There are always risks associated with a project. Purpose of risk management is to ensure levels of risk and uncertainty are properly managed so that the project is successfully completed. It is important to understand Risk Management and employ contemporary risk management practices. This article contains streamlined approach to Risk Management.
Risk identification begins in the early planning phase of the project. A Risk Management Excel Worksheet is started during the planning phase. Then, as scheduling, budgeting, and resource planning occur, the worksheet is updated to reflect further risks identified in the planning.
At this point, (or when a risk probability increases) the project manager and project team develop mitigation strategies that assess the impact of the problem. Mitigation strategies divide in two types:
At project start-up, the Risk Management Worksheet is reviewed again, and any new risks are added to it. As the project progresses, members of project team identify new risk areas that are added to the Risk Management Worksheet.
Risk identification is a recurring event; it is not performed once and then set aside. Risk identification, management, and resolution continue after project initiation throughout the life of the project. New risks are developed as the project matures and external and internal situations change. Trigger dates are be included in the schedule for tracking risks.
The Risk Management Worksheet records details of all the risks identified at the beginning and during the life of the project, their grading in terms of likelihood of occurring and seriousness of impact on the project, initial plans for mitigating each high level risk and subsequent results.
The Risk Management Worksheet usually includes:
Risk Management Worksheet is kept throughout the project, and changes regularly as existing risks are re-graded in the light of the effectiveness of the mitigation strategy and new risks are identified.
Risk Management Worksheet is amended by conducting a number of meetings or brainstorming sessions involving (as a minimum) the Project Manager, Project Team members, Project Executive, Customer (via Instant Messaging or Phone).
The Risk Management Worksheet is visited weekly with re-evaluation of the risks occurring on a monthly basis. On an agreed regular basis a Risk Status Report is conducted to the Customer, as a part of Project Status Report.
Project Manager is responsible for monitoring and managing all aspects of the risk management process, including:
Note: In very large projects, the Project Manager may choose to assign risk management activities to a separate Risk Manager, but the Project Manager still retains responsibility.
Other Project Team members assist with the identification, analysis and evaluation of risks and assist in the development of the Risk Management Worksheet. They are also responsible for risk mitigation strategies.
Project Executive provides input into the Risk Management Worksheet, especially assessment of potential risks and risk mitigation strategies. They are also responsible for some risk mitigation strategies.
Customer oversees the Risk Management Worksheet in its periodic review. They are responsible for ensuring an effective risk management process is in place throughout the life of the project.
The following table summaries the roles and responsibilities of personnel and customer in the Risk Management process.
Personnel\Customer Role and Responsibility Customer Identify Risks, Monitor Risk Status Project Executive Identify Risks, Develop Mitigating Strategies, Monitor Risks Status Project Manager Identify Risks, Develop Mitigating Strategies, Monitor Risk Status, Report Risk Status Project Team Identify Risks, Develop Mitigating Strategie
Attached you can find sample Rish Management Worksheet and Risk Status Report templates.
|Risk Management Worksheet.xls||14.5 KB|
|Risk Status Report.xls||15.5 KB|