4/10/2017 RiskManagement|Guidetomanagingrisk

Riskmanagement|Guidetomanagingrisk
Effectiveriskmanagementreliesonuptodateinformation,effectivedecisionmakingsupportedbyanalysis
andevaluation,agreedrisktolerancesandclearmonitoringprocesses(PRINCE2,2002,p239).

TheseguidelinesgiveanoverviewofriskmanagementdrawingonbestpracticefromPRINCE2,MSPandAPMP.These
arestandardproceduresthatallprojectmanagers(/prince2/prince2glossaryPperformance.html#project
manager1)shouldfollowtoidentify,analyse,mitigate,monitorandcontrolriskontheirprojects.

|TheRiskManagementPlan|TheRiskManagementProcess|RiskCategories|ExampleRiskRegister

Riskcanbedefinedasuncertaintyofoutcomewhetherpositiveornegative.Thecontrolandcontainmentofriskiscriticaltoproject
successanditisthetaskofriskmanagementtomanageaproject'sexposuretorisk.(PRINCE2,2002,p239).

TheRiskManagementPlan
TheRiskManagementPlansupportsriskmanagement.Itsetsouttheorganisation'sriskmanagementpolicy(/risk/riskmanagement
glossary.html#riskmanagementpolicy),rolesandresponsbilitiesformanagingrisk,anybudgetaryconsiderationsandthetools,techniquesand
templatesthatmustbeused.

Thecontentsvariesbetweenorganisations,butshouldaddressthefollowingareas:
RiskStrategythehighlevelapproachtoriskmanagement,theprocessesandproceduresformanagingriskandtheorganisation'srisk
toleranceorappetiteforacertainlevelofrisk.Forexampleriskofbudgetoverrunsmaybemoreacceptablethandeliverydelays.Somerisk
areasmayhavemuchlowertolerancesthanothers,forexampletheriskofnotmeetingDDAguidelinesmayhaveverylowtolerancefora
governmentwebsite.
Organisationanyrolesandresponsibilitiesassociatedwithmanagingrisk.TheProjectManagerwillhavemainresponsibility,buttheremaybe
otherresponsibilitiesperhapsfortheprojectofficeorspecialistriskconsultantsforexampleanAsbestosConsultantonaconstructionproject.
RiskBudgetsthemoneyandresourcethatwillbesetasidetomanagerisk.
Toolsandtechniquesthetechniquesthatwillbeusedtomanagerisk.
RiskManagementTemplatesthetemplatesthatshouldbeusede.g.arisklogtemplate.
ListadaptedfromTheProjectsGroupPLC,2006,RiskManagementOverview.

Theplanshouldformpartoftheprojectandprogrammegovernanceproceduresandshouldbeusedthroughouttheorganisationasaguidefor
managingrisk.

TheRiskManagementProcess
Theriskmanagementprocessstartswithidentificationofrisks(/risk/riskidentification.html),analysisoftheimpactandprobabilityofthoserisks(risk
assessment(/risk/riskassessment.html)),selectionofsuitableresponses(/risk/riskresponses.html),planningresponsesandmonitoringand
controllingtheprocess.TheOGC(/ogcofficegovernmentcommerce.html)'sriskmanagementprocessisdefinedinManagingSuccessfulProjects
withPRINCE2.Figure1illustratesthePRINCE2riskmanagementprocess.

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4/10/2017 RiskManagement|Guidetomanagingrisk

Riskswillbeidentifiedthroughouttheprojectlifecycle.However,therearekeypointswhenrisksshouldbeidentified:
duringthestartupphaseoftheprojectwhentheprojectbriefisdeveloped,
duringinitiationwhenthebusinesscase(/projectmanagement/businesscase.html)isrefined,
duringprojectplanning,
attheendofeachprojectstage,
aspartofissuemanagementandescalation,
attheacceptanceandauthorisationofaworkpackage.
Riskscanbeidentifiedusingavarietyoftechniquesincludingbrainstorming,checklistsgeneratedfrompreviousprojects,assumptionsanalysis,
promptlistsofrisktypes/sources,SWOTanalysisandinterviews.PRINCE2andManagingSuccessfulProgrammes(MSP)identifyseveralcategories
ofriskthatareausefulstartingpointforriskidentification.

