Module 8

• Risk Management Plan


  Describes how you will define and manage risk on the project. This document does not actually describe the risks and the responses. This document defines the process and techniques you will use to define the risks and the responses.
• Elements or Components of a Risk Management Plan

  • Roles and responsibilities
  • Budgeting
  • Timing
  • Scoring and interpretation
  • Thresholds
  • Communication
  • Tracking and Auditing
• Roles and responsibilities


  • The project manager typically has overall responsibility for risk management, unless the team is large enough that this role can be delegated to another team member – perhaps a specialist. Third-party risk management teams may also be able to perform more independent, unbiased risk analyses of project than those from the sponsoring project team.
• Budgeting


  Discuss your budget for risk management for the project. Since you may not know enough to request budget for risk management you can also describe the process that you will use to determine a risk management budget estimate.
• Timing


  Defines when the initial risk assessment will be performed, as well as how often the risk management process will be conducted throughout the project life cycle. Results should be developed early enough to affect decisions.
• Scoring and interpretation


  You should define risk scoring and interpretation methods appropriate for the type of the qualitative and quantitative risk analysis being performed. Methods and scoring must be determined in advance to ensure consistency.
• Thresholds


  The threshold level is how you determine which risks are important enough to act upon. The project manager, client, and sponsor may have a different risk threshold. The acceptable threshold forms the target against which the project team will analyze risks.
• Communication


  Describe how the information on risk will be documented and communicated. This includes the risks themselves, the risk responses and the risk status.
• Tracking and Auditing


  Document how all facets of risk activities will be recorded for the benefit of the current project, future needs, and lessons learned. Also describe if and how risk processes will be audited.
• Steps or Ways on Creating and Preparing a Risk Management Plan

  1. Identify risks

  2. Minimize or eliminate risks

  3. Identify who has to do what should a disaster occur

  4. Determine and plan your recovery contingencies
• Identify risks


  • What are your risks and how likely are they to occur? Some will cause major disruption while others will be a minor irritation. You must make an educated assessment of both the likelihood and potential severity of each risk to prioritize your planning efforts. Risk identification occurs at the beginning of the project, as well as throughout the project. While many risks are considered "known risks", others might require additional research to discover.
• Minimize or eliminate risks

  Review the qualitative and quantitative impact of the risk and then assign a likelihood score (from low to high probability) and a risk impact score (either low, medium, or high).
• Risk assessment matrix


  A tool used to plot risks visually based on likelihood and impact
• Identify who has to do what should a disaster occur

  Assign each risk to a team member who will be responsible for taking ownership if the risk becomes an actual issue. Understand the risk triggers or warning signs that signify they need to jump into action.
• Determine and plan your recovery contingencies

  Recovery contingencies should be determined by the type, style and size of your business and by the extent of the damage.
• The point of a risk management plan is to get ahead of risks as much as possible
• Risk


  When it's a knowable risk, you can identify the exact trigger. When it's impossible to pinpoint the exact cause.
• Using a project management tool is important for risk management
• Risks


  Should be assigned to a single person but visible to all
• Determining and planning recovery contingencies

  1. Determine based on type, style and size of business and extent of damage

  2. Use Emergency Contingency Planner to cover all bases
• Ways to handle a risk that has become an issue

  • Avoid (change plan to bypass issue)
  • Transfer (outsource risk to different team or agency)
  • Mitigate (take immediate steps to reduce impact)
  • Accept (assume chance of negative impact or budget for it)
• The depth of detail in risk response plan should match the significance of the risk
• Communicating the risk management plan

  1. Ensure all relevant people (staff, suppliers, contractors, service providers) are aware of strategies

  2. Train staff and ensure everyone practices the process
• Contingency plan


  What to do if a high priority, high impact risk becomes realized
• Steps in a contingency plan


  1. Find and document resources that can be used in an emergency

  2. Know who needs to be notified

  3. Create a plan of action for dealing with the issue

  4. Keep an eye on risk triggers
• Risk threshold


  The amount of risk a company or stakeholders are willing to take on
• Risk management is a circle, not a linear path. The plan needs to be a living document.
• Whoever owns the risk needs to be responsible for tracking it, updating it, and making others aware
• Risk management can't be done in a silo, it needs to be an integrated part of project management
• Best practices for maintaining a risk management plan


  • Focus on the monitoring phase
  • Evaluate and re-evaluate risks and scores at every project milestone
  • Use project dashboards and tracking features
  • Conduct interviews at each milestone to identify new risks or expired risks
  • Report relevant updates to key stakeholders