Part II
Risk Management Process

I always tried to turn every disaster into an opportunity.

—John D. Rockefeller

Part II provides the steps to predictable risk management results. As shown in Figure II.1, there are two logical components of the risk management process: risk assessment, described in Chapters 4 and 5, and risk control, described in Chapters 6 through 8. In each chapter I define a process element in terms of what the activities are and how the mechanisms (methods, techniques, and tools) are used to transform inputs to outputs.

Chapter 4, “Identify Risk,” defines the process element Identify Risk. Read Chapter 4 to learn how to discover risk and communicate identified risk effectively.

Chapter 5, “Analyze Risk,” defines the process element Analyze Risk. Read Chapter 5 to understand how to estimate the risk exposure and evaluate interrelated risks.

Chapter 6, “Plan Risk,” defines the process element Plan Risk. Read Chapter 6 to learn how to develop alternative strategies for risk resolution and establish thresholds that help determine when to execute the risk action plan.

Chapter 7, “Track Risk,” defines the process element Track Risk. Read Chapter 7 to understand how to compare risk status with planned thresholds in order to determine when to trigger risk action plan execution.

Chapter 8, “Resolve Risk,” defines the process element Resolve Risk. Read Chapter 8 to learn how to resolve risk to an acceptable level, such that the project can live with the worst-case outcome.

With the knowledge of the risk management process provided in Part II, you will be ready to define a standard process and develop supporting methods for reuse within your organization.

Figure II.I Risk management process. The risk management process comprises five process elements. Identify Risk and Analyze Risk contain the activities required to assess risk. Plan Risk, Track Risk, and Resolve Risk contain the practices necessary to control risk.