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Definition: The risk management plan describes how risk identification, qualitative and quantitative analysis, response planning, monitoring, and control will be structured and performed during the project life cycle. The risk management plan does not address responses to individual risks—this is accomplished in the risk response plan. The risk management plan may include the following:
• Methodology. Defines the approaches, tools, and data sources that may be used to perform risk management on this project. Different types of assessments may be appropriate, depending upon the project stage, amount of information available, and flexibility remaining in risk management
• Roles and responsibilities. Defines the lead, support, and risk management team membership for each type of action in the risk management plan. Risk management teams organized outside of the project office may be able to perform more
independent, unbiased risk analyses of project than those from the sponsoring project team
• Budgeting. Establishes a budget for risk management for the project
• Timing. Defines how often the risk management process will be performed throughout the project life cycle. Results should be developed early enough to affect decisions. The decisions should be revisited periodically during project execution
• Scoring and interpretation. The scoring and interpretation methods appropriate for the type and timing of the qualitative
and quantitative risk analysis being performed. Methods and scoring must be determined in advance to ensure consistency
• Thresholds. The threshold criteria for risks that will be acted upon, by whom, and in what manner. The project owner, customer, or sponsor may have a different risk threshold. The acceptable threshold forms the target against which the project team will measure the effectiveness of the risk response plan execution
• Reporting formats. Describes the content and format of the risk response plan. Defines how the results of the risk management processes will be documented, analyzed, and communicated to the project team, internal and external stakeholders, sponsors, and others
• Tracking. Documents how all facets of risk activities will be recorded for the benefit of the current project, future needs, and lessons learned. Documents if and how risk processes will be audited.
Acceptance Level: Generally accepted
Alternative or Related Terms: Risk management, project planning
Application Areas/Intended Uses: The risk management plan is the output of the risk management planning process.
Chief Advantages: The risk management plan documents how the risk processes will be carried out during the project.
Additional Reading:
Balancing Project Risks and Opportunities. Kalle Kahkonen. PMI 2000 Seminars & Symposium Proceedings, Houston, Texas USA.
Contingency Planning as a Necessity. Jerry F. Heimann. PMI 2000 Seminars & Symposium Proceedings, Houston, Texas USA.
Contingency, Risk, and Ensuring Quality. Lary A. Mars. PM Network. December 2000, 56- 59.
Developing a Risk Management Matrix for Effective Project Planning—An Empirical Study.
Sumit Datta and S.K. Mukherjee. Project Management Journal, June 2001, 45-57.
How Risk Management Has Become a Way of Life in Project Management. Arley R.
Bedillion and Thomas H. Orr. PMI 1999 Seminars & Symposium Proceedings, Philadelphia, Pennsylvania USA. |
