Planning for Risks

Risk Management Plan

Roles

Risk Management Documentation

 Risks

come about for many reasons. Some are internal to the project, and some are external. The project environment, the planning process, the project management process, inadequate resources, and so on, can all contribute to risk. Some risks youll know about in advance and plan for during this process; others will occur unannounced during the project. The Risk Management Planning process determines how youll plan for risks on your project.

The inputs of this process are as follows: Enterprise environmental factors Organizational process assets Project scope statement Project management plan

The risk management plan should include the following elements: Methodology Roles and responsibilities Budgeting Timing Risk categories Definitions of risk probability and impact Probability and impact matrix Revised stakeholder tolerances Reporting formats Tracking

 Technical,

quality, or performance risks Project management risks Organizational risks External risks

Technical Risk

Project Management Risk

Organizational Risk

External Risk

Unproven Technology Quality of Technology Performance Risk

Schedule Planning Project Schedule

Weather

Project Disciplines Unrealistic Requirements Resource Planning Lack of Funding

Labor Issues

Catastrophic Risks

Complex Technology

Cost Estimates and Budget

Identify the risks Definition Risk category Quantify the risks Risk likelihood/probability (very low, low, medium, High, Very High etc) Impact analysis Priority (likelihood + impact)/2 Priority Rating

Very low, low, medium, high, very high

Create Risk Schedule Preventive actions Contingency actions

Budgets/funding Schedules Scope or requirements changes Project plan Project management processes Technical issues Personnel issues Hardware Contracts Political concerns Business risk Legal risk Environmental risk Management risk

Documentation reviews Information-gathering techniques

Brain storming Delphi Technique Nominal group technique Interviewing Root cause identification

Checklist analysis Assumptions analysis Diagramming techniques

cause-and-effect process flowcharts Influence Diagram

 List

of identified risks List of potential responses Root causes of risks Updated risk categories Triggers

 Probability
Impact Effect

Time Cost Quality

Urgency

 Risk

ranking (or priority) for the identified

risks Risks grouped by categories List of risks requiring near-term responses List of risks for additional analysis and response Watch list of low-priority risks Trends in Qualitative Risk Analysis results

 Risk

Response Planning is a process of deciding what actions to take to reduce threats and take advantage of the opportunities discovered during the risk analysis processes. This process also includes assigning departments or individual staff members the responsibility of carrying out the risk response plans youll outline in this process. These folks are known as risk owners.

 Avoid
Transfer

3rd Party You attempt to reduce the probability of a risk event and its impacts to an acceptable level.

Mitigate:

 Exploit
Share Enhance

 Contingency

planning involves planning alternatives to deal with the risks should they occur Contingency planning says the risk might very well occur, and you better have plans in place to deal with it when it does.

 Contingency

allowances or reserves are a common contingency response. Contingency reserves include project funds that are held in reserve to offset any unavoidable threats that might occur to project scope, schedule, cost, or quality. It also includes reserving time and resources to account for risks.

 Manual

workaround Gradual recovery (Cold Standby)

72 Hrs

Intermediate

recovery(Warm Standby)

24-72 hrs

Immediate

recovery arrangements

<24 hrs

Reciprocal

List of identified risks, including their descriptions, what WBS element they impact (or area of the project), categories (RBS), root causes, and how the risk impacts the project objectives Risk owners and their responsibility Risk triggers Response plans and strategies, including the steps to take to implement the strategy Cost and schedule activities needed to implement risk responses Contingency reserves for cost and time Contingency plans Fallback plans List of residual and secondary risks

Team Member

Identify risks in projects Complete the risk form (complete the risk action advised by Board/PM) Review risks and determine priority and impact Implementing risk actions Review Risk after the risk actions taken by members Reviewing High Risk agents and impacts Identify actions to transfer /avoid/mitigate high priority risks

PM

Project Board