the known unknown must be identified, along with the even that will trigger the risk mitigation process. these types of risks are discussed early on during the project planning process and project sponsor and stakeholders confirm and validate the risk, contingency and response plan. <\/p>\n
managing an unknown unknown<\/h3>\n
unknown unknowns are unidentified risks that are not part of the project scope neither form part of the risk management plan. unknown unknown happen not only because of situations that trigger these events haven\u2019t been experience before but because the project team has not analyze or brainstorm enough about the possibilities and risks of unprecedented issues. <\/p>\n
i understand that some risks are time-dependent, others are progress-dependent while others are just residual risks after a risk has been mitigated. events that are uncertain in nature and uncertain in consequences fall into this category and a more thorough analysis is needed. <\/p>\n
an event must be analyzed in terms of impact, occurrence, consequence and likeliness for it to be considered as an unknown unknown. when all of these areas are not covered by any risk management plan. then we must need to address the unknown unknown.<\/p>\n
addressing the unknowns<\/h3>\n
as we have discussed there are two types of unknown. contingency reserves will address known unknowns while management reserves are to take care of all other unknowns. the management reserve is only a discretionary quantity that is established at a corporate level or higher hierarchy allocated to address these unknown. <\/p>\n
the management reserve it is not part of the project budget and needs to have management authorization in order to be released towards the project costs. when you are over budget because of performance issues<\/a>, the management reserve is not to be used. <\/p>\n fallback plans and schedule compression techniques, such as fast tracking and crashing, are great to manage known unknowns and those costs are part of the contingency reserve.<\/p>\n the process of managing the unknowns is a specialized task that requires smes contribution, management approval and risk response plan<\/a>. some of the most frequent tools used during the analysis process are:<\/p>\n each one of these techniques will use a systematic approach analysis costs and consequences that are part of the contingency reserve plan. the monte carlo simulation<\/a> is used to review all the possible outcomes and probabilities of any given action upon an unknown situation. the decision tree analysis is used to determine the path and choices available when a decision is taken. the cost is tied to a percentage of likeliness of an event from happening. <\/p>\nanalyzing the unknowns<\/h3>\n
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