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Risk Management Strategies- Project Management Resources

Risk Management Strategies- Project Management Resources

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Published by techobirdie
Strategies for Risk Response Planning
Strategies for Risk Response Planning

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Published by: techobirdie on Oct 20, 2009
Copyright:Attribution Non-commercial


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Strategies for Risk Response Planning:
(Project Management Resources: http://www.shamsherhaider.com
You’ve made your risk management plan, identified the risks and done quantitative analysis and
qualitative risk analysis. Now how do you do your risk response planning?For risk response planning you must have your risk register and your risk management plan athand. You would be more interested in planning for high risks first of all and risk management
plan comes handy for the situation because it has the threshold definitions for
risks. Risk register, the most important artifact in risk management process contains the listof identified risks ranked and prioritized after qualitative and quantitative risk analysis.The risk register will tell whether the risk under consideration is a threat or an opportunity. Yes arisk can be an opportunity as well! As defined by PMI
 project risk is an uncertain event or condition that, if it occurs, has a
or a
effect on at least one project objective, suchas time, cost, scope, or quality.
The strategy for managing the risk under consideration will largelydepend on its being a threat or an opportunity.
Strategies for Threats:
This means staying clear of the risk altogether. While avoidance obviously is the bestpossible course, it might not be feasible in all circumstances, e.g. the impact of the cost of avoidance might dominate the benefits of avoiding the risk. Avoidance can be accomplished bychanging the process or the resources to attain an objective or sometimes modifying the objectiveitself to avoid the risks involved. An example of avoiding risk could be avoiding use of untestedthird party components in the software design, or avoiding inclusion of an inexperiencedresource in the project team.
This means trying to reduce the probability and/or impact of the risk. Reduction inprobability of occurrence would reduce the likelihood of its occurrence and reduction in impactwould imply a lesser loss if the risk event occurs. 100% mitigation would be equivalent toavoidance. An example of mitigation would be an early verification of the requirements byprototyping before moving on to full fledged development.
This implies transferring the liability of risk to a third party. While this strategy doesnot eliminate or mitigate the risk or its consequences itself, it transfers the responsibility of itsmanagement to someone else. Insurance is a classical example of this strategy. By buyinginsurance you transfer your risk to the insurance company by paying the risk premium. FixedCost contract is yet another example of risk transfer strategy. In a fixed cost contract the risk istransferred to the seller.

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