Concepts
Monitoring and closing out expired risks forms the back-end of the risk management process, a crucial step to ensure the effective management of project risks.
I. Understanding Expired Risks
Expired risks refer to those potential problems or threats that were once viable but have now passed their point of relevance. The project has either evolved past the point they possibly can affect, or the prescribed mitigation strategies have been successful. For instance, the risk of encountering a specific technical glitch while developing a software application might become irrelevant when the team moves to a different development stage.
II. Monitoring Risks
During the risk monitoring process, project managers and risk management professionals utilize several tools and techniques.
- Risk Register: The risk register is a document where all identified risks are recorded alongside their characteristics. This includes the likelihood of occurrence, impact, potential responses, and other useful information. Project managers continuously update the risk register to reflect occurrences in the project’s life cycle.
- Risk Reviews: Regular risk reviews allow teams to evaluate and reassess risk impact, identify new risks, and determine if the previously identified risks are still relevant. This provides an opportunity also to evaluate the effectiveness of the risk response strategy.
- Key Performance Indicators (KPIs): KPIs, like Schedule Variance (SV) or Cost Performance Index (CPI), help monitor risks by indicating deviations from the planned project scope, schedule, and costs. This data can alert the project team to potential risks.
Monitoring risks helps signal when a risk has expired and needs to be closed out.
III. Closing Out Expired Risks
When a risk is confirmed as expired, it should be closed-out. The close-out process involves several steps:
- Documentation: All relevant details about the expired risk should be documented. This information could be useful for future projects or subsequent phases of the current project.
- Risk Register Update: The expired risks are then updated as closed in the risk register. This keeps the risk register relevant and prevents the wasting of resources on obsolete threats.
- Lesson Learned: After closing out a risk, it is crucial to document lessons learned. Were there early warning signs? Could the risk have been identified sooner, or better mitigated? This process can lead to the improved handling of future risks.
- Communication: After closing out a risk, inform all stakeholders. Transparency is crucial in maintaining trust between all parties involved in the project.
It’s important to note that while an expired risk no longer threatens the project, it could still hold valuable lessons for future projects. Cautious documentation and comprehensive lessons-learned processes can help future project management efforts.
To sum up, monitoring and closing out expired risks are crucial steps in the risk management process. By understanding, monitoring, and effectively closing out expired risks, risk management professionals can ensure successful project outcomes and continuous improvement in risk management practices. For PMI-RMP students, understanding this important aspect of risk management is vital to passing the exam and succeeding in real-life project environments.
Answer the Questions in Comment Section
True/False: The term ‘expired risks’ refers to risks that have been fully realized in project management.
a) True
b) False
Correct Answer: b) False
Explanation: ‘Expired risks’ refer to those that were previously identified or planned for but are no longer valid or probable.
Multiple Select: Which of the following is used to monitor and close out expired risks?
a) Risk audits
b) Risk reassessments
c) Updated risk register
d) Perform qualitative risk analysis
Correct Answer: a) Risk audits, b) Risk reassessments, c) Updated risk register
Explanation: All of these options are some of the key techniques used to monitor and close out the expired risks.
True/False: Expired risks should not be removed from the risk register.
a) True
b) False
Correct Answer: b) False
Explanation: Expired risks can be removed from the risk register to reduce clutter and maintain updated information about relevant risks.
Single Select: In risk management, ‘closing out’ a risk means:
a) Treating the risk
b) Ignoring the risk
c) Eliminating the risk
d) Confirming the risk is no longer present
Correct Answer: d) Confirming the risk is no longer present
Explanation: Closing out a risk involves making sure the risk is no longer a threat to the project.
True/False: Closing out expired risks is beneficial because it keeps the project team focused on current and future risks.
a) True
b) False
Correct Answer: a) True
Explanation: Closing out expired risks avoids wasting resources and time on risks that are no longer relevant, allowing the team to focus on current and future risks.
Multiple Select: Whose responsibility is it to monitor and close out expired risks?
a) Project manager
b) Risk manager
c) Project team
d) Client
Correct Answer: a) Project manager, b) Risk manager, c) Project team
Explanation: It is primarily the responsibility of management roles, including the project manager, risk manager, and the team. It’s not typically a responsibility of the client.
Multiple Select: What might the project manager do to close out an expired risk?
a) Conduct risk reassessment
b) Update the risk register
c) Hold a ritual to vanquish the risk
d) Inform the relevant stakeholders
Correct Answer: a) Conduct risk reassessment, b) Update the risk register, d) Inform the relevant stakeholders
Explanation: Rituals are not standard risk management practice, but reassessment, updates to the risk register, and communication are all likely steps in closing out an expired risk.
True/False: An expired risk can never pose a threat to the project again.
a) True
b) False
Correct Answer: b) False
Explanation: An expired risk may become relevant again if the project conditions change. Therefore, archived information of expired risks should be retained for reference.
Single Select: In risk management, the risk register should be reviewed:
a) Before project kick-off
b) After project completion
c) At the end of every project phase
d) All of the above
Correct Answer: d) All of the above
Explanation: The risk register should be reviewed frequently, including before starting the project, after completing it, and at the end of every project phase, to keep track of all existing, new, and expired risks.
True/False: The process of monitoring and closing out expired risks is not a part of the PMI-RMP exam syllabus.
a) True
b) False
Correct Answer: b) False
Explanation: PMI-RMP exam content extends to risk monitoring and control, which includes dealing with expired risks.
Multiple select: What techniques might a risk manager use to identify expired risks?
a) Risk reassessment
b) Trend analysis
c) Risk audits
d) Cost-benefit analysis
Correct Answer: a) Risk reassessment, b) Trend analysis, c) Risk audits
Explanation: Techniques such as risk reassessment, trend analysis, and risk audits can help identify expired risks. Cost-benefit analysis primarily helps in realizing the economic feasibility of risk response strategies.
True/False: Never revisiting the risk register once a risk has expired is considered a best practice in risk management.
a) True
b) False
Correct Answer: b) False
Explanation: Even after a risk has expired, it is a good practice to revisit the risk register and re-evaluate as conditions may change, potentially making the risk relevant again.
Great insights on how to monitor and close out expired risks in project management!
Very useful information, particularly for the PMI-RMP exam preparation.
I appreciate the detailed explanation about the procedures.
I am a bit confused about the risk monitoring process. Can anyone clarify the steps involved?
It’s essential to document the outcomes and lessons learned from expired risks to improve future project performance.
How frequently should risk reviews be conducted to ensure none are overlooked?
Thanks for these insights. Very helpful for someone preparing for PMI-RMP.
What tools do you recommend for effective risk monitoring and closure?