Risk Management Plan: Scope and Objectives
Create a risk management plan. You have a budget of $100,000 and a timeline of six months for the plan. Please refer to the Risk Management Plan Template (Figure A-1 in Practical Project Risk Management) to create the plan.
Write an 8-10 page paper in which you:
Prepare the scope and objectives of the Risk Management Process section of the Risk Management Plan, based on the facts presented in the case study.
Determine the project size, based on the facts presented in the case study, and provide justification based on the Example Project Sizing Tool (Figure 3-4 in Practical Project Risk Management).
Select the risk tools and techniques, and complete the Risk Tools and Techniques section of the Risk Management Plan for both the qualitative and quantitative aspects of the project. Provide a rationale for the selections.
Develop the Risk Reviews and Reporting section of the Risk Management Plan, based on the project size previously determined.
Define the Probability and Impacts section of the Risk Management Plan, and justify the values assigned.
Define the Risk Thresholds section of the Risk Management Plan, and justify the values assigned.
Use at least three quality resources in this assignment. Note: Wikipedia and similar websites do not qualify as quality resources.
This course requires the use of Strayer Writing Standards (SWS). The library is your home for SWS assistance, including citations and formatting. Please refer to the Library site for all supports. Check with your professor for any additional instructions.
The specific course learning outcome associated with this assignment is:
Create a risk management plan that includes justification to support your rationale.
Risk Management Plan: Scope and Objectives
Introduction
The purpose of this risk management plan is to outline the process, tools, and techniques that will be used to identify, assess, and mitigate risks in the project. The plan will provide a comprehensive framework for managing risks and ensuring the successful completion of the project within the allocated budget and timeline.
Scope
The risk management process will cover all aspects of the project, including but not limited to:
Project planning and initiation
Requirements gathering and analysis
Design and development
Testing and quality assurance
Deployment and implementation
Project monitoring and control
Project closure
The risk management plan will be applicable to all stakeholders involved in the project, including the project team, management, customers, and any external parties.
Objectives
The main objectives of the risk management process are as follows:
Identify potential risks that may affect the project’s success.
Assess the likelihood and impact of each identified risk.
Develop appropriate strategies and action plans to mitigate or eliminate risks.
Monitor and control risks throughout the project lifecycle.
Communicate and report risks to stakeholders in a timely and effective manner.
Ensure the project is completed within the allocated budget and timeline.
To achieve these objectives, the risk management plan will utilize a combination of qualitative and quantitative risk analysis techniques, as well as various tools and reporting mechanisms.
Project Size Determination
Based on the facts presented in the case study, the project can be classified as a medium-sized project. The Example Project Sizing Tool (Figure 3-4 in Practical Project Risk Management) provides a useful framework for determining the project size.
Justification:
The project has a budget of $100,000, which falls within the range for medium-sized projects according to the Example Project Sizing Tool.
The timeline for the project is six months, which is also within the range for medium-sized projects.
The project involves multiple phases, including planning, design, development, testing, and implementation, indicating a moderate level of complexity.
Considering these factors, a medium-sized classification is appropriate for this project.
Risk Tools and Techniques
Qualitative Risk Analysis
For qualitative risk analysis, the following tools and techniques will be utilized:
Risk Register: A comprehensive log of all identified risks, their potential impacts, and their likelihood of occurrence.
Risk Probability and Impact Matrix: A graphical representation of risks based on their probability of occurrence and potential impact on the project.
Risk Assessment Interviews: One-on-one interviews with key project stakeholders to gather their insights on potential risks and their assessments.
Rationale:
The Risk Register provides a structured approach to document and track all identified risks throughout the project lifecycle.
The Risk Probability and Impact Matrix helps prioritize risks based on their severity, enabling effective allocation of resources for mitigation efforts.
Risk Assessment Interviews allow for a deeper understanding of risks from different perspectives and can uncover potential risks that may have been overlooked.
Quantitative Risk Analysis
For quantitative risk analysis, the following tools and techniques will be utilized:
Monte Carlo Simulation: A statistical technique that uses random sampling to model uncertainties in project variables such as cost, duration, and resource availability.
Decision Tree Analysis: A graphical representation of decision-making under uncertainty, capturing possible alternatives, their probabilities, and associated payoffs.
Sensitivity Analysis: An examination of how changes in individual variables affect overall project outcomes through different scenarios.
Rationale:
Monte Carlo Simulation provides a probabilistic assessment of project outcomes based on various input variables, enabling more accurate forecasting and decision-making.
Decision Tree Analysis helps evaluate different decision paths based on their expected values, providing insights into optimal choices under uncertainty.
Sensitivity Analysis allows for a better understanding of how changes in specific variables can impact overall project outcomes, enabling targeted risk mitigation strategies.
Risk Reviews and Reporting
In order to ensure effective risk management, regular risk reviews will be conducted throughout the project lifecycle. These reviews will involve key stakeholders, including project team members, management, customers, and any external parties involved.
The frequency of risk reviews will be determined based on the project’s criticality and complexity. For this medium-sized project, monthly risk reviews are deemed appropriate. These reviews will serve as opportunities to assess any new risks that have emerged, evaluate the effectiveness of existing risk mitigation strategies, and make any necessary adjustments to the risk management plan.
Risk reporting will be tailored to different stakeholder groups to ensure relevant information is communicated in a clear and concise manner. Key elements of risk reporting will include:
Risk status updates: Providing an overview of current risks, their likelihood and impact ratings, and any changes or developments since the last review.
Mitigation strategies: Describing the actions taken or planned to address identified risks.
Key risk indicators: Highlighting specific metrics or indicators that can serve as early warning signs for potential risks.
Recommendations: Providing suggestions for additional risk mitigation measures or adjustments to existing strategies based on emerging trends or observations.
Probability and Impacts
The Probability and Impacts section of the Risk Management Plan defines the rating scale for assessing the likelihood and impact of identified risks. The following rating scale will be used:
Likelihood:
Low: Unlikely to occur
Medium: May occur with moderate probability
High: Likely to occur
Impact:
Low: Negligible impact on project objectives
Medium: Moderate impact on project objectives
High: Significant impact on project objectives
Justification: The selected rating scale aligns with industry best practices for assessing risks based on their likelihood and impact. It provides a clear and intuitive framework for evaluating risks in terms of their potential consequences for the project’s success.
Risk Thresholds
The Risk Thresholds section of the Risk Management Plan sets the criteria for determining when a risk requires immediate attention or action. The following thresholds will be used:
High Risk Threshold: Any risk with a likelihood rating of high or an impact rating of high requires immediate attention from the project team. Mitigation strategies should be developed and implemented promptly.
Medium Risk Threshold: Any risk with a likelihood rating of medium or an impact rating of medium requires active monitoring by the project team. Mitigation strategies should be developed as necessary.
Low Risk Threshold: Any risk with a likelihood rating of low or an impact rating of low can be managed through routine monitoring without requiring immediate action.
Justification: The selected risk thresholds ensure that risks with significant likelihood or impact are promptly addressed, while allowing for appropriate prioritization of resources based on the severity of each risk. By setting clear thresholds, the project team can focus their efforts on mitigating risks that pose the greatest threat to the project’s success.
In conclusion, this risk management plan establishes a comprehensive framework for managing risks in the project. By defining the scope, objectives, tools, techniques, reviews and reporting mechanisms, probability and impacts ratings, as well as risk thresholds, this plan aims to ensure that potential risks are effectively identified, assessed, and mitigated throughout the project lifecycle.