PgMP Practice Questions #3
During the delivery phase of a complex program, a moderate severity operational risk was identified in both Component A and Component B. Later, it was discovered that this risk was more severe at the program level than initially assessed within each component, resulting in significant impacts on the program timeline and budget. As the Program Manager, what action would you take to prevent a similar situation in the future?
A. Ensure project managers within each component document their risks and share updates with the program office more frequently
B. Revisit the risk management plan of each component to redefine risk severity levels
C. Implement a cross-component risk management process that regularly assesses interdependencies and potential compounding effects of risks
D. Lower the risk escalation threshold at the component level to ensure earlier escalation to the program level
Analysis
During the delivery phase of a complex program, an operational risk initially identified as moderate severity within both Component A and Component B became significantly more severe at the program level. This escalation considerably impacted the program’s timeline and budget, indicating that the risk materialized into an issue causing significant consequences. To prevent similar situations in the future, the program manager needs to address how risks can compound across components and ensure that the risk management processes effectively identify and mitigate such interdependencies to prevent risks from turning into issues with substantial impacts.
Analysis of Options
Option A: Ensure project managers within each component document their risks and share updates with the program office more frequently. While increased documentation and more frequent updates can enhance communication, the core issue is not about the frequency of risk reporting. The problem arose because individual risks, assessed as moderate within separate components, compounded to have a greater impact at the program level. Simply sharing updates more frequently does not address the need to manage the interdependencies and potential compounding effects of risks across components. Therefore, this option does not prevent the risks from becoming significant issues affecting the program’s timeline and budget.
Option B: Revisit the risk management plan of each component to redefine risk severity levels. Adjusting risk severity levels within each component may improve individual assessments but does not tackle the overarching issue of risks compounding at the program level. The risks were initially identified correctly as moderate within their components, but their combined effect was more severe when they interacted. Redefining severity levels in isolation fails to consider how risks interact across components and does not prevent them from materializing into issues that significantly impact the program.
Option C: Implement a cross-component risk management process that regularly assesses interdependencies and potential compounding effects of risks.This option addresses the problem by establishing a risk management process considering interdependencies between components. By regularly assessing how risks in one component may affect others and how they might compound, the program manager can identify potential escalations before they occur. This proactive approach enables the management of risks at the program level, preventing them from becoming issues that have significant impacts on the program’s timeline and budget.
Option D: Lower the risk escalation threshold at the component level to ensure earlier escalation to the program level. Lowering the escalation threshold might lead to earlier risk identification but does not address the main issue of compounding risks. The question does not indicate that delayed escalation was a problem; rather, it highlights the severity increase due to interactions between risks across components. Lowering the threshold may lead to more escalations without directly solving the issue of compounded risk effects.
Conclusion
The most appropriate answer is Option C: Implement a cross-component risk management process that regularly assesses interdependencies and potential compounding effects of risks. According to the Program Management Standard (Fifth Edition), program risks can compound rather than simply aggregate, often resulting in a program-level impact that is greater than the sum of individual component risks. This approach addresses the need for an effective process to identify and manage compounded risks at the program level, preventing them from escalating into significant issues that impact the program’s timeline and budget.
PgMP Certification Exam Content Outline Mapping
| Domain | Task |
|---|---|
| Governance | Task 6: Regularly evaluate new and existing risks that impact strategic objectives to present an updated risk management plan to the governance board for approval. |
Topics Covered
- Program Governance Framework
- Industry Best Practices
- Organizational Standards and Processes
- Standardization for Efficiency and Consistency
- Role of the Program Manager
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