1 December 2022

Risk Management processes : Plan Risk Management

Purpose of Plan Risk Management

  • Risk attitude, probability, and impact definitions are determined in the plan risk management process.

Inputs

  • Project charter
    • High level risks
  • Project management plan
    • Project Scope Statement
    • Schedule Management Plan
    • Cost Management Plan
    • Communication Management Plan
  • Project documents
    • Stakeholder register
  • EEF
    • Risk thresholds set by the organization and key Stakeholders
    • From here, you will know the company’s Level of risk tolerance.
    • The lower the level of tolerance is; the more stringent risk Management should be.
  • Organizational Process assets
    • From them you get the templates, risk Categories, definitions, etc.
    • Company Historical Records
    • Policies
    • Templates
      • For Risk management plan
      • For risk register
      • For risk reports
    • Look-up tables (tables de correspondance)
      • Look-up table determine the priority of a risk given its probability and impact.
    • Risk categories
    • RBS
    • Common definitions of risks and terms
    • Probabilities defined in look-up table
    • Risk statement formats
    • Roles and responsabilities
    • Authority levels for decision making
    • Lessons learned repository from previous similar projects

Tools and Technics

  • Expert judgment
  • Data analysis
    • Stakeholder analysis
    • Analatycal techniques
      • You analyze (i.e. think and try to understand) your stakeholders risk tolerance and the exposure to risks your project has.
      • From that you can determine how much to invest in risk management ( for example, a low risk tolerance and high risk exposure will require stronger management of risks)
      • Project rating scheme
      • You can create an overall project rating scheme to reflect the bias towards risks that affect the project schedule.
  • Meetings
    • Meetings are used for discussions and brainstorming.
    • You need to invite relevant people from your project team, stakeholders and the organization.

Outputs

  • Risk Management Plan
    • The risk management plan is a great way of communicating how you intend to conduct risk management.
    • Ultimately, the risk management plan will be placed in the project plan before project execution starts.
    • Content
      • Risk strategy
      • Risk management Methodology
        • Methodology
          • Defines how you will conduct risk management and what tools will be used.
          • Risk management techniques and guidelines for use
          • Criteria for success
          • Thresholds and corresponding definitions
          • Templates
          • Links with Communication management plan
        • Tailoring
          • Specific items to tailor include:
            • When risk activities are done
            • How much time is spent on the activities
            • Who is involved
            • What standard rating schemes are used
            • What forms and processes are used
          • Adaptation
            • Adaptation also relates to company risk management policies
      • Assignment of roles
        • Defines who will do what.
        • Roles, responsibilities and authority
          • Risk management organization
      • Budgeting
        • If your risk management activities will cost you money, then you need to include that in the overall project cost.
        • Funding
        • Protocoles for contingency and management reserves
        • Budget
      • Timing
        • Defines when you are going to conduct risk identification, risk analysis, response and audits.
        • Risk management activities
      • Risk categories (or sources of risk)
        • Sources of risks are usually organized in an RBS.
        • Potential categories of risks
        • Customer
        • Customer’s customers
        • Lack of project management effort
        • Lack of knowledge of project management
        • Suppliers
        • Resistance to change
        • Cultural differences
        • Specific risk categories
          • External
          • Internal
          • Technical
          • Commercial
          • Unforeseeable (imprévisible)
        • Additional exemple of sources of risk
          • Scope
          • Schedule
          • Cost
          • Quality
          • Resources
          • Customer satisfaction
          • Stakeholder satisfaction
          • Business risk
          • Pure (insurable) risk
          • Only a risk of loss (fire, theft, personal injury, …)
        • List
        • RBS
  • Risk matrix
    • Very important for defining the probabilities and impacts and for making your project team and stakeholders clear about them.
    • Your risk matrix might be the single most important tool for risk analysis.
    • Definitions of probability and impact
    • Preparation of the probability and impact matrix template
  • Stakeholder risk appetite, thresholds and tolerances
    • You will know about company tolerance from the enterprise environmental factors.
    • Tresholds are a study of the organization’s risk tolerance.
    • However, you need to revise the tolerance for the specific project at hand.
    • Stakeholders tolerance
  • Reporting and tracking
    • Most of the communication can be done by sharing the updated risk register.
    • You need to specify the information it will contain.
    • During risk planning, you will also define how you will document and audit the implementation of risk management (for this task, it’s usually better to appoint a risk manager).
    • Reporting formats
    • Tracking

PMI-RMP Certification exam flashcards

Created : 19/05/2022

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