Update Your Risk Plan Throughout the Project

Risk management is one of the key project management processes performed in the initial project planning. The risk management process includes the following steps: 1. Create a Risk Management Plan: Start the risk management process by understanding your overall approach for managing risks. This includes defining your risk management process, who is involved with the risk management process, what tools will be used, etc. 2. Identify all potential risks: When you are defining the project, perform a complete assessment of project risk. The risk assessment is done in two parts. First, look at inherent risks. Inherent risks are based on the characteristics of the project—regardless of the specific deliverables being produced. Second, look for risks that are specific to your project. These risks normally can’t be identified on a checklist since they are specific to your project and may not apply to other projects. At this point, you are not looking for only highlevel risks—you are trying to identify potential risks. 3. Analyze the risks using qualitative techniques: In the prior step, you identified all potential risks. However, not all of the risks need to be managed. Now you analyze the risks to see which ones are important enough to manage. Qualitative analysis means that you use subjective criteria to decide which risks are high, medium, and low based on the probability of occurrence and the impact to your project. 4. (Optional) Utilize quantitative analysis for all high-level risks: If your project requires more rigor and a numerical understanding of the nature of risks, you can proceed to qualitative analysis. The term quantitative means that the risk levels are based on a numerical analysis rather than on approximations such as low, medium, and high. 5. Create a response plan for each high-level risk: Create a response plan for each high-level risk that you identified to ensure the risk is managed successfully. There are five major responses to a risk: leave it, monitor it, avoid it, move it to a third party, or mitigate it. You can also create a contingency plan for high-level risks that describes what you would do if the risk event actually occurs. (This is also called “Plan B.”) 6. Move the activities associated with the risk response plans to the project schedule: Moving the activities to the schedule helps ensure that the risk plan is actually completed.