The Five Step Risk Management Process

1473 Words Oct 25th, 2016 6 Pages
Establishing Facts
Step 2 in the five step risk management process involves analyzing the risk events and impacts identified in Step 1. This step is designed to help identify which risks are significant enough to the monorail project to require active risk management. To ensure action plans implemented in Step 4 are effective, it is essential to gain a better understanding of why a risk event or impact may occur, as well as its effect on the total loss with respect to the project’s total cost. The goal of Step 2 is to develop a list of drivers for each risk event and impact, identify the probability of occurrence for each risk event or impact, estimate the total loss associated with each risk event, and determine the risk likelihood and expected loss for each risk event. In order to employ effective risk mitigation techniques in later steps of the risk management process, Step 2 must consider the facts associated with the risks identified for the project. Facts which lead one to believe that a risk event or impact will occur are called drivers. Drivers identify something existing in the project environment that may influence the likelihood of experiencing a loss (Smith and Merritt, 2002, 63).
A workshop similar to the one held in Step 1 was conducted to develop the drivers and to analyze the risks. With the same participants present and the use of the same products such as the large printed schedule, the team developed risk event and impact drivers. The workshop opened with…
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