A project Risk Management Plan (RMP) describes how a project team will incorporate the risk management process into its Project Management Plan. Particular emphasis should be given to how a project team will respond to risks and monitor and control risk throughout the life of the project. By identifying and analysing risks, and then responding to risks aggressively and monitoring the effectiveness of the response, project teams can improve the odds of meeting project objectives.
The template in Exhibit 7-1 is a convenient tool for project teams wishing to develop a detailed Risk Management Plan document; typically, this is more common for highly complex projects and/or projects with significant risk.
The template presents an organized approach and is meant as a starting point only; project teams must tailor the document to meet the needs of the Risk Management Plan for their project.
Project Risk Management Plan
A formal project RMP is a detailed plan of action for the management of project risk. Project risk planning involves the thoughtful development, implementation, and monitoring of appropriate risk response strategies. It is the process to: develop and document an organized, comprehensive, and interactive risk management strategy; and determine the methods to be used to execute a risk management strategy and plan for adequate resources. The project RMP may be specific in some areas and general in others. The key to this tool is its scalability. Every project should have a formal RMP, but the level of detail varies with project complexity.
What is a Project Risk Management Plan?
A project RMP gives a summary of the project and outlines the steps of the risk management process and how the Project Manager and project team are approaching them.
The RMP employed will vary based on the complexity of the project, but most project RMPs should include an outline similar to the following:
4. Organization and roles
5. Risk management strategy/approach
6. Risk identification
7. Risk assessment and analysis
8. Risk Response actions/allocations
9. Risk monitoring and control
Why use a project RMP?
A project RMP explains how a Project Manager and project team manage risk for their project. It provides guidance and requirements, and serves as a communication tool for those who wish to be informed of a project’s risk management approach. The plan formalizes the ideas presented during the risk management process and may clarify some of the assumptions the project team has regarding the risk management process.
How do you use a project RMP?
The project RMP is used to determine the risks of a project and how to respond in a manner that is forthright and accountable. The project RMP can be referred to regularly and should be updated throughout the life project.
What are the benefits of a project RMP?
A project RMP provides specific guidance for the project team members in all steps of the risk management process for their project. It documents the processes to use throughout the project for identifying, assessing, and managing risk.
When is the best time to develop a project RMP?
The formal plan should be developed by the Project Manager early in project development, typically early in scoping. The RMP must be updated during subsequent project development phases (Exhibit 7-2).