ORSIPARM is an acronym from risk analysis that provides a concise and handy mnemonic to help one’s focus on the opportunity and risk process.
Some project managers and schedulers need a quick reminder to help them keep a handle on the opportunity and risk process. The ORSIPARM acronym stands for Opportunities, Risks, Scanning, Identification, Prioritization, Action, and Reserves. Memorizing this mnemonic helps keep the key messages of the opportunity and risk process at the forefront of the project managers thoughts.
This article provides a brief overview of the ORSIPARM mnemonic acronym
Opportunity and Risk Types – Known and Unknown
Before diving into our mnemonic acronym it is helpful to cover three opportunity and risk related classifications: ‘known–knowns’, ‘known–unknowns’, and ‘unknown–unknowns’.
This risk classification is based on the level of knowledge about a risk event’s identification (known or unknown), and the level of knowledge about its occurrence and impact, or certainty (known or unknown).
Known–knowns are things we know that we know or our identified general knowledge. They are definitely in the project baseline. On the other hand, a hurricane may be an identified known event but its occurrence and/or impact uncertain or unknown. A hurricane may have two uncertainties track and intensity. If either its track or intensity are uncertain that event is considered uncertain. The hurricane thus is a known-unknown.
Known–unknowns are things we know we do not know. These are our risks. They require identification in the opportunity and risk register. Finally, unknown–unknowns are the worst kinds of risks. They are unidentified risks; we don’t even know they exist and can hit us with significant serious unexpected impacts. They cannot be anticipated and identified beforehand.
The ORSIPARM Acronym
With these opportunity and risk classifications in mind let’s review our acronym. The ORSIPARM acronym mnemonic breaks down as follows.
Opportunities & Risk (OR) – The acronym begins with opportunity and not risk. This is a reminder to project managers when brainstorming to consider opportunities first. Otherwise, risk takes the focus away and opportunities become extremely difficult to work out.
Scanning (S) – Project management requires vigilance. Project managers must constantly scan the project environment to keep tabs on the ever evolving project situation. This includes scanning current situation, confirming updates, and looking for evidence or signs of an imminent storm.
Identification (I) – Both opportunities and risk require identification. And the widest possible identification. We want to document what is clearly visible, and to increase our handle on ‘known-unknowns’. ‘Known-unknowns’, again, are items requiring identification in the opportunity & risk register. Again, the goal is for the widest possible identification of opportunities and risk in the project environment.
Prioritization (P) – Opportunities and risks require prioritization to focus efforts on top item opportunities and risks. Without prioritization opportunity and risk registers quickly become unwieldy. Prioritization helps reduce the register to a manageable number.
Actions (A) – Schedulers want a limited number of clearly defined actions to take advantage of opportunities and mitigate the risks. Action requires implementation and tracking. Some actions may cost time and/or money but ultimately benefit the project.
Reserve (R) – Reserves help project managers deal with both ‘known-unknowns’ and ‘unknown-unknowns’. This includes both schedule float and cost contingency. Proper reserve levels protect the project.
The ORISPARM mnemonic highlights all the major opportunity and risk related processes. Opportunities come before Risks. Scan the project environment for impending threats. Identify both opportunities and risks and increase the universe of known-unknowns. Prioritize to focus efforts on significant opportunities and threats. Take action to mitigate risk. Finally, have schedule and cost reserves to deal with both known-unknowns and unknown-unknowns.