Effective Risk Management Plan
Every project is associated with various risks in the form of disputes, disasters, budget or unwanted challenges. And I believe, if you are in charge of the project but you don’t know the risk, be assured, you are not knowing the plan!
Risk is something that is inevitable in any kind of work that you undertake. Irrespective of your area of work or degree of engagement, you must have a dedicated risk management plan to ensure that you come out of any possible crisis situations effortlessly.
In my previous post, I talked about some of the effective ways of managing the project. Read on now to understand my take on how to prepare your project risk management plan.
Risk Potential Identification List: You should be able to identify the risks associated with every stage of the project. Prepare a chart having columns as Stage, Risk, Reason, Potential/Impact and Stakeholder involved. Scan all the dimensions of the project stages and chalk out the most probable risk factors. By this, you will be able to identify which risk factor is going to have much impact on the project and which stakeholder will be able to mitigate that.
Risk Elimination or Reduction Plan: If you know there is a risk, then better identify a way to mitigate the risk. That’s the ultimate mantra. Your next sheet should be of plans by which you can avoid the project to be prone to any sort of risk. Now as you have identified the risks, try to chalk out plans to eliminate their occurrence in a tabular format.
Prepare a Response Checklist: Alright, so you have identified the risk, you know how to mitigate them, but how about informing about it to all relevant stakeholders? Imagine, what happens when your project sponsor is not aware of a risk that can incur some extra cost. Or your QA team is unaware of how to deal with a security risk that has popped up due to new patch installation. Now as you are knowing as which risk is associated with which stakeholder, prepare a Do’s and Don’ts checklist which can guide them to handle the risk better.
Formulate an Emergency Contingency Planner: Your idea about the risk can show you the damage it can bring. Based on this prepare a chart of contingencies that can help you to tackle the challenge. Just to share one of my experience, I was leading a call center CRM application project which was hosted on the cloud. It was built to cater to around 10K calls. That’s the estimate that we did and paid the cloud service provider accordingly. However, when we were evaluating the possible risk, we realized that the call volume might shoot up during thanksgiving sale or any other festive period. Since the cloud provides the option of auto-scaling, it might come up with an additional cost that we had not considered. That risk assumption helped us to prepare an additional budget to handle this risk.
Prepare a priority list: Risks need be to categorized based on the severity or degree of impact that it can cause. Preparing a priority list is very important. Once you identify the risk, put them in buckets like High, Medium and Low priority and decide the degree of attention it needs based on that categorization.
Plan a method of communication: The most vital part is to communicate your risk management plan with the entire project team so that they can do their part at the time of crisis. Plan a method of communication and circulate your plan to everyone involved in the project, including the vendors and agents.
To wrap it up, your Risk Management Plan is the most integral part of crisis planning which reinforces your Project Planning against various threats and challenges. A full proof risk management helps you to deliver a successful project.
