DEFINITIONS DEFINITIONS Risk Management The processes concerned with identifying, analyzing, and responding to project risk. Risk Management Plans The collection of risk responses for identified project risks. This is a WWPMM work product. Risk Occurrences Transformation of a risk from a potential to an actual event. Risk Responses An approach to dealing with an identified risk. WWPMM defines five types of response. Acceptance, risk transfer, use insurance, use risk reserve, and two forms of risk containment: risk contingency planning and risk mitigation. Acceptance is accepting the consequences if a risk occurs without further action, but continuing to observe for increased likelihood of occurrence. Risk transfer is transferring some or all of the responsibility for dealing with a risk to the sponsor or a supplier. Using insurance is possible where the identified risk is covered by an insurance arrangement, and refers to using this insurance to cover the cost of the risk occurrence. Using risk reserves means deciding to use monies set aside as risk management reserve or risk contingency reserve. Of the two types of risk containment defined in WWPMM, risk contingency planning is the development of a risk contingency plan for a particular or for multiple risks, and risk mitigation refers to taking steps to affect situational factors in order to lessen risk by lowering the probability of a risk occurrence or reducing its effect should it occur. |