11 Risk Management SLIDES

11.1 Plan Risk Management

Plan Risk Management -  The process of defining how to conduct risk management activities for a project.   +PMBOK (Page 401)  

Plan Risk Management is the process of defining how to conduct risk management activities for a project. The key benefit of this process is that it ensures that the degree, type, and visibility of risk management are proportionate to both risks and the importance of the project to the organization and other stakeholders. This process is performed once or at predefined points in the project. The inputs, tools and techniques, and outputs of the process are depicted in Figure 11-2. Figure 11-3 depicts the data flow diagram for the process.

Plan Risk Management Process

11 2 (binary/octet-stream)

Caption: : Plan Risk Management: Inputs, Tools & Techniques, and Outputs

The project charter documents the high-level project description and boundaries, high-level requirements, and risks. In planning Project Risk Management, all approved subsidiary management plans should be taken into consideration in order to make the risk management plan consistent with them. The methodology outlined in other project management plan components might influence the Plan Risk Management process. Project documents that can be considered as inputs for this process include but are not limited to the stakeholder register as described in Section 13.1.3.1. The stakeholder register contains details of the project’s stakeholders and provides an overview of their project roles and their attitude toward risk on this project. This is useful in determining roles and responsibilities for managing risk on the project, as well as setting risk thresholds for the project. The enterprise environmental factors that can influence the Plan Risk Management process include but are not limited to overall risk thresholds set by the organization or key stakeholders

Inputs

The organizational process assets that can influence the Plan Risk Management process include but are not limited to: Organizational risk policy; Risk categories, possibly organized into a risk breakdown structure; Common definitions of risk concepts and terms; Risk statement formats; Templates for the risk management plan, risk register, and risk report; Roles and responsibilities; Authority levels for decision making; and Lessons learned repository from previous similar projects.

Inputs

Tools and Techniques

Expertise should be considered from individuals or groups with specialized knowledge or training in the following topics: Familiarity with the organization’s approach to managing risk, including enterprise risk management where this is performed; Tailoring risk management to the specific needs of a project; and Types of risk that are likely to be encountered on projects in the same area. Data analysis techniques that can be used for this process includes but are not limited to a stakeholder analysis to determine the risk appetite of project stakeholders. The risk management plan may be developed as part of the project kick-off meeting or a specific planning meeting may be held. Attendees may include the project manager, selected project team members, key stakeholders, or team members who are responsible to manage the risk management process on the project.

Outputs

The risk management plan may be developed as part of the project kick-off meeting or a specific planning meeting may be held. Attendees may include the project manager, selected project team members, key stakeholders, or team members who are responsible to manage the risk management process on the project. Risk strategy. Describes the general approach to managing risk on this project. Methodology. Defines the specific approaches, tools, and data sources that will be used to perform risk management on the project. Roles and responsibilities. Defines the lead, support, and risk management team members for each type of activity described in the risk management plan, and clarifies their responsibilities. Funding. Identifies the funds needed to perform activities related to Project Risk Management. Establishes protocols for the application of contingency and management reserves. Timing. Defines when and how often the Project Risk Management processes will be performed throughout the project life cycle, and establishes risk management activities for inclusion into the project schedule. Risk categories. Provide a means for grouping individual project risks. A common way to structure risk categories is with a risk breakdown structure (RBS), which is a hierarchical representation of potential sources of risk (see example in Figure 11-4). An RBS helps the project team consider the full range of sources from which individual project risks may arise. This can be useful when identifying risks or when categorizing identified risks. The organization may have a generic RBS to be used for all projects, or there may be several RBS frameworks for different types of projects, or the project may develop a tailored RBS. Where an RBS is not used, an organization may use a custom risk categorization framework, which may take the form of a simple list of categories or a structure based on project objectives.