Project Management Framework
Planning - Risk Management Plan
Definition
Risk is anything that threatens or limits the ability of a project to achieve its goal, objectives, or the production of project deliverables. Risk management is a process of thinking systematically about all possible undesirable outcomes before they happen and setting up procedures that will avoid them, minimize their impact, or cope with their impact.
Why is this important?
It is important to identify and analyze risks to determine which risks present the greatest threat to the project's successful outcome and address and treat them as early on in the project as possible.
Instructions
There are two basic activities in risk management:
Risk Assessment (figuring out what the risks are and what to focus on)
- Making a list of all of the potential dangers that will affect the project
- Assessing the probability of occurrence and potential loss of each item listed
- Ranking the items (from most to least dangerous)
Risk Control (doing something about them)
- Coming up with techniques and strategies to mitigate the highest ordered risks
- Implementing the strategies to resolve the high order risks factors
- Monitoring the effectiveness of the strategies and the changing levels of risk throughout the project.
Various tools can be used to accomplish the above.
How to Scale
Large projects require more detailed risk planning due to the number and complexity of risks. This often includes the development and analysis of alternative strategies and strategy evaluation criteria. The ranking and development of mitigation strategies may also require a larger scale of assignments for probability and/or impact (such as low, medium, high and very high).
Related Links:
Risk Management Plan Examples
Risk Management Plan Template
Risk Management Plan Execution
Risk Management Log
Checklists