Published 04.08.2017 by Nicolas de Teilmann

Advanced Risk Management (PMI-RMP)

A year ago I set myself an ambitious challenge: Obtain the 3 most sought after PMI certifications within 12 months (based on active certification holders). PMP, PMI-ACP, and PMI-RMP (excl. CAPM as being an entry level certification for project practitioners). 2nd August, I passed the third exam (PMI-RMP) thus completing this goal.
Along the way I obtained a ton of new knowledge and lessons learned, I even had the pleasure to lead a couple of study groups, who all passed their exams as well.
It has definitely been worth the effort as I've grown tremendously as a professional.

As with the other certifications (PMP and PMI-ACP) I want to give back and share the process and lessons learned for anyone else who wants to learn more about this certification.

The difficulty for this certification is on par with the PMP certification. Though the litterature is a lot less, I found the exam to be a bit more difficult because there's a lot of text, calculations and statistics which takes time to do and interpret. This was the first time I actually spend all the time allocated for a PMI-exam. Since the litterature is less, the total time required to read, fully understand the topics and prepare for the exam is only about 25 hours (if you follow this guide). So if you want to dig into risk management, this is a great way to do it and get recognized for your skills. After all, it's only 3 hours per week for 2 months!

PMI Fact File
PMI-RMP

PMI-RMP ▷ What does it entail?

If you have advanced knowledge and experience in risk management, or if you are a project manager focused on project risk management, including for large projects and/or complex environments, then the PMI-RMP® is an excellent choice for you.

  • Individuals develop competence in dealing with project management risks, alleviating threats and optimizing and capitalizing on opportunities. They develop the know-how to maintain a basic competence across a broad cross-section of project management domains.
  • This certification is a recognition and validation of a professional’s efficiency and competency in understanding, identifying, and applying strategies to control risk. Involving both, theoretical understanding, and practical knowledge

“Project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, and quality”
-PMBOK 5th Edition

Find more details at PMI’s site

 

PMI-RMP ▷ Eligibility Requirements

Prerequisites

  • 3.000 hours of spent in the specialized area of professional project risk management within the last five consecutive years
  • Consider all of the projects that you have worked on and identify how many hours you spent on project risk management. If you worked on multiple projects at one time, all the hours spent on project risk management count toward the total.
  • 30 contact hours of formal education in the specialized area of Project Risk Management
  • If you have completed a university or college course on project risk management that met for three hours per week for 15 weeks, you would record 45 contact hours. If only a portion of a course dealt with project risk management, only the hours spent on project risk management can be applied toward the total.
  1. Join PMI ($129) your Business Unit will pay the first year of membership, and you can download the PMBoK as a pdf
  2. Submit your PMI-RMP application. After 5 working days, you will receive a mail stating your eligibility to pay for the test
  3. Pay exam fee ($520). You now have 1-year to take the take the test. You will be notified of any audit after payment (~5%)
  4. Studying is essential. Literature ranked based on exam value (Expect to use min. 15 hours reading)
    1. A Guide to the Project Management Body of Knowledge (PMBOK Guide) (25%)
    2. Practice Standard for Project Risk Management (40%)
    3. STUDY GUIDE For the PMI RISK MANAGEMENT PROFESSIONAL (100%)
  5. Join a PMI-RMP study group (Or create your own study group)
  6. Test, test and test practice exams (Expect to use min. 8 hours on tests)
  7. Take final exam – 3,5 hours no aids (Pass/Fail based on overall performance)
  8. Keep PMI membership and/or PMI-RMP certification current (optional). Requires 30 PDUs every 3-year cycle.
RMP Books

Literature
The PMI-RMP exam can be passed with only the STUDY GUIDE For the PMI RISK MANAGEMENT PROFESSIONAL by Abdulla Alkuwaiti (Book 3). However, I do recommend to obtain the PMBOK if you don’t already own it and skim through it. Quite a few questions are related to communication, time, procurement, HR, and Quality Management Knowledge Areas, which you will get to know from the PMBOK. If you already have read the PMBOK, there’s really no need to go back and read it again.

Regarding the Practice Standard for Project Risk Management, I don’t recommend buying it, it is only 100 pages and the real value only comes from the template examples in the appendices. So it’s certainly not required for the PMI-RMP exam - And it’s really expensive for what you get.

 

PMI-RMP Audit
In the case of PMI Audit: You will be either a category one or two.

Category one: You need to verify your project management experience, training, and formal education.

Category two: You need to verify your project management experience and training.

Verification steps:

Project Management Experience
A manager, supervisor, or colleague who has firsthand knowledge of the experience on your application is required to review and then complete the Project Management Experience Audit Report.

