My Project Management Expert

Project Risk Management Plan

A project risk management plan is created to help a project manager to understand the risks inherent in their project, as well as giving them a way of mitigating them. This reduces their impact should they happen.

Now all projects can be perceived as "risky". However knowing how much risk the project is carrying is something which needs to be quantified in a project risk management plan. This enables you to determine and detail all the relevant risks, categorise them, score them and then finally devise an effective course of action to them.

Project risks can be tricky things to quantify since they are things which if they become a reality will cause an adverse impact on the project. Project issues, which are things I spend my time troubleshooting are essentially problems which are adversely affecting the project now.

Now I admit that I am not a big fan of risk logs and risk workshops because they appear to me to be nothing more than excuses why the project might not be able to deliver what is required. However the reality is that as a project manager, you have to do work in this area because few projects do not carry major risks.

So there are four stages to project risk management planning. These are:

  1. Risk Identification
  2. Risk Quantification
  3. Risk Response
  4. Risk Monitoring and Control Assessment

1.0 Risk Identification

This is best carried out via a risk workshop lead by ITQA where all the team leads and interested parties ie business stakeholders are invited to identify potential risks the project faces.

These can vary from business risks through to operational risks. Either way you need to find a way to categorise them and then try to get rid of as many of the "fluffy" ones as possible via the next stage.

2.0 Risk Quantification

This basically consists of two levels;

  • The probability of the risk occurring
  • The impact the risk will cause once it has occurred
For more detail on this please see our page on project management report - risks

3.0 Risk Response

There are 4 things you can do once a risk has been raised. These are:

  • Accept the Risk - The risk is so low that even if it happened, it's impact on the project would be minimal.
  • Mitigate the Risk - Find ways to reduce the impact of the risk should it occur
  • Transfer the RisK - Make someone else responsible such as another project or a 3rd party supplier.
  • Refuse the Risk - It is either so way out or so unlikely to happen that there is no point including as a project risk.

4.0 Risk Monitoring and Control Assessment

This involves keeping an eye on the risks and getting regular updates on them from the assigned risk owners. Obviously the less risks you have raised, the less work you need to do in managing project risk.

Project Risk Management Plan - Tip

If you follow these four steps you should be able to quickly and easily implement project risk management on your project. Just remember not to get carried away. A risk log with 300 risks detailed in it takes a great deal of time and effort to maintain and update. This is time which could be better spent ensuring the risks never materialise by getting the project actually delivered.

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