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A good risk management plan is critical to cutting down on unexpected project risks. A strong plan can decrease problems on a project by as much as 80 to 90 percent. Follow this practical approach to creating an effective risk management plan.
The first step in writing the plan is to assemble all stakeholders and identify all possible project risks. This can be done from various reports, project documents, through various departments and also from prior project reports. The project scope is the rule book that guides the project, therefore all possible risks that the scope indicates will also have to be documented. All documentation of risks will have to be done in the Risk Register.
Every project is faced with risks. There is no 100% certainty that risks will not occur. There are risks that creep up at various phases of the project that the team has to be vigilant and ready to handle. However, while some risks may be beneficial, in that the sponsor and all team members have to take them to reach the end product, there are many risks that harm and hinder the project.
The risks that are identified have to be analysed for their probability and impact using the PI Matrix and also translated into numerical values so as to accurately know the outcome of these risks on the cost, time and resource factors. There are two methods of risk analysis; Qualitative and Quantitive Risk Analysis
In Step Five, based on the collective ideas of all the departmental teams, the project manager will have to decide on a plan of action to bring about risk resolution. Risks with a high P-I value will have to be treated with utmost urgency while those with the least probability or impact can just be monitored without having any real action plan. Identifying the most serious risks at the onset of a project saves time, cost and resources, and likewise identification of such risks also trigger the resolution plan at the earliest moment.
The last step in writing a risk management plan is assigning an owner for each risk on the master list. Use the Responsibility Assignment matrix. Using this chart, various teams and team members may be assigned responsibility for carrying out the risk resolution plans. At the end, the project manager is solely accountable to the project sponsor for all the plans and actions related to the risks and project at large.
Related: Bright Hub Project Management
Ibrahim is a co-author at ERIYADA focusing more on subjects like governance, agility, sustainability, efficiency, and transformation, you can reach me at reach@eriyada.com
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