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7.1 Monitor Risks Exam Objectives4. Domain 4: Risk Monitoring and Reporting4.1. Task 1 Document and periodically update project risk information using standard tools (including but not limited to risk register, risk database) and techniques in order to maintain a single, current repository of all project risk information.4.2. Task 2 Coordinate with project manager using communication techniques in order to integrate risk management throughout the project.4.3. Task 3 Create periodic standard and custom reports using risk-related metrics as specified in the risk management plan in order to communicate risk management activities and status.4.4. Task 4 Monitor risk response metrics by analyzing risk response performance information, and present to key stakeholders in order to ensure resolution of risk and develop additional risk response strategies to address residual and secondary risks.4.5. Task 5 Analyze risk process performance against established metrics in order to drive risk process improvements.4.6. Task 6 Update the project risk management plan using relevant internal and external inputs in order to keep the plan current.4.7. Task 7 Capture risk lessons learned through comprehensive review of the project risk management plan, risk register, risk audits, risk process performance reports, and other associated reports in order to incorporate into future risk planning.The Monitor Risks process monitors the implementation of agreed-upon risk response plans, tracks identified risks, identifies and analyzes new risks, and evaluates risk process effectiveness throughout the project. Its key benefit is that it enables project decisions to be based on current information about overall project risk exposure and individual project risks. This process is performed throughout the project.The inputs, tools and techniques, and outputs of the process are shown in Figure 7-1.Figure 7-1: Monitor Risks: Inputs, Tools and Techniques, and OutputsFigure 7-2 depicts the data flow diagram for the process.Figure 7-2: Monitor Risks: Data Flow DiagramProject work should be constantly monitored for new, changing, and outdated individual project risks and for any changes in the overall project risk level by applying the Monitor Risks process to ensure that the project team and key stakeholders are aware of the current level of risk exposure. The Monitor Risks process uses performance information generated during project execution to determine if:
- Implemented risk responses are effective
- Level of overall project risk has changed
- Status of identified individual project risks has changed
- New individual project risks have arisen
- Risk management approach is still appropriate
- Project assumptions are still valid
- Risk management policies and procedures are being followed
- Contingency reserves for cost or schedule require modification
- Project strategy is still valid
Monitor Risks is a busy process. During the course of the project, risk responses, which were developed during the Planning process group and implemented in the Executing process group, are still effective and have reduced or averted the impact of risk events.
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NoteImplement Risk Responses and Monitor Risks go hand in hand, but they each have their distinct function. Implement Risk Responses is performed by the risk owners (who are responsible for monitoring risks to determine if response plans are needed). Risk owners put the response plan into action in this process. Monitor Risks monitors the response plans for effectiveness along with all of the other functions.Inputs of the Monitor Risks Process Here are the inputs of the Monitor Risks process:
- Project management plan: The components of the project management plan include the risk management plan, which provides guidance on how and when risks should be reviewed, which policies and procedures should be followed, the roles and responsibilities in the monitoring process, and reporting formats.
Project documents: For this process, project documents that can be considered as inputs include:
- Issue log: It checks if any of the open issues have been updated and necessitate an update to the risk register.
- Lessons learned register: It can be applied to later phases in the project.
- Risk register: It has key inputs that include identified individual project risks, risk owners, agreed-upon risk responses, and specific implementation actions. It also provides other information including control actions for assessing the effectiveness of response plans, symptoms and warning signs of risk, residual and secondary risks, and a watch list of low-priority risks.
- Risk report: It includes the assessment of the current overall project risk exposure and the agreed-upon risk response strategy. It also describes the major individual risks with planned responses and risk owners.
- Work performance data: It contains the project status information such as risk responses that have been implemented, risks that have occurred, risks that are active and those that have been closed out.
- Work performance reports: They provide information from performance measurements that can be analyzed to provide project work performance information including variance analysis, earned value data, and forecasting data.
Tools and Techniques of the Monitor Risks Process Here are the tools and techniques of the Monitor Risks process:
Data analysis: The data analysis techniques that can be used for this process include:
- Technical performance analysis: It compares technical accomplishments during project execution to the schedule of technical achievement and requires the objective definition, quantifiable measures of technical performance, which can be used for comparing actual results against targets.
- Reserve analysis: It compares the amount of the contingency reserves remaining to the amount of risk remaining at any time in the project for determining if the leftover reserve is adequate.
- Audits: A risk audit is one of the tools used to control risk and is used to consider the effectiveness of the risk management process. The project manager is the key individual who is responsible for making sure that the risk audits are performed at the appropriate frequency, as defined in the project’s risk management plan. This means that it can be included in routine project review meetings or randomly. Risk audits are carried out during the entire life of the project by risk auditors. Risk auditors are not typically project team members and are expertly trained in audit techniques and risk assessment. Risk audits are specifically interested in examining the risk management process.
Meetings: These include risk reviews, which are scheduled regularly and examine and document the risk responses effectiveness while dealing with overall project risk and with identified individual project risks. This review may also result in the following:
- New individual project risks identification
- Current risks reassessment
- Closing of outdated risks
- Issues that have arisen as the result of risks that have occurred
- Identification of lessons to be learned for implementation in ongoing phases in the current project or in similar projects in the future
Outputs of the Monitor Risks Process Here are the outputs of the Monitor Risks process:
- Work performance information: It includes information about the performance of project risk management by comparing the individual risks that have occurred with the expectation of how they would occur. This information signifies the effectiveness of the response planning and response implementation processes.
- Change requests: The Monitor Risks process results in a change request to the cost and schedule baselines or other project management plan components. The change requests are processed for review and disposition through the Perform Integrated Change Control process and include recommended corrective and preventive actions for addressing the current level of overall project risk or individual project risks. You might find that implementing a contingency plan or a workaround may bring about the need for a change request. A workaround is an unplanned response to a negative risk event. It attempts to deal with the risk in a productive, efficient manner. If no risk response plan exists (this might be the case when you accept a risk event during the Planning processes) or an unplanned risk occurs, workarounds are implemented to deal with the consequences of the risk.
- Project management plan updates: Any change to the project management plan goes through the organization’s change control process via a change request. This may affect any project management plan component.
Project documents updates: For this process, project documents that may be updated include:
- Assumption log: During the Monitor Risks process, new assumptions are made, new constraints are identified, and existing assumptions or constraints are revisited and changed. The assumption log is updated with this new information.
- Issue log: It records all the issues identified as the part of the Monitor Risks process.
- Lessons learned register: It is updated with any risk related lessons learned during risk reviews so these can be used on future phases of the project or in upcoming projects.
- Risk register: It is updated with information on individual project risks produced during the Monitor Risks process. It includes tasks like, adding new risks, updating outdated risks or risks that were realized, updating risk responses, and so forth.
- Risk report: As the Monitor Risks process provides the new information, the risk report is used to reflect the current status of the major individual project risks and the current level of overall project risk. It also includes details of the top individual project risks, agreed-upon responses and owners, and conclusions and recommendations. It may also include conclusions from risk audits on the effectiveness of the risk management process.
- Organizational process assets updates: These are updated as a result of the Monitor Risks process and include templates for the risk management plan, risk register and risk report, and risk breakdown structure.