Risk Management Plan Page 2
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101 Executive Summary
Risk is defined as an event that has a probability of occurring, and could have either a positive or
negative impact to a project should that risk occur. A risk may have one or more causes and, if it
occurs, one or more impacts. For example, a cause may be requiring an environmental permit to
do work, or having limited personnel assigned to design the project. The risk event is that the
permitting agency may take longer than planned to issue a permit, or the assigned personnel
available and assigned may not be adequate for the activity. If either of these uncertain events
occurs, there may be an impact on the project cost, schedule or performance. All projects assume
some element of risk, and it’s through risk management where tools and techniques are applied
to monitor and track those events that have the potential to impact the outcome of a project.
Risk management is an ongoing process that continues through the life of a project. It includes
processes for risk management planning, identification, analysis, monitoring and control. Many
of these processes are updated throughout the project lifecycle as new risks can be identified at
any time. It’s the objective of risk management to decrease the probability and impact of events
adverse to the project. On the other hand, any event that could have a positive impact should be
exploited.
The identification of risk normally starts before the project is initiated, and the number of risks
increase as the project matures through the lifecycle. When a risk is identified, it’s first assessed
to ascertain the probability of occurring, the degree of impact to the schedule, scope, cost, and
quality, and then prioritized. Risk events may impact only one or while others may impact the
project in multiple impact categories. The probability of occurrence, number of categories
impacted and the degree (high, medium, low) to which they impact the project will be the basis
for assigning the risk priority. All identifiable risks should be entered into a risk register, and
documented as a risk statement.
As part of documenting a risk, two other important items need to be addressed.
The first is mitigation steps that can be taken to lessen the probability of the event occurring. The
second is a contingency plan, or a series of activities that should take place either prior to, or
when the event occurs. Mitigation actions frequently have a cost. Sometimes the cost of
mitigating the risk can exceed the cost of assuming the risk and incurring the consequences. It is
important to evaluate the probability and impact of each risk against the mitigation strategy cost
before deciding to implement a contingency plan. Contingency plans implemented prior to the
risk occurring are pre-emptive actions intended to reduce the impact or remove the risk in its
entirety. Contingency plans implemented after a risk occurs can usually only lessen the impact.
Identifying and documenting events that pose a risk to the outcome of a project is just the first
step. It is equally important to monitor all risks on a scheduled basis by a risk management team,
and reported on in the project status report.
1.1 Purpose
This plan documents the processes, tools and procedures that will be used to manage and control
those events that could have a negative impact on the
Insert Project Name Here
project. It’s the
controlling document for managing and controlling all project risks. This plan will address:
• Risk Identification
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