Plan Risk Responses Process

hello and welcome to p.m. Z lounge dot-com a very important topic today as we discussed the plan risk responses process a very important process so I'd like you to watch this video till the end this is going to be very very helpful especially the examples that we have put together to explain the strategies that you would use to handle risks very important so stick around also if you are into reading articles if you would rather read about this process then watch this video then the first link in the description will take you to a relevant article on this topic over at our official website PMC Lounge comm so first link in the description check it out also second link in the description as always very very important the entire playlist of every single video on risk management knowledge area that is also available so with that being said let's get started okay so by now you would have realized one thing and that is that there is a lot of planning involved when it comes to the risk management knowledge area if you have not realized it here is another process for you which is what we are discussing today planned risk responses so this is the pgk a mapping we are talking about the planning process group we are in risk management knowledge area we have already discussed all these processes like I said second link in the description will take you to the playlist of every single video which covers all these processes so let's talk about planned risk responses this is process number five within the planning process group itself and the risk management knowledge area alright so the first sentence here it is basically reminding you about the previous processes that we have covered in risk management knowledge area that is identify risks perform qualitative risk analysis perform quantitative risk analysis so after you have done all that after you have followed all those processes you now would want to figure out what you would do if a risk actually materializes right so you've analyzed all the risk let's say the risk actually happens the risk actually occurs what are you going to do and that's where planned risk responses process come into the picture now here are a few examples is there some planning you can do early on in the project to avoid the risk so right now you're in the planning stage the work on the project has not started and you see some kind of risk is there something that you can plan ahead of time so that the risk doesn't materialize can you keep some reserve funds to address the risk if it were to materialize this is something where we talked about the EMV analysis in one of our previous videos second link in the description list off all the videos check it out if you are still wondering what EMV is so when you calculate EMV can you put some funds in reserve so that if a risk materializes you at least have the cost to cover that risk is there a way to transfer the risk maybe some kind of insurance right so is there a way where you can move the risk from your project to another project or to another team to another vendor by an insurance right we'll talk about transfer as well later on in this video but these are some examples of what you can do if a risk actually materializes let's move on so we just talked about the three ways you can respond to a risk and whichever way you go there are more than three ways of course but the point here is you need to document your risk response in the risk register so this is your risk register you will have a number of risks noted in your risk register for each of these risks you will also document what your response is going to be if that risk materialized another important point to note here is let's say this risk actually materialized and the response that you had planned was if this risk materialized you will add 200 dollars to your project and will be able to mitigate the risk so this is actually a change you are adding 200 dollars to your project now you may have kept this $200 as a reserve but you would require your change Control board's approval to use those 200 dollars in your project if your change Control Board already had an idea that this was one of your planned risk responses if there is clear to materialize your change request will be approved fairly quickly because they were already aware of your risk responses so it pays to make sure that your change Control Board agrees and not just reviews but also agrees to the risk register where you have documented all your planned risk responses at this point in the plan risk responses process it is also important to introduce the topic of strategies for handling rests strategies for handling both negative risks as well as positive risks so let's look at them in the coming slides a quick reminder before we move ahead if you're looking for PMP book recommendations head over to PNC lounge dot-com slash resources this is where we have listed our favorite books and hundreds of our subscribers has cleared the PMP exam with these resources so check it out all right let's get back to the strategies for handling rests and to begin with we will be talking about negative risks first so a void can you avoid the risks right so in other words can you duck away can you prevent the risk from materializing the example here is if there is a risk that the project won't be complete by the target ended can you simply extend the timelines right so let's say you added three weeks to your project ended can you do that if you do that you are basically avoiding the risk of missing the project end date the next strategy is mitigate and this is where you create a plan B so if the risk does materialize what are you going to do so you are going to execute your plan B for example in our previous example itself there was the risk of missing the target end date let's say that risk was due to an extra functionality that is being requested by the customer and to code this extra functionality in you would require more time and as a result you are going to miss your project end date so can you target this functionality for the next project can you start working on it right away but instead of making it a part of this project you move it to the