Risk Management

Question 1

What is a risk?

Answer 1

An event or circumstance that would have a negative impact on the project’s objectives

Understanding risks is crucial for effective project management.

Question 2

How would a risk workshop work?

Answer 2

All members of the team come together and brainstorm as many risks that they can think of. The project manager would then collate and add them to the register

This collaborative approach helps in identifying a wide range of potential risks.

Question 3

What is a risk register?

Answer 3

Document used to track potential project risks

It serves as a central repository for all identified risks and their management.

Question 4

Outline the information you would expect to see on a risk register.

Answer 4

• Risk Reference
• Date the risk was raised
• Description of the risk
• Probability of it
• Impact of it
• Severity rating (based on probability & impact)
• Owner of the risk (who will manage it)
• Actions to mitigate the risk
• Cost impact, if any
• Risk status (resolved or ongoing)

This information helps in assessing and managing risks effectively.

Question 5

What is the difference between a qualitative and quantitative risk assessment?

Answer 5

• Qualitative: based on speculative data or someone’s perception
• Quantitative: based on verified and specific data

Understanding the difference helps in choosing the right assessment method for risks.

Question 6

Other than probability and impact, are you aware of any other methods of analysing risk?

Answer 6

Monte Carlo simulation

This method uses computer software to perform multiple tests on the likelihood of a risk occurring using its data.

Question 7

How would you cost the risks on a risk register?

Answer 7

Only cost the red risks - those that have strong possibility of happening and high impact if they do. Would not include the full cost in the risk register, only the Expected Monetary Value

For example, if a risk would cost £10k but it only had a 5/10 chance of happening, you would include a cost of £5k on the register.

Question 8

How do you calculate a project contingency?

Answer 8

Use the total Expected Monetary Value cost of your risk register. Early estimates might be a percentage but as the risk register and design is developed, it should be a properly considered assessment

This ensures that contingencies are based on actual risk assessments.

Question 9

What is the process of Risk Management?

Answer 9

Identify. Analyse. Respond. Manage.

This structured approach helps in effectively managing risks throughout the project lifecycle.

Question 10

What are the risk management strategies?

Answer 10

• Share
• Accept
• Distribute
• Eliminate
• Monitor

These strategies provide various approaches to handle identified risks.

Question 11

How does NRM deal with risks?

Answer 11

Categorises into 4 groups:
* Design Development
* Construction
* Employer Change
* Employer Other

This categorization helps in addressing risks specific to different project phases.

Question 12

What sort of risks are covered by insurance?

Answer 12

• Design Risk (PI)
• Construction Risk (Contract All Risk)
• Social Risk (Public Liability)

Insurance helps mitigate financial losses associated with these risks.