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    The Standard for Risk Management in Portfolios, Programs, and Projects
    The Standard for Risk Management in Portfolios, Programs, and Projects
    The Standard for Risk Management in Portfolios, Programs, and Projects
    Ebook341 pages2 hours

    The Standard for Risk Management in Portfolios, Programs, and Projects

    By Project Management Institute

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    About this ebook

    This is an update and expansion upon PMI's popular reference, The Practice Standard for Project Risk Management. Risk Management addresses the fact that certain events or conditions may occur with impacts on project, program, and portfolio objectives. This standard will: identify the core principles for risk management; describe the fundamentals of risk management and the environment within which it is carried out; define the risk management life cycle; and apply risk management principles to the portfolio, program, and project domains within the context of an enterprise risk management approach It is primarily written for portfolio, program, and project managers, but is a useful tool for leaders and business consumers of risk management, and other stakeholders.
    LanguageEnglish
    PublisherProject Management Institute
    Release dateApr 22, 2019
    ISBN9781628255669
    The Standard for Risk Management in Portfolios, Programs, and Projects

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      The Standard for Risk Management in Portfolios, Programs, and Projects - Project Management Institute

      THE STANDARD FOR RISK MANAGEMENT IN PORTFOLIOS, PROGRAMS, AND PROJECTS

      Library of Congress Cataloging-in-Publication Data

      Names: Project Management Institute.

      Title: The standard for risk management in portfolios, programs, and projects.

      Description: Newtown Square : Project Management Institute, 2019. | Includes bibliographical references and index.

      Identifiers: LCCN 2019009876| ISBN 9781628255652 (paperback) | ISBN 9781628255669 (ePub) | ISBN 9781628255676 (kindle) | ISBN 9781628255683 (web pdf)

      Subjects: LCSH: Project management. | Risk management--Standards. | BISAC: BUSINESS & ECONOMICS / Project Management.

      Classification: LCC HD69.P75 S7374 2019 | DDC 658.4/04--dc23

      LC record available at https://lccn.loc.gov/2019009876

      ISBN: 978-1-62825-565-2

      Published by:

      Project Management Institute, Inc.

      14 Campus Boulevard

      Newtown Square, Pennsylvania 19073-3299 USA

      Phone: +610-356-4600

      Fax: +610-356-4647

      Email: customercare@pmi.org

      Internet: www.PMI.org

      ©2019 Project Management Institute, Inc. All rights reserved.

      Our copyright content is protected by U.S. intellectual property law that is recognized by most countries. To republish or reproduce our content, you must obtain our permission. Please go to http://www.pmi.org/permissions

      for details.

      To place a Trade Order or for pricing information, please contact Independent Publishers Group:

      Independent Publishers Group

      Order Department

      814 North Franklin Street

      Chicago, IL 60610 USA

      Phone: +1 800-888-4741

      Fax: +1 312-337-5985

      Email: orders@ipgbook.com (For orders only)

      For all other inquiries, please contact the PMI Book Service Center.

      PMI Book Service Center

      P.O. Box 932683, Atlanta, GA 31193-2683 USA

      Phone: 1-866-276-4764 (within the U.S. or Canada) or +1-770-280-4129 (globally)

      Fax: +1-770-280-4113

      Email: info@bookorders.pmi.org

      Printed in the United States of America. No part of this work may be reproduced or transmitted in any form or by any means, electronic, manual, photocopying, recording, or by any information storage and retrieval system, without prior written permission of the publisher.

      The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48—1984).

      PMI, the PMI logo, PMBOK, OPM3, PMP, CAPM, PgMP, PfMP, PMI-RMP, PMI-SP, PMI-ACP, PMI-PBA, PROJECT MANAGEMENT JOURNAL, PM NETWORK, PMI TODAY, PULSE OF THE PROFESSION and the slogan MAKING PROJECT MANAGEMENT INDISPENSABLE FOR BUSINESS RESULTS. are all marks of Project Management Institute, Inc. For a comprehensive list of PMI trademarks, contact the PMI Legal Department. All other trademarks, service marks, trade names, trade dress, product names and logos appearing herein are the property of their respective owners. Any rights not expressly granted herein are reserved.