next project you're not avoiding it by the way here right because you are actually working on this extra functionality it's just that you're working on another project and not this one that is how you're meeting getting the risk the next strategy is to transfer the negative risk so think through can someone else on your risk that is what insurance does so if you have life insurance if you have medical insurance by the way if you don't get them because that is how you transfer your risk to a third party so how about you involve a third party vendor to work on the extra functionality if they are able to meet the deadline so let's say you employ someone to create or code that extra functionality so that you are basically transferring the risk from your team to the third party vendor and finally the fourth way to handle negative risks the fourth strategy is to accept that there is a risk this is where you know that there is a risk and you choose to accept it so you just say you cannot do much about it and you are going to accept it you already know that driving fast is dangerous but if you still drive fast don't do that by the way you are actually accepting the risk now note that in certain texts you will find passive acceptance of risk and active acceptance of risk and all that but the bottom line here is when you accept the risk it does not mean that you cannot even have a workaround you can have a workaround when you are accepting the risk as well that does make risk accepting this Pratt adji that does make this closer to risk mitigation because that is where you have a plan B as well but having a workaround pays off when it comes to real life project so don't shy away from having a workaround if you are accepting the risk all right strategies to handle positive risks also known as opportunity so there are four strategies that you can employ to handle positive risks number one is exploit this is where you do everything that you can to make sure that the positive risk materializes the opportunity happens for example if you can save money by procuring from a different city but it might take some more time how about placing the order earlier to stay on time as well as save procurement costs so as simple as that you make the order earlier so that the order arrives in time and you also save money by procuring it from different cities so this is how you're exploiting the opportunity you're making sure that the opportunity happens it materializes the next in the list is share so can you employ a third-party vendor just like you did when you transferred the negative risk can you employ a third-party vendor here who is going to help you increase your chances of materializing the opportunity let's take an example in the procurement example that we discussed in the previous slide can you pass on some of the saved cost to the customer and ask for more time to complete the per comment so let's say you are not able to get that procurement on time right it does save cost but you are not able to get it on time and you would need an extra two weeks so of that saved cost can you pass some of that saved cost to the customer give them a discount or something and ask them for two more weeks so that you can procure from a different City at a cheaper rate so this is how you share opportunities next is enhance now it is important to understand the concept of risk trigger here this is an important concept before we can discuss enhance so risk trigger one line definition is a warning sign that a risk is coming so risk triggers you will see for both positive risks as well as negative risk so positive risk will also have triggers so enhance is where you are trying to influence that triggers influence the opportunity triggers or the risk triggers of the positive risk and you're going to make the opportunity more probable so let's say when you tell your vendor that you have several projects in the pipeline and they can become your preferred vendor what you're doing here is in addition to negotiating you are actually enhancing the possibility of getting a better rate getting a discount right so when you tell them that you have several projects and you are always going to come to them for procurement you have a chance you are enhancing the possibility of getting better rate so this is how you handle opportunities and finally the last strategy to handle positive risks or opportunities is to accept them so just like negative risks a positive risk materializing is like an opportunity knocking the door so you can simply accept it for example your vendor offers you a ten percent loyalty discount right nobody is going to say no to that so you simply accept that opportunity and move on finally for the question of this video these strategies that we talked about for both positive as well as negative risks these are actually the tools and techniques of the planned risk responses process meanwhile inputs and outputs are something that you should already be aware of since we have discussed them as part of risk management knowledge area so can you name a few inputs and outputs of this process remember you were updating the risk register with your risk responses so updates to risk register can that be an output of this process let me know in the comments definitely waiting for your answers so that is all that we had in this video smash that like button if you got value out of it it helps us stay motivated also don't forget to smash that Bell icon as well to stay notified whenever we upload new content also check out our website BMC lounge comm your number one free PMP resource thank you

Channel: PMC Lounge

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Keywords: pmp full course, pmp audio, pmp basics, pmp boot camp, project management tutorial, project management fundamentals, project management professional pmp video training, project management lecture, project management basics, project management body of knowledge, pmp exam, pmbok, pmp certificate, pmi pmp, pmp project management, plan risk response, risk response strategies, positive risk response strategies, negative risk response strategies

Id: 8tZVKO4xfiw

Length: 15min 5sec (905 seconds)

Published: Thu Dec 19 2019