 Example of a Risk Management Plan

 How do you Plan your Risk Management?

 Example Risk Management Matrix
 Risk Management in Action
 This post is part of the series: Risk Management Plan - A Working Example

Example of a Risk Management Plan

There are many approaches to project risk management planning, but essentially the risk
management plan identifies the risks that can be defined at any stage of the project life cycle.
The risk management plan evaluates identified risks and outlines mitigation actions. A risk
management plan should be periodically updated and expanded throughout the life cycle of
the project, as the project increases in complexity and risks become more defined. This article
will walk you through a risk management plan example so you better understand how to use

this important tool. [caption id=“attachment_132792” align=“aligncenter” width=“640”]

Don’t ignore risk![/caption] Risk management ideally takes a project throughout the phases
of risk identification, risk assessment and risk resolution. With the advancement in project
management studies and techniques, risk management has taken a main place in the project
life cycle; in most cases at the outset of the project itself.

How do you Plan your Risk Management?

The risk management plan should be a part of your overall project plan. The risk plan for
smaller projects can be as simple as a risk management matrix. Complex projects require
more thorough risk analysis and planning. For each risk outlined in the risk matrix you will
want to create a thorough analysis for each. The main goal of creating the risk matrix is to
prioritize your risks. You will never be able to eliminate all risk, but you can prioritize and
document risks to attempt to mitigate or eliminate them. The risk management matrix will
document the following items: 1. Risk and Consequences - Brainstorm risks before you
beginning your project and continue adding to your risk management plan as the project
moves throughout it’s life-cycle. What risks can be associated with this project? Will the
risks affect the schedule, resourcing or budget? 2. Probability - the table should contain a
probability of the risk occurring. This can be a percentage or a number. 3. Impact - what is
the impact to the project if the risk should occur? Build a scale appropriate for the project -
smaller projects can use a simple impact of 1-5 (minimal to major) whereas larger projects
may want a more formal scale. 4. Priority - (Probability * Impact) will give you an idea of
the priority of the risk. Higher priority items should be mitigated and planned for before
lower priority items. 5. Mitigation Response - a brief overview of mitigation steps to
eliminate or reduce the risk.

Example Risk Management Matrix

Start by building a six column table. The columns will be named after each of the five items
in the previous section. The first column can simply be an ID column.

1. ID
2. Risks and Consequences
 3. Probability
4. Impact
5. Priority
6. Mitigation Response

See the below table for an example risk management plan.

Risk Management in Action

Once you have your risk management plan outlined, you can start adding tasks to your
project plan for helping mitigate or eliminate risk. In the example above, we can add tasks to
our project plan for hiring an additional gardener and looking for a new subcontractor in case
the current one doesn’t work out. Project Risk Management, with the help of the above
mentioned factors and documents, depends primarily on the three major steps of Risk
Identification, Risk Assessment and Risk Resolution. It is a sequential process which
involves assessing and classifying risks using the PI-Matrix and the Decision Making
Tree system. Risk Management is an integral part of a project and is an ongoing process.
When initiated at the beginning of a project, most risks may be identified and controlled or
measures put in place to counter act them. Be sure to consider how you may need to utilize
Change Management or Project Disaster Recovery to keep your project on task. Image
by Wokandapix from Pixabay

This post is part of the series: Risk Management Plan - A

Working Example
This series discusses how to create a risk management plan and provides a working example.

1. Risk Management Plan: Example

2. Effective Steps in a Risk Management Plan
3. How Do You Manage Project Risk? A Look at Various Approaches

 PROJECT MANAGEMENT

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