Concepts
During the planning and execution of any project, the project manager and their team must account for a wide array of possible risks. These risks can come in many forms, and two categories that require careful attention are residual and secondary risks. Understanding and effectively managing these risks is an essential component of the PMI Risk Management Professional (PMI-RMP) exam, as well as effective project management in the real world. This post will explore the impact of these risk types on project objectives and offer examples to clarify the concepts.
Understanding Residual and Secondary Risks
Before discussing the potential impact of residual and secondary risks, it’s crucial to define them. These risk types are often less apparent than primary risks, yet they can have significant implications on a project.
Residual Risks
Residual risks represent those still present after all risk identification, evaluation, and response processes have been carried out. They are the leftover risks that the project must endure or actions that are taken regardless. For instance, a project might decide to accept certain minimal risks in the process of reducing other more significant ones.
Example: In a software development project, an active decision to prioritize launching a new application by a specific deadline could involve knowingly leaving minor bugs unresolved. The minor bugs are the residual risks that the team accepts to manage the risk of not meeting the deadline.
Secondary Risks
Secondary risks arise as a direct result of implementing a risk response. These are the unintended repercussions that occur in response to dealing with the primary risk.
Example: A project decided to outsource a critical component production to manage the risk of possible delays in internal production. But, this action might introduce secondary risks like the uncertainty in quality control and reliance on supplier stability.
Impact of Residual and Secondary Risks
Residual and secondary risks can have significant impacts on project objectives, affecting scope, cost, quality, and timelines. Even though they are often seen as less immediate or less obvious than primary risks, their potential impact can be substantial.
Impact of Residual Risks
The impact can be varied – an increased cost from having to accommodate these risks, or a decrease in the quality if residual risks affect the project’s final deliverable quality.
| Project Objective | Impact | |
|---|---|---|
| Scope | The project might have to minimize some features or aspects to manage residual risks. Potential devaluation of the final deliverable. |
|
| Time | Residual risks could cause project delays if they materialize. Might cause missed deadlines. |
|
| Cost | Having to manage residual risks if they materialize could lead to additional unexpected costs. Could cause budget overruns. |
|
| Quality | The project could have incomplete features or lower performance than planned due to accepted risks. Could lead to lower customer satisfaction. |
Impact of Secondary Risks
The decision made to mitigate a primary risk could lead to unexpected issues elsewhere in the project. Secondary risks can affect project objectives in varied ways, similar to residual risks.
| Project Objective | Impact | |
|---|---|---|
| Scope | Unexpected changes or issues could necessitate a scope change. Could lead to scope creep. |
|
| Time | Unplanned activities to address secondary risks could disrupt the schedule. Could lead to missed deadlines. |
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| Cost | Unanticipated costs may be incurred from mitigating secondary risks. Could cause budget overruns. |
|
| Quality | Mitigation of secondary risks might negatively affect the quality of deliverables. Could lead to lower customer satisfaction. |
Planning for Residual and Secondary Risks
One of the key aspects of the PMI-RMP exam and effective project risk management in general is planning for these potential risks. An effective approach is ensuring that residual risks are continually monitored throughout the project lifecycle and building in contingencies for secondary risks that might materialize.
In conclusion, understanding and dealing with residual and secondary risks are crucial aspects of the PMI-RMP exam and effective project management as a whole. These risks, while often secondary considerations compared to primary risks, could have a significant impact on project objectives if not correctly managed.
Answer the Questions in Comment Section
True or False: Residual risks are those that remain after risk response planning has occurred.
- True
- False
Answer: True
Explanation: Residual risks are indeed the risks that remain after risk response measures have been taken. They are the remaining exposure after all risk management efforts.
Which one of the following defines secondary risks in project management?
- a) Risks remaining after risk response
- b) Any new risk that arises as a result of implementing a risk response
- c) Risks that are identified but not mitigated
- d) Risks arising due to internal factors
Answer: b) Any new risk that arises as a result of implementing a risk response
Explanation: Secondary risks are not the leftover risks but are new risks that occur as a direct result of implementing a risk response.
True or False: Secondary risks may have no impact on project objectives.
- True
- False
Answer: False
Explanation: Secondary risks, like any other risks in projects, can indeed impact project objectives. They might bring about changes in the schedule, cost, scope, or quality of the project.
True or False: Residual risks are generally of lower priority than primary risks.
- True
- False
Answer: True
Explanation: Residual risks are typically lower in priority because they are the risks that remain following risk response and mitigation efforts. However, they still need to be monitored.
In which stage of project management are secondary risks usually identified?
- a) During the initiation stage
- b) While defining the project scope
- c) During risk management efforts
- d) During project closure
Answer: c) During risk management efforts
Explanation: Secondary risks often arise as a result of the actions taken to mitigate other risks, hence they are usually identified during the implementation of risk responses.
Which of these statements is NOT true about residual risks?
- a) They are the leftover risks after all risk mitigation efforts
- b) They are typically low-priority risks
- c) They can be completely ignored in the project management process
- d) They can impact project objectives
Answer: c) They can be completely ignored in the project management process
Explanation: Despite being the leftover risks, residual risks should never be completely ignored as they can still impact project objectives.
True or False: Planned risk responses can further intensify the impact of residual risks.
- True
- False
Answer: True
Explanation: While planned risk responses are meant to eliminate or reduce risks, they might inadvertently increase the impact of residual risks if not appropriately managed.
True or False: Secondary risks can develop even after careful and comprehensive risk response planning.
- True
- False
Answer: True
Explanation: Even with careful and comprehensive risk management, secondary risks can arise as they are often a direct result of implementing a risk response.
Which impacts can residual and secondary risks have on project objectives?
- a) Schedule delays
- b) Increased costs
- c) Change in project scope
- d) All of the above
Answer: d) All of the above
Explanation: Residual and secondary risks can have a variety of impacts on project objectives, including schedule delays, increased costs, or changes in project scope.
True or False: Identifying and assessing residual and secondary risks is not important because they are not primary risks
- True
- False
Answer: False
Explanation: Regardless of their classification, all risks including residual and secondary can have impacts on project objectives. Therefore, their identification and assessment is important.
Great post! I’ve been wondering about the impact of residual risks on project timeline.
Appreciate the insights shared here. Thanks!
How do you guys handle secondary risks that might arise from mitigation strategies?
In my experience, developing a robust response plan involving regular monitoring and adjustment can help manage secondary risks effectively.
For a PMI-RMP exam, understanding secondary risks is crucial. They often affect project objectives more than residual risks do.
Agreed. Secondary risks can sometimes be overlooked during planning but have significant impacts if not properly managed.
I appreciate the detailed discussion on residual risks, which often are underestimated.
Could someone explain the difference between residual and secondary risks again? The concept is still a bit fuzzy to me.
Residual risks are the leftover risks after mitigation strategies are implemented, whereas secondary risks are new risks that arise directly due to the mitigation strategies themselves.
Thanks for the information!
A very informative post. Thank you!