Training
Applicants must provide documentation showing successful completion of each course submitted, meeting the requirements of the 35 hours of project management education. You must include a certificate, transcript, or letter of attendance from the company, Registered Education Provider (R.E.P), school, or institute that provided the training

Education
To properly document your attained education you must include a certificate, transcript (official or unofficial), or diploma from the school with which you earned your degree.

PMI-RMP ▷ Risk Management processes

The risk management Knowledge Area is divided into the following 6 processes. Each process has inputs, tools & techniques and outputs.

Risk Management 6 Processes

  1. Plan Risk Management – Define how to conduct risk management activities
  2. Identify Risks – Identify and document risks and characteristics
  3. Perform Qualitative Risk Analysis – Prioritize risks for further analysis by assessing probability and impact
  4. Perform Quantitative Risk Analysis – Analyze numerical effect of risks
  5. Plan Risk Responses – Develop options and actions to enhance opportunities and reduce threats
  6. Control Risks – Implement risk response plans, track and monitor risks, identify new risks and evaluate process efficiency

 

PMI-RMP ▷ Exam Content Outline

The PMI-RMP® examination consist of 170 multiple-choice questions with the following domain distribution:

RMP Exam content

For additional information about subdomains and tasks, please check the official PMI-RMP Exam Outline

 

 

PMI-RMP ▷ Exam and tests

The PMI-RMP® examination consists of 170 multiple-choice questions and you have 3,5 hours to complete it.

When searching for test exam questions and simulators to use as preparation for the exam, I found it funny that all the sites had exactly 273 questions. I bought access to validate and I can confirm all the sites are using the same question bank, so save your money and just use exam-labs’ free questions.

  1. exam-labs.com (High-Quality 273Qs - Free)
  2. pass-guaranteed.com (High-Quality 273Qs same questions as exam-labs but offers pdf/simulator – $80)
  3. itcertspass.com (High-Quality 273Qs same questions as exam-labs but offers pdf/simulator – $60)
  4. itexamworld.net (High-Quality 273Qs same questions as exam-labs but offers simulator – $30)
  5. pmsprout.com (High-Quality 170Qs exam simulator – $10)
  6. ucertify.com (High-Quality 340Qs exam simulator – $252)

Practice exam tips
There are multiple questions on calculating Cost Performance Indicators (CPI) and Earned Value Management. Skip all questions on CPI, Schedule Performance Indicator (SPI), Actual Cost (AC) etc. They are only used in PMP. However, you should do the Expected Monetary Value (EMV) and PERT calculations as these are on the PMI-RMP exam.

Exam tips
You are not allowed to bring anything into the exam room; no water, no snacks, calculator or anything. Any breaks you take are in your overall 3,5 hours’ test time.

On average you should be doing 1 question every 1,25 minute, which is a bit easier than the PMP and a bit harder than the ACP, on paper.

However, the questions tend to have a lot of text for this certification, calculations and/or interpretation of Latin Hypercube/Monte Carlo simulations or scatter diagrams so this was the first PMI exam where I actually ended up using all the allocated time. I only had 5minutes left when I ended the exam.

 

PMI-RMP ▷ RMP checklist

These concepts are critical for understanding as you will see many questions on these topics in your exam, so go through this checklist and make sure you know these areas.

  • Risk vs Issue: Risk is something that can happen in the future. When a risk event occurs, it ceases to be uncertain and then becomes an issue. A positive risk (opportunity) that has occurred is called a benefit instead of an issue.
  • 3 Risk attitudes:
    1. Risk appetite - Degree of uncertainty an entity is willing to take in anticipation of the reward.
    2. Risk tolerance - Degree, amount or volume of risk an entity will withstand.
    3. Risk threshold – Entities will accept risks below the threshold but not above the threshold.
  • Degrees of risk appetite:
    1. Risk averse
    2. Risk neutral
    3. Risk seeking
  • Risk types:
    1. Residual Risk – Risk that remains after implementing a risk response
    2. Secondary Risk – New risk that arises as a direct result of implementing a risk response
  • Negative Risk resp. strategies:
    1. Avoid
    2. Transfer
    3. Mitigate
    4. Accept
  • Positive Risk resp. strategies:
    1. Exploit
    2. Enhance
    3. Share
    4. Accept

PMI-RMP ▷ RMP checklist

  • Risk Analysis is a continuous process.
  • For small projects or where organizations have a high-risk appetite ‘Perform Quantitative Risk Analysis’ can be omitted.
  • Quantitative Risk Analysis is done 3 times:
    1. Initially in the Planning Process
    2. After Risk Response Planning
    3. During Monitoring and Controlling
  • FMEA Analysis: Technique experts identify possible causes for product failure, the probability, impact, and how easy it is to detect failures. These opinions are noted down for further review. This technique allows you to relatively easily identify many possible key failures which could affect the product.
  • Analytic Hierarchy Process: A structured technique for organizing and analyzing complex decisions based on mathematics and psychology.
  • Expected Monetary Value (EMV) is used in the ‘Perform Quantitative Risks Analysis’ process and usually used within a decision-tree or to calculate contingency reserves. It’s simply, EMV = Probability * Impact. E.g. P(50), Impact: $200k. EMV: (0,5*200) = $100k

