Risk Management

A risk is “any uncertain event or condition that might affect your project (Watt, 2014, p.176). A Risk Management Plan (RMP) helps mitigate the occurrence and impact of risks by identifying and assessing potential risks early, and establishing how to address them should they arise. This is critical, especially for projects introducing new technology, as they have “a high-complexity rating and a correspondingly high risk” (Watt, 2014, p.179). An RMP cannot avert all risks, but it may help minimize unexpected and potentially-damaging conditions or events.

To create your RMP, ask the project’s stakeholders and key team members to identify potential risks or concerns related to all aspects of the project, including the technology, budget, materials, people, quality, suppliers, legislation, and requirements. Include any uncertain opportunities which may arise, such as discovering an easier method or lower costs. Focus on risks that are most likely to happen and have the greatest potential impact. Estimate the cost range, from best- to worst-case scenarios, for addressing the risks and add them to your budget estimate as a contingency. Determine a risk response plan, including monitoring procedures.

Review your RMP regularly throughout your project to continually identify, evaluate, manage, and monitor potential and occurring risks.

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Risk Management tool