Riskcategories
PRINCE2 MSP
Strategic/commercial
Economic/financial/market
Strategic
Legalandregulatory
Programme
Organisational/management/humanfactors
Project
Political
Operational
Environmental
Technical/operational/infrastructure

Onceidentifiedtherisksshouldbeloggedontheprojectrisklog.Therearevaryingapproachestorisklogcontents,butgenerallyriskslogsshould
contain:
1.RiskIDanumberorreferenceuniquelyidentifyingtherisk.
2.Riskdescriptionadescriptionoftheriskincludingcauseandeffect.
3.Identificationdatethedatetheriskwasidentified.
4.Riskownerthepersonresponsibleformanagingtherisktoclose.
5.Probability/likelihoodthepredictedlikelihoodthattheriskwillberealised.Thisiseitherexpressedasanumberoronascalesuchas
high/medium/low.
6.Impactthepredictedimpacttheriskcouldhaveontheprojectifitisrealised.Thisiseitherexpressedasanumberoronascalesuchas
high/medium/low.
7.RiskStatuswhethertheriskisopenorclosed
8.Mitigatingandcontingentactionstheactionsthatwillbetakentorespondtotheriskincludingwhatactionwillbetakeniftheriskdoesoccur.

ExampleRiskRegister
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Downloadafullexampleoftherisklog(ExampleRiskLog.doc)snapshotshownabove.

DownloadafreerisklogtemplateinExcel(/projecttemplates/RiskLog.xls).DownloadtheriskloginWord(/projecttemplates/RiskLog.doc)

TherisklogisakeycontroldocumentfortheProjectManagerandshouldbecheckedandifnecessaryupdatedonadailybasis.Asthelogisupdated
itshouldbecheckedagainsttheagreedrisktolerancesandanyriskfallingoutsideofthetoleranceshouldbeescalatedtotheprojectboard.Where
theprojectispartofaprogrammetherisklogshouldbecheckedforrisksthatmayimpactontheprogrammeandthoserisksshouldalsobe
escalated.Ateachsignoffstagetherisklogwillbeakeycontroldocumentandatprojectcloseitfeedsintothepostprojectreviewandlessons
learnedreporting.

Theresponse(s)toagivenriskshouldreflecttherisktype,criticalityandtheorganisation'sattitudetorisk.Thereareanumberofpossibleresponses
torisksandasriskscanbethreatsoropportunitiestheseincluderesponsesthataresuitableforpotentialopportunities.ReviewalistofRisk
Responses(riskresponses.html).

ReadmoreonRiskManagement:
RiskAssessment(/risk/riskassessment.html)
BusinessRisk(/risk/businessrisk.html)
ConstructionRiskManagement(/risk/riskmanagementconstruction.html)
RiskManagementGlossary(/risk/riskmanagementglossary.html)
RiskIdentification(/risk/riskidentification.html)
NHSRiskRegister(/risk/nhsriskregister.html)
RiskRegistertemplate(/risk/riskregister.html)
RiskManagementReport(/risk/riskmanagementreport.html)
RiskResponses(/risk/riskresponses.html)
Prince2RiskRegister(/projecttemplates/prince2riskregister.html)
Prince2RiskManagementStrategy(/projecttemplates/prince2riskmanagementstrategy.html)

RiskManagementGuidelinesreferences
OfficeofGovernmentCommerce(2002),ManagingSuccessfulProjectswithPRINCE2:2009Edition
(https://www.amazon.co.uk/gp/product/0113310595/ref=as_li_tl?
ie=UTF8&camp=1634&creative=6738&creativeASIN=0113310595&linkCode=as2&tag=stakeholderma21&linkId=YNZUB4VKL4DY55CT),London:
TSO.

TheProjectsGroupPLC,2006,RiskManagementOverview,Sutton:TheProjectsGroupplc.availablefrom
https://www.tpgacademy.com/uk/Online/courses/apmp_en_v4/risk_management/planb.html[accessed09September2007].

(https://www.stakeholdermap.com/projecttemplates/ms

projecttemplates.html?utm_source=OldEmbedlyProjects&utm_medium=click&utm_campaign=MsProjectTemp)

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