PMP Project Management Professional Study Guide, Third Edition (Certification Press)

Through planning meetings, the risk management plan is created. Risk management plan templates, performing organization policies, and the risk tolerance level of the stakeholders aid the creation of the risk management plan. Attendees should include:

• The project manager

• Project team leaders

• Key stakeholders

• Personnel specific to risk management

• Any other persons with authority or needed input to the risk management processes

Examining the Risk Management Plan

The risk management plan does not detail the planned responses to individual risks within the project—this is the purpose of the risk response plan. The risk management plan is responsible for determining:

• How risks will be identified

• How quantitative analysis will be completed

• How qualitative analysis will be completed

• How risk response planning will happen

• How risks will be monitored

• How ongoing risk management activities will happen throughout the project life cycle

Methodology

The methodology is concerned with how the risk management processes will take place. The methodology asks:

• What tools are available to use for risk management?

• What approaches are acceptable within the performing organization?

• What data sources can be accessed and used for risk management?

• What approach is best for the project type, the phase of the project, and which is most appropriate given the conditions of the project?

• How much flexibility is available for the project given the conditions, the timeframe, and the project budget?

Roles and Responsibilities

The roles and responsibilities identify the groups and individuals that will participate in the leadership and support for each of the risk management activities within the project plan. In some instances, risk management teams outside of the project team may have a more realistic, unbiased approach to the risk identification, impact, and overall risk management needs than the actual project team.

Budgeting

Based on the size, impact, and priority of the project, a budget may need to be established for the project’s risk management activities. A project with high priority and no budget allotment for risk management activities may face uncertain times ahead. A realistic dollar amount is needed for risk management activities if the project is to be successful.

Scheduling

The risk management process needs a schedule to determine how often and when risk management activities should happen throughout the project. If risk management happens too late in the project, then the project could be delayed because of the time needed to identify, assess, and respond to the risks. A realistic schedule should be developed early in the project to accommodate risks, risk analysis, and risk reaction.

Risk Analysis Scoring

Prior to beginning quantitative and qualitative analysis, a clearly defined scoring system and interpretation of the scoring system must be in place. Altering the scoring process during risk analysis—or from analysis to analysis—can skew the seriousness of a risk, its impact, and the effect of the risk on the project. The project manager and the project team must have clearly defined scores that will be applied to the analysis to ensure consistency throughout the project.

Thresholds

Thresholds are preset factors to show when the project conditions cross an action or when a response is required. Like the risks analysis scoring, threshold determination will need to be determined as soon as possible within the project plan to avoid delays. The project team’s ideal threshold may differ from the customer’s. Establishing a preset value prior to the project implementation will save time, frustration, and additional costs and delays.

Reporting Formats

The reporting format requirements determine the type, detail, and requirements of the risk response plan. This plan is concerned with how the outputs of the risk management processes will be documented, analyzed, and communicated to management, customers, the project team, and other stakeholders.

Tracking

As risk management activities are induced, they will need to be documented. The documented actions and their results will support ongoing decisions within the current project (as well as future projects), and will serve as information for management, the project team, the customers, and other stakeholders. Should the performing organization choose to audit the risk management processes, the tracking of these activities is crucial. Based on the scope and impact of the project, the level of detail within the tracking and documentation of the risk management activities can vary.