Risk Management Plan Template and Example
This article discusses how to write a project risk management plan and offers a project risk management plan template in order to support your risk response planning. Risks don’t have destructive effects on the project goals all the time. Sometimes taking a risk can make a contribution to the success of the project. However, without having a clear understanding of the project risks, you may take the wrong decisions. Therefore, you need to follow the steps established in the project risk management processes to respond to each risk successfully. Basically, risk management processes include identifying, classifying, analyzing risks to develop response strategies. A project risk management plan is a key project document which is prepared to identify and classify the project risks. It includes a risk assessment matrix to define the level of risk to support decision making.
Project Risk Management
There is no risk-free project available in the world. No matter what type of project you are building, you need to face risks throughout the life cycle of your project. Typically, risks can be defined as uncertain conditions or events that may have effects on the project objectives. So that the purpose of risk management is to increase the possibility of occurrence of positive risks and decrease the possibility of occurrence of negative risks. In other words, project risk management practices aim to develop strategies to maximize the effects of positive risks while minimizing the effects of negative risks.
Project Risk Management Plan
A project risk management plan is one of the most important project documents which includes plans to identify, analyze, develop responses and monitor and control to response risks. In other words, it explains how risk management activities will be performed in the project. The risk management plan is a complementary plan of the project management plan.
While creating a project risk management plan, you need to think about the processes given below.
• Plan Risk Management
• Risk Identification
• Risk Analysis
• Risk Response Planning
• Risk Monitor and Control
Plan Risk Management
In the plan risk management process, you make the overall plan to define how you are going to perform the miscellaneous risk management activities. You answer the “how” question when it comes to structuring the project risk management plan.
For example, you will answer how you’re going to identify, analyze and classify the risks at this step.
Risk identification is the first step before to think about analyzing and managing the project risks. But how are you going to identify the project risks correctly? You need to adopt some methods which are below;
- Review the documents and historical records
- Employ methods such as the PEST Method, Delphi Method etc.
- Brainstorm with your project team
- Interview with the important project stakeholders
Once you have identified the project risks, list them into the risk register according to their level of impact on the project objectives.
Analyzing and evaluating risks process comes just after the risk identification process. While analyzing and evaluating the risks, you need to consider the likelihood and level of impact of each risk. You can create a matrix and list each of the identified risks and give a score according to their level of impact and likelihood. Thus, you can prioritize the different types of risks.
Risk Response Planning
Since the risks are divided into two categories which are positive and negative, you need to develop your strategies to deal with them considering this classification. Because risk response strategies for positive risks are different than for negative risks.
In order to deal with negative risks, you need to perform Avoid, Transfer, Escalate and Accept strategies. On the other hand, for the positive risks, strategies are: Enhance, Exploit, Share, Escalate, Accept.
Accept and escalate risk response strategies are applicable to both positive and negative risks.
Note that the project risks can also be classified as internal and external risks. Internal risks are the issues that can be controlled by your organization such as management risks, human factor risks, technological risks, and physical risks. External risks, on the other hand, are the risks that are out of your control such as the economic risks, natural risks, and political risks.
Risks Monitor and Control
As the project proceeds, new risks may appear and some of the identified risks may disappear. Therefore, you need to keep all the risks under control by monitoring regularly. Since risk management is a living process throughout the project life cycle, the project risk management plan should be kept updated in order to response risks effectively.
Project Risk Management Plan Template
As discussed above, a project risk management is an important project document that helps you to deal with both positive and negative risks. The content of the project risk management plan varies depending on the project scope and requirements. Here below you can find a project risk management plan template to help you to create your own by adding and removing rows and columns considering your projects requirements.
Risk Assessment Matrix
Use the risk assessment matrix below to fill the related sections of the project risk management plan template.
This risk assessment matrix will help you to define the level of risk by considering the category of likelihood.
Risk Mitigation Chart
Use the risk mitigation chart below and write down the actions to be taken for each case to fill the related sections of the project risk management plan template.
In our previous article, we provided a short guide to discuss the fundamentals of the project risk management plan. This article which provides you a project risk management plan template is complementary to the previous one. So that we recommend you to read both of them to have a clear understanding of the concept. You can adjust the content of the template to meet your projects requirements. We recommend you to search online to understand how others handle the project risk management process. Comparing different templates and approaches will help you to create your owns especially if you are new to the risk management processes. Let me know if you want to add or share anything by using the comments section.