Risk Management Plan Unit 4 Created by: First name Last ✓ Solved

Introduce and describe 5 risk management processes: risk planning, identifying risks, analyzing risks, planning risk responses, and monitoring and control.

Risk Management Processes

Risk Planning

Risk planning involves defining how to approach and plan the management of risks throughout the project. It sets the foundation for identifying, analyzing, and responding to risks effectively.

Risk Identification

This process focuses on determining what risks might affect the project and documenting their characteristics. Identifying risks early can help teams prepare and develop appropriate mitigation strategies.

Risk Analysis

Risk analysis is the process of assessing the likelihood and potential impact of identified risks. This can involve both qualitative and quantitative analysis to prioritize risks based on their significance.

Plan Risk Responses

Planning risk responses involves developing strategies to address identified risks, whether by mitigating, transferring, avoiding, or accepting them. Proper planning reduces the negative impact of risks on the project.

Risk Monitoring and Control

This process entails tracking identified risks, monitoring residual risks, and identifying new risks throughout the project lifecycle. It also includes evaluating the effectiveness of risk response strategies.

Risk Identification Techniques

Brainstorming

Brainstorming sessions can bring together team members to generate ideas about potential risks. This spontaneous approach can lead to the identification of unexpected risks.

Interviewing

Conducting interviews with stakeholders or team members can uncover insights regarding potential risks. This technique allows for a deep dive into the experiences and expectations of those involved in the project.

Experience

Utilizing historical data from previous projects can help identify common risks. Project teams should leverage prior experiences as reference points for potential risks in the current project.

Expert Opinion

Engaging with subject matter experts can provide valuable insights into risks that may not be immediately apparent. Their expertise can guide the identification of specialized risks.

Root Cause Analysis

This analytical approach focuses on identifying the underlying causes of risks. Understanding root causes can help mitigate risks effectively rather than simply addressing symptoms.

Risk List

Present 15 key risks identified from the project. Examples include:

• Risk ID 1: Internet downtime affecting homework completion
• Risk ID 2: Technical challenges with software implementation
• Risk ID 3: Delays in material supply impacting project timeline
• Risk ID 4: Budget overruns due to unexpected expenses
• Risk ID 5: Resource availability affecting project staffing
• Risk ID 6: Stakeholder disagreements over project scope
• Risk ID 7: Compliance issues with regulatory standards
• Risk ID 8: Lack of user engagement with new system
• Risk ID 9: Equipment failure during critical project phases
• Risk ID 10: Negative press coverage impacting project perception
• Risk ID 11: Insufficient training for staff
• Risk ID 12: Changes in project team leadership
• Risk ID 13: Market fluctuations affecting project viability
• Risk ID 14: Cybersecurity threats impacting project data
• Risk ID 15: Inaccurate project estimates leading to scope creep

Risk Breakdown Structure

Identify key risk assessment categories with specific risks:

• Budget: Unexpected costs leading to budget overruns.
• Schedule: Project delays due to unforeseen circumstances.
• Human Resources: Staff turnover affecting project continuity.

Impact and Probability Matrix

Create an Impact and Probability Matrix to define each level of risk:

IMPACT	LOW	MEDIUM	HIGH
PROBABILITY	LOW	LOW	LOW	MEDIUM
MEDIUM	LOW	MEDIUM	HIGH
HIGH	MEDIUM	HIGH	HIGH

Risk Response Strategies for Negative Risks

Mitigate

Mitigating risks involves reducing the likelihood or impact of risks through proactive measures. Effective mitigation strategies can minimize disruptions.

Transfer

Transferring risks involves shifting the impact of a risk to a third party, often through contracts or insurance. This helps protect the project from potential losses.

Avoid

Avoiding risks entails changing project plans to eliminate risks entirely. This proactive approach is valuable when risks are too significant to accept.

Risk Response Strategies for Positive Risks

Exploit

Exploiting positive risks means taking advantage of opportunities that can enhance project outcomes. This could lead to increased benefits and improved project performance.

Enhance

Enhancing positive risks involves increasing the likelihood or impact of beneficial outcomes. This can be achieved through additional resources or strategic adjustments.

Share

Sharing positive risks means collaborating with others to capitalize on opportunities. This can involve partnerships or joint ventures to maximize benefits.

Risk Response Strategies for the Project

Risk ID

Example description of how to respond to specific risks identified in earlier assessments. Ensure action plans are developed for each risk.

Risk Management Roles and Responsibilities

Role 1: Risk Manager

Responsible for identifying and managing risks throughout the project.

Role 2: Project Manager

Oversees the project’s progress and aligns risk management with project objectives.

Role 3: Project Sponsor

Provides support and resources for risk management activities.

Role 4: Project Team Members

Contributes to risk identification and response planning.

Role 5: Stakeholders

Involved in understanding and responding to project risks.

Risk Management Budgeting

Labor

Estimated costs for personnel involved in risk management activities.

Equipment

Budget for any necessary tools or technology for risk management.

Materials

Costs for materials required to implement risk response strategies.

Other

Includes travel and office supplies related to risk management.

Risk Management Timing

Establish a schedule for regular risk management activities, including audits and reviews, to ensure compliance and effectiveness. These may vary depending on project phase.

Risk Types

Negative risks (threats)

Potential events that could harm project objectives.

Positive risks (opportunities)

Events that could benefit the project if leveraged properly.

Internal risks

Risks originating within the project or organization.

External risks

Factors outside the control of the project team that could impact outcomes.

Stakeholder Tolerance

Risk averse

Stakeholder groups that prefer to avoid risks.

Risk seekers

Groups willing to take on more risk for potential rewards.

Team Preference

Evaluating whether a homogeneous or heterogeneous team is preferred based on project needs.

Risk Monitoring and Control

Auditing Risks

Determine the frequency of audits and the roles responsible for conducting them, including mechanisms to identify and remove outdated risks from the project.

References

• Project Management Institute. (2021). A Guide to the Project Management Body of Knowledge (PMBOK® Guide). Newtown Square, PA.
• Hillson, D. (2017). Practical Project Risk Management: The ATOM Methodology. Berrett-Koehler Publishers.
• Gray, C. F., & Larson, E. W. (2017). Project Management: The Managerial Process. McGraw-Hill Education.
• Kerzner, H. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Control. John Wiley & Sons.
• Lehtinen, P., & Järvenpää, H. (2020). Risk Management in Projects. Routledge.
• Schwalbe, K. (2015). Information Technology Project Management. Cengage Learning.
• Meredith, J. R., & Mantel, S. J. (2017). Project Management: A Managerial Approach. John Wiley & Sons.
• Pinto, J. K. (2016). Project Management: Achieving Competitive Advantage. Pearson.
• PMI Risk Management Specific Interest Group. (2017). Risk Management: A Best Practice Framework. Project Management Institute.
• Bourne, L. (2015). Making Projects Work: Effective Stakeholder and Communication Management. Bath Publishing.