Project Risk Management Page 13
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17TRANSFERENCE (DEFLECTION, ALLOCATION): Make another
party responsible for the risk though purchasing of insurance,
performance bonds, warranties, guarantees or outsourcing the
work. Here is where the strong connection between risk and
procurement (or contracts) begins. One must complete risk
assessment before a contract can be signed! Transference of risk
is included in the terms and conditions of the contract.
When selecting risk strategies, it is important to remember:
Strategies must be timely
The effort selected must be appropriate to the severity of the
risk – avoid spending more money preventing the risk than the
impact of the risk would cost if it occurred
One response can be used to address more than one risk
Involve the team, stakeholders and experts in selecting a
strategy
Description of strategy
Name of risk response
strategy
Remove a task form the project
Avoidance
Assign a team member to visit the seller’s
Mitigation of the impact
manufacturing facilities frequently to learn about a
problem with delivery as early as possible
Notify management that there would be a major
Acceptance
increase if a risk occurs because no action is being
taken to prevent the risk
Remove a troublesome resource form the project
Avoidance
Provide a team member who is less experienced with
Mitigation of the
additional training
probability
Train the team on conflict resolution strategies
Mitigation of the impact
Outsource difficult work to a more experienced
Transference
company
Ask the client to handle some of the work
Transference
Decide to prototype a risky piece of equipment
Mitigation of the
probability
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