07/02/2015
Risk Management.
------------------------
Purpose and Objectives of the Plan Risk Management Process
The objectives of the Plan Risk Management process are to develop the overall risk management strategy for the project, to decide how the risk management processes will be executed, and to integrate Project Risk
Management with all other project management activities.
Effective risk management requires creation of a risk management plan. This plan describes how the risk management processes should be carried out and how they fi t in with the other project management
processes. On a broader level, it describes the relationships among Project Risk Management, general project management, and the management processes in the rest of the organization.
To provide the greatest benefit, initial risk management planning should be carried out early in the overall planning of the project, and the
corresponding risk management activities integrated into the overall project management plan. The risk management plan may subsequently need to be adapted as the needs of the project and its stakeholders
become clearer or change.
Although the Project Risk Management processes form an integral part of the overall project management plan, a budget in terms of resources, cost, and time for the specifi c risk management activities should be
established in order to better track, control, and, as necessary, defend the corresponding expenditures throughout the project. The cost of treating the risks themselves should be included appropriately in the project
budget, while the risk management plan should describe how this part of the project budget is evaluated, allocated, and managed. The risk management plan will defi ne the monitoring methods to ensure that the
corresponding expenditures are tracked appropriately, as well as the conditions under which the approved budget for risk management can be modified.
In the same way that project management is a process of progressive elaboration, risk management activities need to be repeated throughout the project. The risk management plan should defi ne both the
normal frequency for repeating the processes as well as specifi c or exceptional conditions under which the corresponding actions should be initiated. The corresponding risk management activities should be integrated into the project management plan.
There are two categories of success criteria for risk management: those for success of the project in general, and those for success of Project Risk Management.
• Project-Related Criteria. To assess the success of Project Risk Management, the stakeholders must agree on an acceptable level of results for the project-related criteria (such as cost, time, and
scope). In order to ensure consistency and agreement among stakeholders, the risk management plan should present these objectives with reference to the project defi nition documents. To provide
guidance in risk management, particularly in prioritizing risk responses, stakeholders should also prioritize each project objective.
• Process-Related Criteria. The measures for success in Project Risk Management depend on a number of factors, such as the inherent level of uncertainty of the project. For example, the Project Risk Management process for a research project needs to address more unforeseen changes than for a project with a more predictable environment. A research Project Risk Management process may be considered a success even if it results in more variance from the baseline than would be
allowable for a successful process in a more predictable project.