PMI-RMP ▷ RMP Checklist

On the exam, I had about 5% questions on Latin Hypercube sampling (LHS) so let’s brush it off. LHS uses a technique known as “stratified sampling without replacement”. Stratification is the process through which the cumulative distribution curve is subdivided into equal intervals; samples are then randomly extracted from each interval, retracing the input probability distribution.

Most of the questions were about the interpretation of LHS outputs e.g. What is the probability of completing the project at $1,6M – then reading the graph/table (given at the exam) you would have P40 - $1,55M and P50 - $1,65M. So you know the answer is between 40% and 50% and one of the possible answers would be 45%.

LHS

PMI-RMP ▷ RMP Checklist

Monte Carlo simulation provides projects with a way to handle uncertainty. Projects in the early phases have to balance the demands of accuracy with a scarcity of details. Ultimately, upper management wants to know how much the project will cost and how much funding will be requested. The capital the organization uses to fund projects, and specifically to support contingency or management reserves, is a tied-up commitment and should be as realistic as possible.

The Monte Carlo execution steps:

  1. Stakeholder Awareness
  2. Continuous Risk Management
  3. Initial Estimate Preparation
  4. Determine Correlations
  5. Build Model
  6. Run Monte Carlo Simulations
  7. Produce and Communicate Results.

I only had 1 question on the Monte Carlo execution steps, so not required to memorize.

A typical question on Monte Carlo could be a graph like this, and then ”What are the probability for the project to end on 10th April?” In this case, it would be 50% (Left graph). Or the question could be ”Your sponsor has provided you a budget of $2M, what is the probability you will complete the project without overrun?” Here the correct answer would be ~70% (right graph).

MCS1
MCS2

Pictures are taken from Appendix D of the book ‘Practice Standard for Project Risk Management’

 

PMI-RMP ▷ RMP Checklist

  • Contingency plan vs fallback plan (Both are risk response planning)
    1. Contingency plan: A plan developed in anticipation of the occurrence of a risk, to be executed only if specific, predetermined trigger conditions arise.
    2. Fallback plan: Backup plan if the initial response fails.
  • Trigger condition: Circumstance under which a risk strategy or risk action will be invoked.
  • Root-Cause analysis: Help identifies and addresses the fundamental causes of risks for efficient and effective responses. Can help identify symptoms for use as trigger conditions for contingent responses
  • Prompt lists: Set of risk categories which can be used to stimulate risk identification e.g. PESTLE, TECOP, SPECTRUM.
  • PESTLE: Political, Economic, Social, Technological, Legal, Environmental
  • TECOP: Technical, Environmental, Commercial, Operational, Political
  • SPECTRUM: Socio-cultural, Political, Economic, Competitive, Technology, Regulatory/legal, Uncertainty/risk, Market

 

PMI-RMP ▷ RMP Checklist

  • Contingency reserve vs Management reserve
    1. Contingency reserve. Unmanageable known risks
    2. Management reserve: Unknown risks
  • Force field analysis: Typically used in change management, it illustrates the forces for and against change.
  • Work Arounds: Risk responses not initially planned, but are required to deal with emerging risks that were previously unidentified or accepted passively. Any costs associated with Work Arounds are taken from the management reserve (Unknown risks).
  • PERT: The PERT-method is a way of analyzing tasks involved in completing a given project, by calculating the time needed to complete each task. The Most Likely outcome is weighted 4 times as much as the Pessimistic outcome and the Optimistic outcome: PERT=(P+(4M)+O)/6

 

PMI-RMP ▷ Checklist (ITTOs)

ITTO1
ITTO2

I had memorized all these 75 ITTOs and spent 15min of the exam time noting them down on the provided exam paper.

However, I only looked at the notes 4-5 times so I really can’t say it’s worth the effort to memorize all of these and putting it on paper.
Commonalities that will help you if you want to memorize all ITTOs:

4 first, all have: Enterprise environmental factors and Organization process assets as inputs

5 first, all have: Expert judgment as tools & techniques

4 last, all have product documents updates as outputs

First and last, both have meetings

4 middle, all have risk management plan as inputs

 

That's it! If you have followed the process outlined in the beginning and you understand all the topics covered in this checklist, you should also be able to score 75%+ on the practice exams I recommended and you are ready to take the exam and get certified! - Good luck! 🙂