APM PMQ MODEL ANSWERS

Part a (Compleat PM sample answer)

 

Identification

This stage is important as it seeks to comprehensively identify and log risk events relevant to a project. Risk identification should start early and be ongoing over the life cycle. Several techniques can be used such as brainstorming, checklists and PESTLE/SWOT analysis. Using different techniques & engaging a wide range of stakeholders the project manager (PM) will try to identify as many risks as early as possible within the project life. Once identified, risks should be documented in the project risk register (RR). At this stage the RR might only include the description and name of person that will own the risk. The benefit of this stage is that it engages with key stakeholders to get different viewpoints and it creates a long list of risks and a relevant liaison for the PM to engage with in future steps.

 

Analysis

This is important as it assesses of the relative impact of the identified risks. It is undertaken by the PM, supported by the project team, risk owners and/or subject matter experts. Qualitative analysis considers the significance and impact on objectives. This could be in form of a simple calculation of the probability or likelihood of the risk event occurring multiplied by the impact of the risk event on schedule, cost. Risks are usually analysed and plotted in a probability/impact grid; the grid typically plots five degrees of impact and probability ranging from very low to very high often categorised using red, amber and green coloured areas of the grid. Good practice would be to agree the risk thresholds as part of the risk management plan for the project at the outset and the approaches for each of the grid areas.

 

 

Part b (Compleat PM sample answer)

 

Increased stakeholder confidence

By actively and visibly managing risks for a project as soon as practicable, the PM is giving more credibility to the plans thereby increasing the confidence of stakeholders by demonstrating that they are doing everything they can to deliver the project. Identifying, assessing and responding to the risks identified in the most appropriate way will minimise threats and maximise opportunities. Stakeholder confidence will be increased as they will be informed of the risk factors, tolerances and required contingencies in relation to budget and time and can therefore proactively support the project manager to manage these.

 

Increased chance of project success

A robust risk management approach minimises the chance of failure and increase the likelihood of a project adhering to its schedules and budgets. By identifying risks, the PM and team can work together to understand response actions to overcome these uncertainties and include these in the planning. The outcome is that more realistic plans are established, and the team can foresee a higher probability of achieving a successful project outcome. The team’s confidence, commitment and morale will increase as a consequence. Actions could be to more resources to a task to ensure it is completed in time or extend the date of a milestone. By taking these actions, the PM is striving for the best possible outcome and increased chance of success for the project by setting out realistic and achievable targets.

 

Realistic assessment and justification of contingencies

By following a robust risk management process that identifies and quantifies the amount of contingency required, the project manager is following a best practice approach that will help support the project in achieving its objectives as the level of contingency will be specific to the risks, the project objectives and agreed tolerance thresholds. A meaningful assessment of risk will ensure greater accuracy in the allocated contingency, whether cost or time related. The actions to respond to the uncertainties identified will either stop the threat from happening or reduce the threat to a manageable level, so increasing the likelihood of project success by protecting the project budget and programme.