      10  9  8  7  6  5  4  3  2  1

      NOTICE

      The Project Management Institute, Inc. (PMI) standards and guideline publications, of which the document contained herein is one, are developed through a voluntary consensus standards development process. This process brings together volunteers and/or seeks out the views of persons who have an interest in the topic covered by this publication. While PMI administers the process and establishes rules to promote fairness in the development of consensus, it does not write the document and it does not independently test, evaluate, or verify the accuracy or completeness of any information or the soundness of any judgments contained in its standards and guideline publications.

      PMI disclaims liability for any personal injury, property or other damages of any nature whatsoever, whether special, indirect, consequential or compensatory, directly or indirectly resulting from the publication, use of application, or reliance on this document. PMI disclaims and makes no guaranty or warranty, expressed or implied, as to the accuracy or completeness of any information published herein, and disclaims and makes no warranty that the information in this document will fulfill any of your particular purposes or needs. PMI does not undertake to guarantee the performance of any individual manufacturer or seller's products or services by virtue of this standard or guide.

      In publishing and making this document available, PMI is not undertaking to render professional or other services for or on behalf of any person or entity, nor is PMI undertaking to perform any duty owed by any person or entity to someone else. Anyone using this document should rely on his or her own independent judgment or, as appropriate, seek the advice of a competent professional in determining the exercise of reasonable care in any given circumstances. Information and other standards on the topic covered by this publication may be available from other sources, which the user may wish to consult for additional views or information not covered by this publication.

      PMI has no power, nor does it undertake to police or enforce compliance with the contents of this document. PMI does not certify, test, or inspect products, designs, or installations for safety or health purposes. Any certification or other statement of compliance with any health or safety-related information in this document shall not be attributable to PMI and is solely the responsibility of the certifier or maker of the statement.

