CDT505 Chap.6 Project Risk Analysis and Response
Project Risk Analysis and Response
Write exposure precisely enough to act
A useful risk statement connects a cause, an uncertain event and an effect on a project objective. Risk breakdown structures widen identification before probability and impact analysis prioritises attention.
Threat responses do different work: avoidance removes the condition, transfer reallocates consequence, mitigation reduces probability or impact and acceptance retains exposure with monitoring and possibly a reserve.
Ownership, triggers and residual risk turn a strategy label into a managed response.
Make every register field constrain the next
The description should support the probability and impact judgement, while the judgement should justify the response and reserve. Insurance can transfer a financial consequence without changing event probability or schedule effect, so one risk may need several coordinated actions.
After responses are selected, reassess residual exposure and identify any secondary risk the action creates. Monitoring then watches a trigger and moves an occurred event into issue control. That chain is what makes a register useful beyond the assignment table.
What this chapter covers
- 01
Cause, uncertain event and consequence
- 02
Risk breakdown structures
- 03
Probability-impact matrices
- 04
Quantitative exposure and expected cost
- 05
Avoid, transfer, mitigate and accept
- 06
Owners, triggers, residual risk and reserves
Worked example · free
Rewrite a vague risk register entry
- 3Specify cause, event and consequence.
- 2Justify probability and impact.
- 3Name action, owner, trigger and reserve.
Key terms
- Project Risk
- An uncertain event or condition that can affect one or more project objectives.
- Risk Breakdown Structure
- A hierarchical grouping of risk sources used for systematic identification.
- Risk Owner
- The person accountable for monitoring and managing a particular risk and response.
- Residual Risk
- Exposure that remains after a planned response is implemented.
- Contingency Reserve
- Time or money allocated for identified uncertainty that remains in the plan.
Project Risk Analysis and Response FAQ
When should a risk become an issue?
A risk remains an uncertain event while its trigger and occurrence are still being monitored. Once the event or condition exists, move it into issue control with an immediate owner, action and escalation route. Preserve the original risk record so reviewers can compare the trigger, response effectiveness, residual exposure and any secondary risk created by the action.
What makes a risk description specific enough?
State the cause or condition, the uncertain event, when or where it may occur, who or what is involved and the consequence for a project objective. The current individual brief condenses this into who, when and what.
Does insurance mitigate a project risk?
Insurance transfers specified financial consequences to an insurer under agreed terms. It does not reduce the event's probability and may leave schedule, safety or reputational consequences with the project. Other actions are needed to mitigate those dimensions.
What does the current brief require in each risk row?
It requires three realistic, project-specific risks. Each needs a who-when-what description, justified probability and impact, a named response strategy with a specific action and a concrete contingency reserve stated in money or days.
Assessment move
Create a risk breakdown structure for the same project used in your scope and schedule practice. Search technical, external, organisational, commercial and management sources before ranking anything. Rewrite each candidate as cause, uncertain event and consequence for an objective. Add who is involved and when the exposure can arise.
Delete category labels and certain problems that have already occurred, because those need issue management rather than probability scoring. For the remaining risks, write one sentence justifying probability and another justifying impact with project-specific evidence. Place them on a matrix only after that reasoning exists. Choose avoid, transfer, mitigate or accept and describe a real action.
Underline the part of exposure the action changes. If nothing becomes less likely, less harmful or contractually reallocated, the response label is unsupported. Name an owner with authority, an observable trigger, the residual risk and a concrete reserve in money or days.
Calculate expected monetary value for comparable financial exposures, then explain why the result is an average decision aid rather than the loss this single project will certainly experience. Audit each row against the individual brief: who, when and what; justified probability and impact; named response with mechanism; concrete reserve. Finally, schedule regular reviews.
Retire risks that can no longer occur, identify secondary risks created by responses and escalate when a trigger crosses its threshold. Practise defending one reserve orally by tracing it back to the residual consequence. This turns the register from a submission table into a control instrument.
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