---
title: "Project risk"
subject: "ICT Project Management"
chapter: 12
key: "semester_7/ict_project_management:project-risk"
source: https://www.bctengineer.com/q/semester_7/ict_project_management/project-risk
site: BCT Engineering
---

# Project risk

ICT Project Management · Chapter 12: Project Risk Management

- Asked in: year not given
- Video: [Project Risk Management | Project Management | PMP Certification | Edureka](https://www.youtube.com/watch?v=HyGb_eaT-U8) — edureka!
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/ict_project_management/project-risk
- Whole chapter: https://www.bctengineer.com/md/semester_7/ict_project_management/chapter-12

## Question

What do you mean by project risk?

## Short answer

Project risk is uncertainty from within the project or its environment that can affect objectives. Sources include unclear requirements, estimation errors, new technology, resource shortages, and external factors. Risk is highest early, measured by probability and impact, and managed through identification, analysis, response planning and monitoring.

## Answer

**Project risk** is an uncertain event or condition that, if it occurs, has a positive or negative effect on at least one project objective, such as scope, schedule, cost or quality. Project risk arises from uncertainty in any phase of the project and from the project's environment.

#### Sources of project risk
- Unclear or changing requirements and scope.
- Estimation errors for time and cost.
- Immature or new technology.
- Resource problems: lack of skilled people, turnover.
- Poor planning and weak management or communication.
- Dependence on suppliers and third parties.
- Organisational support, funding and politics.
- External factors: law, economy, weather, security.

#### Characteristics
1. Uncertainty: not certain to occur.
2. Has a cause and an effect.
3. Level of risk is highest early in the project and decreases as it progresses.
4. Can be positive (opportunity) or negative (threat).
5. Measured by probability and impact.

#### Classification
| Category | Meaning | Example |
|---|---|---|
| Known risks | Identified, can be planned | Vendor delay |
| Unknown risks | Not identified | Unexpected regulation |
| Business risk | Chance of profit or loss | Product fails in market |
| Pure risk | Only loss | Fire, data loss |

#### Project risk management steps
1. Plan risk management.
2. Identify risks.
3. Qualitative analysis (probability-impact matrix).
4. Quantitative analysis (EMV, simulation).
5. Plan responses.
6. Monitor and control.

```text
Probability
 High | M | H | H
 Med  | L | M | H
 Low  | L | L | M
      Low  Med  High  Impact
```

#### Importance
Managing project risk improves the chance of delivering on time and within budget and increases opportunities.

**Example:** In a software project, the risk of "requirements change after design approval" has medium probability and high impact, so a change control process and prototype reviews are planned.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. How does the level of risk change during the project?
   A. Lowest early and increases
   B. Constant
   C. Highest at closure
   D. Highest early and decreases as the project progresses
   Answer: D. Uncertainty reduces as work proceeds. (Key point: Risk over time)

2. Which is a pure risk?
   A. Fire or data loss, only loss possible
   B. Product market success
   C. Opportunity to gain
   D. Profit
   Answer: A. Pure risk has loss only; business risk has profit or loss. (Key point: Pure risk)

3. Which comes right after qualitative analysis?
   A. Identify risks
   B. Quantitative analysis
   C. Monitor and control
   D. Plan risk management
   Answer: B. The order is plan, identify, qualitative, quantitative, responses, monitor. (Key point: Process order)

## Related in ICT Project Management

- [Risk](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Adefine-risk) — ICT Project Management, chapter 12
- [Risk management plan](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Arisk-management-plan) — ICT Project Management, chapter 12
- [Resolution of risk](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aresolution-of-risk) — ICT Project Management, chapter 12
- [Risk audits](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Arisk-audits) — ICT Project Management, chapter 12
- [Importance of risk response planning](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Arisk-response-planning-importance) — ICT Project Management, chapter 12
- [Risk identification techniques](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Arisk-identification-techniques) — ICT Project Management, chapter 12

## Related in other subjects

- [Define risk; types of project risk](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Adefine-risk-types-of-risk) — Project Engineering, chapter 5, asked 2×
- [Gumbel flood at given risk, 50-year project life](https://www.bctengineer.com/question.md?key=semester_5%2Fengineering_hydrology%3Agumbel-risk-63-58-4200) — Engineering Hydrology, chapter 6
- [Sources of project risk](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Asources-of-project-risk) — Project Engineering, chapter 5
- [Internal risk of Nepalese construction project](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-internal-construction-nepalese-company) — Project Engineering, chapter 5