      TABLE OF CONTENTS

      1. INTRODUCTION

      1.1 Purpose of This Standard

      1.2 Approach of This Standard

      1.3 Principles of Risk Management

      1.3.1 Strive to Achieve Excellence in the Practice of Risk Management

      1.3.2 Align Risk Management with Organizational Strategy and Governance Practices

      1.3.3 Focus on the Most Impactful Risks

      1.3.4 Balance Realization of Value Against Overall Risks

      1.3.5 Foster a Culture That Embraces Risk Management

      1.3.6 Navigate Complexity Using Risk Management to Enable Successful Outcomes

      1.3.7 Continuously Improve Risk Management Competencies

      1.4 Structure of This Standard

      2. CONTEXT AND KEY CONCEPTS OF RISK MANAGEMENT

      2.1 Key Concepts and Definitions

      2.1.1 Risk

      2.1.2 Opportunities

      2.1.3 Threats

      2.1.4 Risk Attitude

      2.1.5 Risk Appetite

      2.1.6 Risk Threshold

      2.2 Risk Management in Organizations

      2.3 Domains of Risk Management

      2.3.1 Enterprise

      2.3.2 Portfolio

      2.3.3 Program

      2.3.4 Project

      2.4 Key Success Factors

      3. FRAMEWORK FOR RISK MANAGEMENT IN PORTFOLIO, PROGRAM, AND PROJECT MANAGEMENT

      3.1 Business Context of Risk Management in Portfolio, Program, and Project Management

      3.1.1 Organizational Framework

      3.1.2 Organizational Context

      3.1.3 Strategic and Organizational Planning

      3.1.4 Linking Planning with Execution through Portfolio, Program, and Project Management

      3.2 Scope of Accountability, Responsibility, and Authority

      3.2.1 Accountability at the Enterprise Level

      3.2.2 Accountability at the Portfolio Level

      3.2.3 Accountability at the Program Level

      3.2.4 Accountability at the Project Level

      3.3 General Approaches to Risk Management

      3.3.1 Factors for Evaluating Risk

      4. RISK MANAGEMENT LIFE CYCLE IN PORTFOLIO, PROGRAM, AND PROJECT MANAGEMENT

      4.1 Introduction to the Risk Management Life Cycle

      4.2 Plan Risk Management

      4.2.1 Purpose of Plan Risk Management

      4.2.1.1 Risk Appetite in Plan Risk Management

      4.2.1.2 Tailoring and Scaling the Risk Management Plan

      4.2.2 Success Factors for Plan Risk Management

      4.3 Identify Risks

      4.3.1 Purpose of Identify Risks

      4.3.2 Key Success Factors for Identify Risks

      4.4 Perform Qualitative Risk Analysis

      4.4.1 Purpose of Perform Qualitative Risk Analysis

      4.4.2 Key Success Factors for Perform Qualitative Risk Analysis

      4.5 Perform Quantitative Risk Analysis

      4.5.1 Purpose of Quantitative Risk Analysis

      4.5.2 Key Success Factors for Perform Quantitative Risk Analysis

      4.6 Plan Risk Responses

      4.6.1 Purpose of Plan Risk Responses

      4.6.2 Key Success Factors for Plan Risk Responses

      4.7 Implement Risk Responses

      4.7.1 Purpose of Implement Risk Responses

      4.7.2 Key Success Factors for Implement Risk Responses

      4.8 Monitor Risks

      4.8.1 Purpose of Monitor Risks

      4.8.2 Key Success Factors for Monitor Risks

      5. RISK MANAGEMENT IN THE CONTEXT OF PORTFOLIO MANAGEMENT

      5.1 Portfolio Risk Management Life Cycle

      5.1.1 Portfolio Risk Identification

      5.1.2 Portfolio Risk Qualitative and Quantitative Analyses

      5.1.3 Portfolio Risk Response Strategies

      5.1.4 Implementing Portfolio Risk Responses

      5.1.5 Monitoring Portfolio Risks

      5.2 Integration of Risk Management into the Portfolio Management Performance Domains

      5.2.1 Portfolio Strategic Management

      5.2.2 Portfolio Governance

      5.2.3 Portfolio Capacity and Capability Management

      5.2.4 Portfolio Stakeholder Engagement

      5.2.5 Portfolio Value Management

      5.2.6 Portfolio Risk Management

      6. RISK MANAGEMENT IN THE CONTEXT OF PROGRAM MANAGEMENT

      6.1 Program Risk Management Life Cycle

      6.1.1 Program Risk Identification

      6.1.2 Program Risk Qualitative and Quantitative Analyses

      6.1.3 Program Risk Response Strategies

      6.1.4 Implementing Program Risk Responses

      6.1.5 Monitoring Program Risks

      6.2 Integration of Risk Management into the Program Management Performance Domains

      6.2.1 Program Strategy Alignment

      6.2.2 Program Benefits Management

      6.2.3 Program Stakeholder Engagement

      6.2.4 Program Governance

      6.2.5 Program Life Cycle Management

      6.2.6 Supporting Program Activities

      7. RISK MANAGEMENT IN THE CONTEXT OF PROJECT MANAGEMENT

      7.1 Project Risk Management Life Cycle

      7.1.1 Project Risk Identification

      7.1.2 Qualitative and Quantitative Project Risk Analyses

      7.1.3 Project Risk Response Strategies

      7.1.4 Implementing Project Risk Responses

      7.1.5 Monitoring Project Risk

      7.2 Integration of Risk Management into Project Management Process Groups

      7.2.1 Initiating Processes

      7.2.2 Planning Processes

      7.2.3 Executing Processes

      7.2.4 Monitoring and Controlling Processes

      7.2.5 Closing Processes

      APPENDIX X1

      DEVELOPMENT OF THE STANDARD FOR RISK MANAGEMENT IN PORTFOLIOS, PROGRAMS, AND PROJECTS

      APPENDIX X2

      CONTRIBUTORS AND REVIEWERS OF THE STANDARD FOR RISK MANAGEMENT IN PORTFOLIOS, PROGRAMS, AND PROJECTS

      X2.1 The Standard for Risk Management in Portfolios, Programs, and Projects Core Committee

