Risk Management Plan
Encyclopedia
A Risk Management Plan is a document prepared by a project manager
to foresee risks, to estimate the impacts, and to create response plans to mitigate them. It also consists of the risk assessment matrix
.
A risk is defined as "an uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives." Risk is inherent with any project
, and project manager
s should assess risks continually and develop plans to address them. The risk management plan contains an analysis of likely risks with both high and low impact, as well as mitigation strategies to help the project avoid being derailed should common problems arise. Risk management plans should be periodically reviewed by the project team in order to avoid having the analysis become stale and not reflective of actual potential project risks.
Most critically, risk management
plans include a risk strategy. Broadly, there are four potential strategies, with numerous variations. Projects may choose to:
Risk management plans often include matrices.
Project manager
A project manager is a professional in the field of project management. Project managers can have the responsibility of the planning, execution, and closing of any project, typically relating to construction industry, architecture, computer networking, telecommunications or software...
to foresee risks, to estimate the impacts, and to create response plans to mitigate them. It also consists of the risk assessment matrix
Risk Matrix
A Risk is the amount of harm that can be expected to occur during a given time period due to specific harm event . Statistically, the level of risk can be calculated as the product of the probability that harm occurs multiplied by the severity of that harm A Risk is the amount of harm that can be...
.
A risk is defined as "an uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives." Risk is inherent with any project
Project
A project in business and science is typically defined as a collaborative enterprise, frequently involving research or design, that is carefully planned to achieve a particular aim. Projects can be further defined as temporary rather than permanent social systems that are constituted by teams...
, and project manager
Project manager
A project manager is a professional in the field of project management. Project managers can have the responsibility of the planning, execution, and closing of any project, typically relating to construction industry, architecture, computer networking, telecommunications or software...
s should assess risks continually and develop plans to address them. The risk management plan contains an analysis of likely risks with both high and low impact, as well as mitigation strategies to help the project avoid being derailed should common problems arise. Risk management plans should be periodically reviewed by the project team in order to avoid having the analysis become stale and not reflective of actual potential project risks.
Most critically, risk management
Risk management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...
plans include a risk strategy. Broadly, there are four potential strategies, with numerous variations. Projects may choose to:
- Accept riskRiskRisk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
; simply take the chance that the negative impact will be incurred - Avoid risk; changing plans in order to prevent the problem from arising
- Mitigate risk; lessening its impact through intermediate steps
- Transfer risk; outsource risk to a capable third party that can manage the outcome
Risk management plans often include matrices.
See also
- Risk managementRisk managementRisk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...
- Project managementProject managementProject management is the discipline of planning, organizing, securing, and managing resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end , undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value...
- Project Management ProfessionalProject Management ProfessionalProject Management Professional is a credential offered by the Project Management Institute . , there were 393,413 active PMP certified individuals worldwide...
- Event chain methodologyEvent chain methodologyEvent chain methodology is an uncertainty modeling and schedule network analysis technique that is focused on identifying and managing events and event chains that affect project schedules...