Apa style
Running head: RISK MANAGEMENT PLAN 1
Risk Management Plan
Name
Institution
SCOPE
This risk management plan illustrates how risk management will be organized and carried out on the project to make sure risks are dealt with and controlled at acceptable levels. Risks in this project can be cannot be totally eradicated (Assessment, 2016).
| Tasks | Costs ($) | Starting date (2017) | End date (2017) |
| Risk identification | 10,000 | August/ 1 | August/31 |
| Risk assessment | 15000 | September/1 | September/30 |
| Risk register | 5000 | October/1 | October/ 30 |
| Risk analysis | 20000 | November/1 | November/14 |
| Risk response planning | 5000 | November/15 | November/30 |
| Mitigation actions to consider | 5000 | December/ 1 | December/14 |
| Risk related to time, cost or scope | 5000 | December/ 15 | December/ 31 |
| Risk monitoring control | 25000 | January/1/018 | January/14/ 018 |
| Total | 90000 | January/ 15/018 | January/31 |
Deliverables
Risk Identification
Analyzing the underlying causes of a risk
Assign a probability of occurrence to every lowest level causes, and calculate the possibility of every next higher risk by continuing up the tree until the highest probability is calculated.
Identify the possible loss
Enter the Prob(UO) and Loss(UO) values on the Risk Log.
Sort the spreadsheet by descending order of Risk Exposure.
Risk mitigation
OBJECTIVES
To minimize the effect of unplanned incidents on the project by identifying as well as addressing possible risks before substantial negative results occur.
The risk assessment is to become a subset of the Project Management Plan.
To identify all activities based on the following five procedures to make sure they suit the functions in question
PROJECT SIZE
Risk Reviews and Reporting
Probability and Impacts of the Risk Management Plan
The size of the project team 11 people
The project will elapse after 6 months
Variation in the timeframe to be tolerated-schedule is flexible
Problem is easily understood and solution is readily attainable
Total cost of the project less than $100,000
Level of change to be implemented-impacts many business units
RISK TOOLS AND TECHNIQUES
Qualitative Risk Analysis
After possible risks have been detected and developed, the next phase is to assess them. This can be quite challenging if there are many risks (Assessment, 2016). Hence the first step is to filter the risks in order to determine which are the potential risks and which are important.
Qualitative risk techniques include the following:
The green-light or red-light rating is a subjective evaluation of whether risk will have key impact on the project. The risks are then divided into 3 groups, one is “green”, one is “yellow’ and finally one is “red.” The threshold for these classes can be predicated on the possibility of occurrence, the quality of impact, the time impact, the cost impact or the mixture of these (Assessment, 2016). Usually, red risks are the ones that are likely to happen and will substantially impact one of the objectives of the project. These risks should be addressed, normally with immediate change to the plan of the project. The green risks are the ones that either are trivial or they are risks that at some point were yellow or red and have been alleviated (Broekx, Smets, Liekens, Bulckaen & De Nocker, 2011).
The next technique for qualitative risk is risk matrix. This can be set up as a 5x5, a 4x4, a 3x3, a 2x2, however the size of this project is 3x3. The vertical side of the matrix is denoted possibility, while the horizontal side is project impact (Cloete, 2009). The scale on the matrix goes from low to high on every side. How high or low are described are based on major objectives of the project. After the matrix has been created, each risk identified is placed on a post-note then locate the risk in the proper spot on matrix based on the possibility of that risk occurring on this project objective if it occurs (Cloete, 2009).
The risks in the upper right corner are the main risks that must be addressed in project planning. The risks in the lower left corner are minor risks which can be ignored.
The final technique is an urgency assessment. This analyses if the project risk should be managed. Some risks don’t have the possibility of occurring till late in the project and vice versa. The urgency assessment helps to identify anything that is an immediate issue for the project team and which risk issues are not yet in play (Broekx, et al.,2011).
Quantitative Risk Analysis
Quantitative risk techniques attempts to measure the impact of the project. These techniques are usually much more multifaceted as compared to the qualitative techniques and thus need much more effort and time to complete. Quantitative analysis will give me guidance such that when I meet with stakeholders we can concentrate on our argument around the business impact of doing nil than doing something (Stephenson, 2001). The techniques are as follows:
Sensitivity Analysis - the project plan is established without considering the risk factor taking place and then the risk factor is presented and the plan is recreated with the impact of risk in place. This offers a demo to the participants of why the risk is significant and requires to be addressed.
Failure Mode Impact Analysis - this technique is exceptional for addressing quality or technical risks. It isn’t very operational for addressing schedule or cost risks. Though, because the risk is measured based on security and safety issues, it can be valuable for explaining the reason a change in project necessities is needed (Stephenson, 2001).
Decision Tree with Anticipated Financial Value - this technique can demand a substantial amount of time to create, however, once created it can effortlessly be reprocessed as project expectations start shifting and the project is enforced to respond to the changing situations (Stephenson, 2001). The decision tree indicates the effect of decisions as well as risk events on project actions and the expected monetary value measures those effects.
RISK REVIEWS AND REPORTING
Continuous controlling and reviews of the project risks helps to ensure that the risk response plan and the risk treatment action strategy are executed and progressed efficiently. This risk review included regular agenda of the project management meetings and used at many milestones and phases of the project. This risk review will help to facilitate proper change and continuous improvement. The procedure of reviewing and reporting include risk audits and reserve analysis. The risk watch list will review the criteria to review performance of work data, comprising deliverables status, expenses incurred as well as project schedule progress.
Communicating with project shareholders by means of risk reports is a critical driving force that helps to undertake suitable risk management and attain project results according to anticipations. Risk reporting assist the project manager, owner of the project, as well as customer to understand prevailing opportunities, risks as well as trade-offs (Cloete, 2009). The purpose of risk reporting is to make sure all parties are knowledgeable of prevailing risks evading disagreeable astonishments and illegal actions. The project manager as well as the project team and the risk owner will create reports and connect with the stakeholders to maintain the constancy of fundamental assumptions and risk management actions (Cloete, 2009).
PROBABILITY AND IMPACTS
The probability assigned on the project is 0.25. This is due to the following impacts: a preview of the risks will be simple and easier to establish their impact and economical plans to solve them. The impact helps to assess each risk for the possibility of its happening and the consequence or cost of the possible loss related with it (Cloete, 2009). The impact helps to analyze priorities of risks that evaluating severity of risks, that is knowing what should be prioritized as unacceptable risks that require to be treated. The possibility also shows some of the costs involved as well the advantages of the treatment and the success of the project.
RISK THRESHOLDS
Risk threshold is lower or upper limit depending on what context it is used in. it can as well define the limit of an acceptable expenditure or cost in project. For this project, $10,000 cost overrun is acceptable to the firm and therefore anything more is not acceptable. This means that project will not tolerate any other risk. I will set the threshold of $10,000, I will hold interviews and carry out meetings with stakeholders to find their risk appetite, then assess their risk tolerance and finally settled on risk threshold.
References
Assessment, R. (2016). Risk Management Plan. Hertfordshire STEPS, ISL Hertfordshire County Council.
Broekx, S., Smets, S., Liekens, I., Bulckaen, D., & De Nocker, L. (2011). Designing a long-term flood risk management plan for the Scheldt estuary using a risk-based approach. Natural hazards, 57(2), 245-266.
Cloete, K. (2009). Risk Management Plan.
Stephenson, G. R. (2001). Risk Management Plan (No. DOE/NV--781). Bechtel Nevada Corporation (US).
