RISK MANAGEMENT PLAN

Project Title: Date Prepared:

Methodology

The technique for each process will be: 1) Engage

stakeholders with meetings and personal interviews to know
their tolerance and expectations. 2) Identify risks by using
assumptions and SWOT analysis. 3) Develop a probability
and impact matrix, plus risk categorization, as a first pass.
Then apply it to the risk data quality assesment and risk
urgency assesment. 4) Quantitative risk analysis will only be
done for top risks using Monte Carlo analyses. 5)
Appropriate strategies will be developed for threats and
opportunities. 6) A risk audit will be performed at regular
intervals, and reserve analysis review will be done every six
months.

Roles and Responsibilities

The risk owner will be for all risks (the same as the "risk
manager"). The project manager will be responsible for
coordination, while the project sponsor will manage all
external stakeholders.

Risk Categories
Risks will be organized as follows to the first level of the
RBS: 1) Strategic 2) Financial 3) Procedural 4) Other

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RISK MANAGEMENT PLAN
Risk Management Funding

Some experts should be hired for various periods with a

limited of budget (not exceeding $500,000 USD). All of the
risk jobs related to offshore civil works will be given to a third
party due to a lack of company experience

Contingency Protocols

All budget items should have a contigency amount of no less

then 10% of the variance if you are not enough confident of
the most likely figure estimate (the same for duration
estimates)

Frequency and Timing

Risk indentification will be performed during the preliminary

stage of the project; it will be repeated during scope changes
and during monitoring and controlling of risks.
Stakeholder Risk Tolerances

Scope: low Quality: low Schedule: medium Cost: low

Tracking and Auditing

Risk audit will be performed once per month, while risk

reassesment will be done for each change in the project
scope. A risk data quality assesment should be done after
the first turn of risk identification and before doing qualitative
risk analysis (but should also be done upon each special
issue).
Risk Register (Record 1)
Project Title: Date Prepared:

Risk ID 1 Risk Description If inverter manufacturer declares default, some deliveries will be not done according to the schedule, causing a delay of
2 weeks on contractual completion
Status open Risk Cause Manufacturer default

Impact
Score (*) Responses
Scope Quality Schedule Cost
Probability 20.00%
125,000 25000 Looking for some inverters available on the
market

Revised 10.00% Revised Impact Revised Score (*) Risk owner

Probability Actions
Scope Quality Schedule Cost
50,000 5000 Mr. Howard sign contract with new
supplier
Secondary Risks Customer missed approval during acceptance test

Residual Risk New supplier could deliver inverter that is not the same quality level

Contingency Plan Contingency Funds 50000

Hire an inverter installation expert Contingency Time 1 month

Fallback Plans Ask supplier to cross-check customer acceptance creteria to be prapared for product modification.

Comments We should verify the project economical company situation of our inverter supplier.
 Risk Register (Record 2)
Project Title: Date Prepared:

Risk ID 1 Risk Description If inverter manufacturer declares default, some deliveries will be not done according to the schedule, caus
2 weeks on the contractual completion
Status open Risk Cause Manufacturer default

Impact
Score (**) Responses
Scope Quality Schedule Cost
Probability high
medium 0.08 looking for some inverters
on the market
Example of numeric score Revised medium Revised Impact Revised Score (**) Risk owner
Probability
Scope Quality Schedule Cost
low 0.03 Mr. Howard

Example of relative score Secondary Risks customer missed approval during acceptance test

Residual Risk new supplier could deliver inverter of not the same quality level

(*) prob*impact Contingency Plan Contingency Funds

(**) you should find the relative hire an inverter installation expert Contingency Time

percent into the third tab both Fallback Plans ask supplier to cross check customer acceptance creteria to be prapared for product modification
probability and impact
Comments We should best verified , for new project economical company situation of our inverter supplier
according to the schedule, causing a delay of

Responses

looking for some inverters available

on the market
Risk owner
Actions

Mr. Howard sign contract with

new supplier

50,000

1 month
IMPACT ASSESSMENT
Element Rating Threats Opportunities
Scope impact Very high The product does not meet the objectives and Scope requirements met with significant
is effectively useless. decrease in effort and/or cost.
High The product is deficient in multiple essential Scope requirements met with noticeable improvement in effort
requirements. and/or cost.
Medium The product is deficient in one major requirement Scope requirements met with minimal improvement in effort
or multiple minor requirements. and/or cost.
Low The product is deficient in a few minor requirements. Insignificant impact.

Very Low Minimal deviation from requirements. Insignificant impact.

Quality impact Very high Performance is significantly below objectives Significant improvement in outcomes/
and is effectively useless. rework rate.
High Major aspects of performance do not meet Noticeable improvement in outcomes/rework rate.
requirements.
Medium At least one performance requirement is significantly Some reduction in rework rate.
deficient.
Low There is minor deviation in performance. Insignificant impact.

Very Low Minimal deviation in performance. Insignificant impact.

