).
I believe the best way to identify risks (and mitigation) is
to ask every single stakeholder for risks on a regular basis.

8. PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business
Monitoring and Controlling risks is the iterative process of
using your risk management process while interacting
with other knowledge areas.
(PMI, 2008, p. 309)

9. PM508 Managing Risk: Project and Business
Enterprise
Environmental Factors
and Organizational
Process Assets are used
as an input or output in
5 of the 6 Project Risk
Management
Processes.
(PMI, 2008, p. 274)
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.

10. Organizational process assets are any or all process related assets from any
or all of the organizations involved in the project that can be used in the
project success.
includes but are not limited to:
•Risk categories
•Common definitions of concepts and terms
•Risk statement formats
•Standard templates
•Roles and responsibilities
•Authority levels for decision-making
•Stakeholder registers
•Project files including actual data
•Organizational and project process controls
•Risk statement templates
•Lessons learned
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business
(PMI, 2008, p. 278)

11. Enterprise Environmental factors are internal or
external factors that surround or influence the
project success.
includes but not limited to:
•Published information, including commercial
databases
•Academic studies
•Published checklists
•Benchmarking
•Industry studies and
•Risk attitudes
(PMBOK, 2008, p. 285)
PM508 Managing Risk: Project and Business
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.

12. PM508 Managing Risk: Project and Business
Project Risk PMI-Style
• Risk can have a positive or negative effect on the project.
• Risk Management should begin when the project is conceived
(PMI, 2008, p. 276).
• Project risk is in the future.
• A project risk that has already occurred can also be considered an
issue (PMI, 2008, p. 275).
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.

13. In the past PMI use the ‘Triple Constraint’ of scope, schedule and cost (with
quality in the middle).
The theory: after a project plan is baselined changes to one objective could
result in changes to other objectives. A example would be changes in the scope
could cause a change to the schedule, cost or quality.
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business
Quality

14. PMI changed in 2008, now there are 6 constraints.
Notice Risk has been added. Could changes in project risk affect project quality?
Could changes in the Schedule affect the project risk?
PMI. (2008). A Guide to the Project Management Body of Knowledge (PMBOK). (4th Ed.). Newton
Square, PA.: Project Management Institute, Inc.
PM508 Managing Risk: Project and Business

15. PM508 Managing Risk: Project and Business
Did you know that in addition to the PMBOK PMI also published a
book, Practice Standard for Project Risk Management, and both are
available for you to read online at City University using Books24X7?
Project Risk PMI-Style
Did you know that in addition to the PMP certification
PMI also offers a Risk Management Professional or PMI-RMP
certificate?

16. PM508 Managing Risk: Project and Business
What happens when risk is not identified, prioritized
and mitigated?
Check out this 1 minute video (GYSTCONSULTING, 2009).
GYSTCONSULTING. (2009, January 23). Risk Assessments…Who Needs ‘em? You Tube retrieved from
http://www.youtube.com/watch?v=uvB-fRHLMoY&feature=related