      X2.2 Significant Contributors

      X2.3 Reviewers

      X2.3.1 SME Review

      X2.3.2 Consensus Body Review

      X2.3.3 Public Exposure Draft Review

      X2.4 PMI Standards Program Member Advisory Group

      X2.5 Harmonization Team

      X2.5.1 Core Team

      X2.5.2 PMI Staff

      X2.6 Production Staff

      APPENDIX X3

      PORTFOLIO RISK MANAGEMENT CONTROLS

      X3.1 The Purpose of Portfolio Risk Management Controls

      X3.2 Risk Management Controls for Portfolio Strategic Management

      X3.3 Risk Management Controls for Portfolio Governance

      X3.4 Risk Management Controls for Portfolio Capacity and Capability Management

      X3.5 Risk Management Controls for Portfolio Stakeholder Engagement

      X3.6 Risk Management Controls for Portfolio Value Management

      X3.7 Risk Management Controls for Portfolio Risk Management

      APPENDIX X4

      PROGRAM RISK MANAGEMENT CONTROLS

      X4.1 The Purpose of Program Risk Management Controls

      X4.2 Risk Management Controls for Program Strategy Alignment

      X4.3 Risk Management Controls for Program Benefits Management

      X4.4 Risk Management Controls for Program Stakeholder Engagement

      X4.5 Risk Management Controls for Program Governance

      X4.6 Risk Management Controls for Program Life Cycle Management

      X4.7 Risk Management Controls for Supporting Program Activities

      APPENDIX X5

      PROJECT RISK MANAGEMENT CONTROLS

      X5.1 The Purpose of Project Risk Management Controls

      X5.2 Risk Management Controls for Project Integration Management

      X5.3 Risk Management Controls for Project Scope Management

      X5.4 Risk Management Controls for Project Schedule Management

      X5.5 Risk Management Controls for Project Cost Management

      X5.6 Risk Management Controls for Project Quality Management

      X5.7 Risk Management Controls for Project Resource Management

      X5.8 Risk Management Controls for Project Communications Management

      X5.9 Risk Management Controls for Project Risk Management

      X5.10 Risk Management Controls for Project Procurement Management

      X5.11 Risk Management Controls for Project Stakeholder Management

      APPENDIX X6

      TECHNIQUES FOR THE RISK MANAGEMENT FRAMEWORK

      X6.1 Risk Management Planning

      X6.2 Identify Risks

      X6.2.1 Assumptions and Constraints Analysis

      X6.2.2 Brainstorming

      X6.2.3 Cause and Effect (Ishikawa) Diagrams

      X6.2.4 Checklists

      X6.2.5 Delphi Technique

      X6.2.6 Document Review

      X6.2.7 Expert Judgment

      X6.2.8 Facilitation

      X6.2.9 Historical Information

      X6.2.10 Interviews

      X6.2.11 Prompt Lists

      X6.2.12 Questionnaire

      X6.2.13 Root-Cause Analysis

      X6.2.14 SWOT Analysis

      X6.3 Qualitative Risk Analysis

      X6.3.1 Affinity Diagrams

      X6.3.2 Analytic Hierarchy Process

      X6.3.3 Influence Diagrams

      X6.3.4 Nominal Group Technique

      X6.3.5 Probability and Impact Matrix

      X6.3.6 Risk Data Quality Analysis

      X6.3.7 Assessment of Other Risk Parameters

      X6.3.8 System Dynamics

      X6.4 Quantitative Risk Analysis

      X6.4.1 Contingency Reserve Estimation

      X6.4.2 Decision Tree Analysis

      X6.4.3 Estimating Techniques Applied to Probability and Impact

      X6.4.4 Expected Monetary Value

      X6.4.5 FMEA/Fault Tree Analysis

      X6.4.6 Monte Carlo Simulation

      X6.4.7 PERT (Program or Project Evaluation and Review Technique)

      X6.5 Plan Risk Responses

      X6.5.1 Contingency Planning

      X6.5.2 Force Field Analysis

      X6.5.3 Multicriteria Selection Technique

      X6.5.4 Scenario Analysis

      X6.5.5 Simulation

      X6.6 Response Plan Implementation

      X6.7 Monitor Risks

      X6.7.1 Data Analytics

      X6.7.2 Reserve Analysis

      X6.7.3 Residual Impact Analysis

      X6.7.4 Risk Audit

      X6.7.5 Risk Breakdown Structure

      X6.7.6 Risk Reassessment

      X6.7.7 Sensitivity Analysis

      X6.7.8 Status Meetings

      X6.7.9 Trend Analysis

      X6.7.10 Variance Analysis

      X6.8 Risk Management Techniques Recap

      APPENDIX X7

      ENTERPRISE RISK MANAGEMENT CONSIDERATIONS FOR PORTFOLIO, PROGRAM, AND PROJECT RISK MANAGEMENT

      APPENDIX X8

      RISK CLASSIFICATION

      REFERENCES

      GLOSSARY

      LIST OF TABLES AND FIGURES

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