How to create a Risk Management Plan for Projects
Creating risk management for projects is one of the critical tasks that a good Project Manager has to perform for his projects. When a Project Manager has this in place, he will be able to conduct effective risk management for his project in order to mitigate risks and any other issues that can affect the project.
He will be able to perform risk management activities for his project.
Project Management carries with it inherent risk that thing can go differently than you had hoped or planned. The process of deciding how to approach and plan for project risks early in the planning phase can help you maximize opportunity in positive risks that may occur during the lifecycle of your project.
What then is a risk?
A risk is an uncertain event that may have either a positive or negative effect on the project. The purpose of a risk management plan for projects is to measure the probability and impact of a risk on a project. Some common ways to classify risk are effect-based classification, source-based classification and level of uncertainty.
#1 EFFECT BASED CLASSIFICATION
Effect-based classification as part of a risk management plan that is inherent in a project could have an impact on its success. These major risks include time, cost, quality and scope. All these risks are interrelated such that changes to one will affect others.
Take, for instance, a Project Manager may choose to use effect-based risk classification for a complex project in which many of the risk factors are interrelated such as a large-scale corporate production in which many departments and external resources are participating. If any of the department failed to perform his role on time, it will affect the schedule, cost, quality, and scope of the project. So, the Project Manager needs to classify all the risks and their impact on the rest of the project.
#2 SOURCE BASED CLASSIFICATION
Source-based classification is a method of analysing risk in terms of its origin Sources may be internal or external to the project and technical, non-technical, industry-specific or generic.
For a project internal and external resources, such as an advertising campaign, a project manager may classify the risk in terms of where they originate from. One source of risk could be the failure of an external advertising agency to met the deadline , which could affect the schedule and scope of the project.
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