Concepts
Identifying risks is a crucial step in the PMI Risk Management Professional (PMI-RMP) examination. Before this stage, however, it’s necessary to review certain preliminary documents that provide insights about potential risk areas. These documents include industry benchmarks, previous lessons learned, and historical data. Understanding these sources of information is integral to determining viable risk responses.
Key Sources of Information
Let’s look at each of these in more detail:
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Industry Benchmarks
Industry benchmarks represent the standard against which business performance is measured. They serve as valuable data points to identify industry trends, opportunities, and threats. For example, if your organization is in the manufacturing sector, industry benchmarks could include average cycle times, defect rates, or safety incidents rates. Project professionals can compare their project-specific metrics against these benchmarks to identify potential risks.
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Previous Lessons Learned
Lessons learned are insights gained from past projects, whether successful or not. Analyzing these can provide a wealth of information about potential risks for current and future projects. By conducting a thorough review of lessons learned, project professionals can identify what worked well and what went wrong in previous projects, helping them anticipate potential risks in new projects. For example, if a previous project ran into constant delays due to scheduling conflicts, current project professionals can identify this as a potential risk and plan accordingly.
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Historical Data
Historical data refers to any data collected from past projects. This could include project schedules, budgets, scope changes, or quality measures. Reviewing historical data can provide a realistic view of what to expect in the current project, helping to identify potential risks. For example, if historical data shows a trend of cost overruns in similar projects, this can be identified as a risk for the current project.
Comparing Sources of Information
| Source of Information | Example | How it Helps Identify Risks |
|---|---|---|
| Industry Benchmarks | Average cycle times in the manufacturing sector | By comparing project-specific metrics to industry benchmarks, potential risks can be revealed |
| Previous Lessons Learned | Delays in a past project due to scheduling conflicts | Provides insights on what went wrong previously, helping to anticipate similar risks for future projects |
| Historical Data | Trend of cost overruns in similar past project | Reveals patterns of issues in past projects that can be anticipated as potential risks in the future |
Conclusion
In conclusion, these preliminary documents play a key role in risk identification and a quality risk management plan. Along with acknowledging their presence and impact, PMI-RMP aspirants should also be aware of the sources of this information. These sources could be internal such as project archives or external like industry reports, academic journals, or market research firms. Emphasizing the review of these preliminary documents prior to risk identification, should be part of every project professional’s best practice approach.
Nevertheless, while these are valuable sources of information, it is essential to remember that they are tools to assist in risk identification, and risk identification will always involve a degree of professional judgement. Therefore, continuous learning, staying updated with industry trends, and combining knowledge with experience, is the key to becoming a successful risk management professional.
Answer the Questions in Comment Section
True or False: Industry benchmarks should be considered preliminary documents in risk identification.
- True
- False
Answer: True.
Explanation: Industry benchmarks are important preliminary documents to be reviewed prior to risk identification as they represent the standards in a specific industry and help in identifying potential risks.
True or False: Previous lessons learned are irrelevant to the risk identification process.
- True
- False
Answer: False.
Explanation: Previous lessons learned provide valuable insights into potential risks in similar future projects, making them significant preliminary documents in risk identification.
Which of the following is not considered as a preliminary document for risk identification?
- A) Historical data
- B) Industry benchmarks
- C) Lesson learned from previous projects
- D) Personal opinions
Answer: D) Personal opinions.
Explanation: Personal opinions are not considered preliminary documents as they lack the objectivity and factual basis typically found in industry benchmarks, historical data, and lessons learned from past projects.
True or False: The sources from which preliminary documents are derived do not have any implications on the risk identification process.
- True
- False
Answer: False.
Explanation: The reliability and credibility of the sources of preliminary documents can greatly influence the quality and accuracy of the risk identification process.
True or False: Historical data is not considered a preliminary document in risk identification.
- True
- False
Answer: False.
Explanation: Historical data from past projects is vital in predicting and identifying potential risks in new projects.
Which of the following is not a type of historical data to be reviewed for risk identification?
- A) Previous project reports
- B) Financial statements
- C) Past project timelines
- D) Vendor satisfaction surveys.
Answer: D) Vendor satisfaction surveys.
Explanation: Vendor satisfaction surveys are not historical data related to risk identification. Meanwhile, project reports, financial statements, and project timelines are considered important in risk identification.
Multiple Select: Which of the following are considered as sources of preliminary documents?
- A) Corporate databases
- B) Personal experiences
- C) Industry publications
- D) Social media posts
Answer: A) Corporate databases, B) Personal experiences, C) Industry publications.
Explanation: Corporate databases, personal experiences, & industry publications are recognized sources of preliminary documents. Social media posts don’t provide substantial or reliable information for risk identification.
True or False: Previous risk management plans can serve as preliminary documents for risk identification in new projects.
- True
- False
Answer: True.
Explanation: These past plans offer insight into effective risk management strategies and the potential challenges a new project may face.
True or False: Both industry benchmarks and historical data are mandatory for risk identification.
- True
- False
Answer: False.
Explanation: Although both are extremely useful, they are not always available or applicable for every project.
Multiple Select: Which of these documents are considered preliminary documents to review prior to risk identification?
- A) Cash Flow Statements
- B) Payroll records
- C) Past project schedules
- D) Previous projects’ risk registers
Answer: C) Past project schedules, D) Previous projects’ risk registers.
Explanation: Past project schedules and previous projects’ risk registers are useful in identifying potential risks. Cash flow and payroll records, though important in financial management, may not have direct relevance in risk identification.
Great post! Industry benchmarks are really helpful for understanding where a project stands in comparison to the norm.
Previous lessons learned can give invaluable insight into what risks may arise based on past projects.
Where can I find reliable historical data for risk identification?
Thanks for the blog post, very informative!
Industry benchmarks can vary greatly depending on the sector. It’s crucial to use benchmarks that are relevant to your specific industry.
Appreciate the insights shared here.
Historical data is often overlooked, but it can predict future project risks accurately if used correctly.
I find that combining industry benchmarks with lessons learned gives a comprehensive outlook on potential risks.