Risk Management Terms

Residual Risks

• Risks that remain after risk response planning
• Risks that we simply accept (we’ll deal with it if it happens)

Secondary Risks

• Risks that arise as a direct result of implementing a risk response

Contingency Plans

• Plans to deal with residual risks

Fallback Plans

• Plan B (if Contingency Plan doesn’t work)

Risk Owner

• An individual responsible for identifying and implementing risk responses

Known-Unknowns (or Knowns)

• Identified in risk management

Unknown-Unknowns (or Unknowns)

• Not identified in risk management

Contingency Reserves

• Are established for residual risks that are actively accepted
• Can be established for time and/or cost
• Cover for Known-Unknowns

Management Reserves

• Cover for Unknown-Unknowns
• Refer to Cost Budget and Reserves for more details

Risk Triggers

• Indications that a risk has occurred or about to occur
• Early warning signs of risks
• Are conditions for invoking contingency plans

Risk Tolerance

• The degree or amount of risk that an organization or individual can tolerate or withstand

Risk Threshold

• The point beyond which an event or risk becomes unacceptable and a response should be triggered

Watchlist

• List of non-critical/non-top risks
• Monitored regularly

Workaround

• An unplanned response to a risk that has already occurred
• They are “corrective” actions

Active Risk Acceptance

• Device a contingency plan

Passive Risk Acceptance

• Take no action except to document the risk and let the project team deal with the risk as it occurs

Risk Averse

• Reluctant to take risks

Risk Exposure

• An aggregate measure of the potential impact of all risks at any given point in time in a project, program, or portfolio

Issue

• A risk that has already occurred
• Will impact the project negatively
• Has an issue owner
• Refer to Risk vs Issue for more details