Risk Management
PURPOSE
To provide the process and tools to manage project risks.
GENERAL REQUIREMENTS
All group members must use this procedure for risk management and when needed they need to
pick a member that will lead its risk activities. In addition, the other group members are required
to provide support to the risk management leader once he or she is chosen.
PROCEDURE
1. Risk Identification
a. We identify project risks by stating the uncertainty of a situation and its impact.
b. The group will list all risks that might occur while working on the project.
2. Risk Evaluation
a. Here the group will use its judging ability to evaluate the probability and impact of each
risk.
i. Probability of occurrence will be rated: Low, Medium, or High.
ii. Impact of occurrence will be rated: Catastrophic, Critical, Marginal, or Negligible.
b. Each risk will also have a status of Red, Orange, or Green.
i. Red Status means that it is active and affecting the project.
ii. Orange Status means it is active but will not affect the scope or the delivery date.
Iii Green Status means that it is not yet active.
3. Risk Response
a. The group will decide how to react appropriately to a risk that it determines requires
response planning. The group can deal with the risk in one of the four ways:
i. Contingency where plan will be invoked once a risk materializes.
ii. Mitigation where scope of the plan will be adjusting to reduce the probability and
impact of the risk.
iii. Transference where risk will be shared or taken upon all members.
iv. Do nothing.
4. Risk Reporting
a. Project Risk Lead will prepare one weekly project review that will talk about most
significant risks using Risk Assessment Matrix below.
Risk assessment matrix
High
Mitigate or
Plan and
Monitor
Mitigate
or Plan
and
Monitor
Mitigate
Mitigate
Medium
Mitigate or
Plan and
Monitor
Mitigate
or Plan
and
Monitor
Mitigate
or Plan
and
Monitor
Mitigate
Low
Do nothing
Mitigate
or Plan
and
Monitor
Mitigate
or Plan
and
Monitor
Mitigate
or Plan
and
Monitor
Negligible
Marginal
Critical
Catastrophic
GENERAL PLAN
If a catastrophic risk occurs then our group will rethink whether the project can still
recover and see at what cost. Then we will have to step back in the process and try to figure out
where the problem lies to figure out how to fix it.
Since the project has fixed deadlines and set requirements, if we do not have enough time
we might have to reconsider the scope or the delivery date or both. Afterwards, we will make
new time estimates for everything else that is left in the project. All risks will be analyzed with
Risk Checklist, monitored by the likelihood and status of the risk, and managed by the owner
listed in the table.
Risk
Name
Description
Probability
Impact
Action
Status
Owner
Human
Individual or group of
people, illness, family
emergency, etc.
Medium
Critical to
Catastrophic
Redistribute work if
possible, otherwise,
contact the customer.
Green
Team
Leader
Natural
Weather/natural
disaster, accident, etc.
Medium
Critical to
Catastrophic
Back up information
on a weekly basis at
multiple locations.
Orange
Group
Operational
Loss of assets, failure
in distribution, etc.
Medium
Critical
Testing prior to
distribution and
keeping
track of assets.
Green
Group
Procedural
Internal systems or
controls, failure of
accountability, etc.
High
Critical
Track results of a
current procedure and
come up with ways on
how it can be
improved in weekly
meetings.
Orange
Team
Leader
Project
Underestimated costs,
time shortage,
undesirable quality,
changed requirements,
etc.
Medium
Marginal to
Critical
Track the rate at which
things are
accomplished
and how fast they are
approaching optimal
quality and deadlines.
Orange
Group
Technical
Advancement in
technology, technical
failures, component
integration, etc.
Low
Critical
Become aware of
advancements in
technology and
reassure
the project can be
maintained over time.
Green
Group
RISK CHECKLIST
1. Is there a sufficient commitment to the project?
2. Is there well defined process model?
3. How often do the requirements change?
4. Are deadlines more important than optimality of the project?
5. Are there enough people with skills needed to accomplish this project?
6. Can deadlines be met with changing scope /requirements/situations?
7. Can the project still succeed at this point and how can project’s success be measured?
8. Is there sufficient funding/resources available for the completion of the rest of the
project?
9. How big and important is the risk at this time?
10. Is the process maturing with time?
11. Are there components of a previous plan that can be reused?
12. Is there a domain expert?
13. How will this risk impact other risks?
14. Is optimal quality achievable?
15. Are the customers currently satisfied?
16. Is the project closer to the goal?
17. How well is the project managed?
18. Is there an allocation plan for each risk?