{"id":263,"date":"2021-12-15T23:30:29","date_gmt":"2021-12-16T04:30:29","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/?post_type=chapter&#038;p=263"},"modified":"2021-12-27T18:04:11","modified_gmt":"2021-12-27T23:04:11","slug":"3-10-risk-framework","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/chapter\/3-10-risk-framework\/","title":{"raw":"3.10 Risk Framework","rendered":"3.10 Risk Framework"},"content":{"raw":"A risk framework outlines the organization\u2019s:\r\n<ul>\r\n \t<li>risk management approach<\/li>\r\n \t<li>risk appetite<\/li>\r\n \t<li>risk tolerance<\/li>\r\n \t<li>accountabilities and responsibilities for managing risk.<\/li>\r\n<\/ul>\r\nIn today\u2019s world organizations should constantly reassess and update their framework \u2013 as frequently as weekly, or even daily. Organizations that are proactively managing their risk, controls and compliance activities will potentially be better positioned to respond to change e.g. businesses fast-tracked their digitization process in 2020, to enable effective remote working and ecommerce.\r\n\r\nThe hallmarks of a good risk management framework are: pragmatism, flexibility, informed decision-making and ecosystem connectedness.\r\n<div class=\"textbox textbox--key-takeaways\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\"><strong>Key Takeaways<\/strong><\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n<ul>\r\n \t<li>Uncertainty is about a state of not knowing or unpredictability and there are many degrees of uncertainty:\r\n<ul>\r\n \t<li>Risk \u2013 Associated with not knowing future events.<\/li>\r\n \t<li>Ambiguity \u2013 Associated with not being aware of current or future conditions.<\/li>\r\n \t<li>Complexities- Associated with dynamic systems having unpredictable outcomes.<\/li>\r\n \t<li>Volatility \u2013 Associated with rapid and unpredictable change.<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>Project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, procurement and quality.<\/li>\r\n \t<li>An individual risk are specific events or conditions that might affect project objectives, elements or task.<\/li>\r\n \t<li>Overall project risk represents the effect of uncertainty on the project as a whole.<\/li>\r\n \t<li>Risk attitudes of the stakeholders determine the extent to which an individual risk or overall risk matters.<\/li>\r\n \t<li>Risk management focuses on identifying and assessing the risks to the project and managing those risks to minimize the impact on the project.<\/li>\r\n \t<li>Risk Management Processes has six steps in the process:\r\n<ul>\r\n \t<li>Planning Risk Management Process<\/li>\r\n \t<li>Identifying the Risks<\/li>\r\n \t<li>Perform Qualitative Risk Assessment<\/li>\r\n \t<li>Perform Quantitative Risk Assessment<\/li>\r\n \t<li>Developing Risk Responses<\/li>\r\n \t<li>Monitoring and Control Risks<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>The risk management plan identifies the processes and procedures to be used in managing risk throughout the life of the project.<\/li>\r\n \t<li>A risk breakdown structure (RBS) can follow the work breakdown structure (WBS) to identify risk by activity.<\/li>\r\n \t<li>Contingency planning is the development of alternative plans to respond to the occurrence of a risk event.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>","rendered":"<p>A risk framework outlines the organization\u2019s:<\/p>\n<ul>\n<li>risk management approach<\/li>\n<li>risk appetite<\/li>\n<li>risk tolerance<\/li>\n<li>accountabilities and responsibilities for managing risk.<\/li>\n<\/ul>\n<p>In today\u2019s world organizations should constantly reassess and update their framework \u2013 as frequently as weekly, or even daily. Organizations that are proactively managing their risk, controls and compliance activities will potentially be better positioned to respond to change e.g. businesses fast-tracked their digitization process in 2020, to enable effective remote working and ecommerce.<\/p>\n<p>The hallmarks of a good risk management framework are: pragmatism, flexibility, informed decision-making and ecosystem connectedness.<\/p>\n<div class=\"textbox textbox--key-takeaways\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\"><strong>Key Takeaways<\/strong><\/p>\n<\/header>\n<div class=\"textbox__content\">\n<ul>\n<li>Uncertainty is about a state of not knowing or unpredictability and there are many degrees of uncertainty:\n<ul>\n<li>Risk \u2013 Associated with not knowing future events.<\/li>\n<li>Ambiguity \u2013 Associated with not being aware of current or future conditions.<\/li>\n<li>Complexities- Associated with dynamic systems having unpredictable outcomes.<\/li>\n<li>Volatility \u2013 Associated with rapid and unpredictable change.<\/li>\n<\/ul>\n<\/li>\n<li>Project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, procurement and quality.<\/li>\n<li>An individual risk are specific events or conditions that might affect project objectives, elements or task.<\/li>\n<li>Overall project risk represents the effect of uncertainty on the project as a whole.<\/li>\n<li>Risk attitudes of the stakeholders determine the extent to which an individual risk or overall risk matters.<\/li>\n<li>Risk management focuses on identifying and assessing the risks to the project and managing those risks to minimize the impact on the project.<\/li>\n<li>Risk Management Processes has six steps in the process:\n<ul>\n<li>Planning Risk Management Process<\/li>\n<li>Identifying the Risks<\/li>\n<li>Perform Qualitative Risk Assessment<\/li>\n<li>Perform Quantitative Risk Assessment<\/li>\n<li>Developing Risk Responses<\/li>\n<li>Monitoring and Control Risks<\/li>\n<\/ul>\n<\/li>\n<li>The risk management plan identifies the processes and procedures to be used in managing risk throughout the life of the project.<\/li>\n<li>A risk breakdown structure (RBS) can follow the work breakdown structure (WBS) to identify risk by activity.<\/li>\n<li>Contingency planning is the development of alternative plans to respond to the occurrence of a risk event.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n","protected":false},"author":1434,"menu_order":10,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-263","chapter","type-chapter","status-publish","hentry"],"part":33,"_links":{"self":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/263","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/users\/1434"}],"version-history":[{"count":7,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/263\/revisions"}],"predecessor-version":[{"id":549,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/263\/revisions\/549"}],"part":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/parts\/33"}],"metadata":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapters\/263\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/media?parent=263"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/pressbooks\/v2\/chapter-type?post=263"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/contributor?post=263"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/projectcostsrisksqualityprocurement\/wp-json\/wp\/v2\/license?post=263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}