Schedule impact Very high Greater than 20% overall schedule increase. Greater than 20% overall schedule decrease.

High Between 10% and 20% overall schedule increase. Between 10% and 20% overall schedule.

Medium Between 5% and 10% overall schedule increase. Between 5% and 10% overall schedule decrease.

Low Noncritical paths have used all their float, or overall Noncritical paths have used all their float, or overall
schedule increase of 1% to 5%. schedule decrease of 1% to 5%.
Very Low Slippage on noncritical paths but float remains. No change on critical path duration.

Cost impact Very high Cost increase of greater than 20%. Cost decrease of greater than 20%.

High Cost increase of 10% to 20%. Cost decrease of 10% to 20%.

Medium Cost increase of 5% to 10%. Cost decrease of 5% to 10%.

Low Cost increase that requires use of all contingency funds. Cost decrease of <5%.

Very Low Cost increase that requires use of some contingency but some contingency funds remain. Insignificant impact.
PROBABILITY ASSESSMENT
Probability Very high The event will most likely occur: 80% or The event will most likely occur: 80% or
greater probability. greater probability.
High The event will probably occur: 61% to 80% probability. The event will probably occur: 61% to 80% probability.

Medium The event is likely to occur: 41% to 60% probability. The event is likely to occur: 41% to 60% probability.

Low The event may occur: 21% to 40% probability The event may occur: 21% to 40% probability.

Very Low The event is unlikely to occur: 1% to 20%
RATING ASSESSMENT
Rating Threats
High Any event with a probability of medium or above and a very high impact on any objective.
Any event with a probability of high or above and a high impact on any objective.
Any event with a probability of very high and a medium impact on any objective.
Any event that scores a medium on more than two objectives.
Medium Any event with a probability of very low and a high or above impact on any objective.
Any event with a probability of low and a medium or above impact on any objective.
Any event with a probability of medium and a low to high impact on any objective.
Any event with a probability of high and a very low to medium impact on any objective.
Any event with a probability of very high and a low or very low impact on any objective.
Any event with a probability of very low and a medium impact on more than two objectives.
Low Any event with a probability of medium and a very low impact on any objective.
Any event with a probability of low and a low or very low impact on any objective.
Any event with a probability of very low and a medium or less impact on any objective
The event is unlikely to occur: 1% to 20%.
Opportunities
Any event with a probability of medium or above and a very high impact on any objective.
Any event with a probability of high or above and a high impact on any objective.
Any event with a probability of very high and a medium impact on any objective.
Any event that scores a medium on more than two objectives.
Any event with a probability of very low and a high or above impact on any objective.
Any event with a probability of low and a medium or above impact on any objective.
Any event with a probability of medium and a low to high impact on any objective.
Any event with a probability of high and a very low to medium impact on any objective.
Any event with a probability of very high and a low or very low impact on any objective.
Any event with a probability of very low and a medium impact on more than two objectives.
Any event with a probability of medium and a very low impact on any objective.
Any event with a probability of low and a low or very low impact on any objective.
Any event with a probability of very low and a medium or less impact on any objective.
 PROBABILITY & IMPACT MATRIX
The Probability and Impact Matrix is a grid for mapping the probability of each risk
occurrence and its impact on project objectives if that risk occurs. The Probability and
Impact Assessment determines the probability and impact of the risk. It may be
constructed for threats and opportunities. This matrix provides a helpful way to view
the various risks on the project and prioritize them for responses. It also provides an
overview of the amount of risk on the project. The project team can get an idea of the
overall project risk by seeing the number of risks in each square of the matrix.

The organizations overall risk tolerance is usually indicated by the shading or range of cells
within the matrix. For example, an organization with a low risk threshold may rank events that
fall in the very high or high range for both impact and probability as high risk. An organization
with a higher risk threshold may only rank risk with a very high probability and impact as high
risk.

The organization may use the relative risk rankings to specify what type of risk
response should be taken.

For example, the organization may specify an avoidance strategy for all threats that are
ranked as high risks.

A project with many risks in the dark gray zone will need more contingency to absorb the risk,
and likely more time and budget to develop and implement risk responses. In some situations,
a decision is made not to pursue a project because there is more risk than the organization is
willing to absorb.

A sample Probability & Impact Matrix follows. The needs of your project will determine the
exact layout of the matrix.

The Probability & Impact Matrix can receive information from:

• Probability and Impact Risk Assessment
• Risk Register
It provides information to the Risk Register.
 PROBABILITY & IMPACT MATRIX

Very High
High
Medium
Low
Very Low

Very Low Low Medium High Very High

Risk ID Status Risk Description
Risk Cause Probability Impact

Scope Quality Schedule Cost

Score (*) Responses Revised Probability Revised Impac

Scope Quality
evised Impact Revised Score (*) Risk owner Actions

Schedule Cost
Secondary Risks Residual Risk Contingency Plan

Overall Contingency Budget

Contingency Funds Contingency Time Fallback Plans

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Comments