In this short video tutorial, Jennifer Bridges, PMP, explains risk management and how to manage risks effectively on your project.
In Review: What Is Risk Management in Projects?
Jennifer discussed the definition of risk management and how to create a detailed risk management plan. As always, Jennifer advised, use the triple constraint as a lens to study potential risks to the scope, the budget and schedule of the project.
But what is a detailed risk management plan? Quite simply, it’s the who-what-when-how document:
- Who needs to know what?
- What is the process for documenting and managing risks?
- When is the specific risk impacting the schedule?
- How will we mitigate each risk?
Pro-Tip: Use online tools for risk management. Many use Excel or even word docs for their logs and registers, and while any template that can help you identify and evaluate risk is a good start, nothing beats tracking risks online and seeing the actual impact on the live plan.
Thanks for watching!
Hello! I’m Jennifer Bridges, Director of ProjectManager.com.
Welcome to our Whiteboard Session today on “What is Risk Management?” A lot of people ask what it is and how often we do it, so today, what we want to do is just take a few minutes to clarify what it is and how to do it.
First of all, I want to mention the Triple Constraint. It’s an important part of the project, which talks about the scope, which are the deliverables of the product that we’re producing as a result of the project, the cost or the budget of the project, the time or the schedule, and the components of quality, which, again, is referenced as the Triple Constraint. Throughout the project, different events occur. Maybe things happening with scope, or cost. Or, changes in the schedule or quality occur that could introduce risk. Or, vice versa, different events can occur throughout the project that can impact these components, as well.
Basically, from a high level, when we talk about the Project Management Plan, we know that the Project Management Plan has other plans, sub-plans, in it, as well. Like the Time Management Plan, Scope Management, Budget, Quality, the Change Management Plan and Issues Management. But also the Risk Management Plan is a subset, or a sub-plan, of the Project Management Plan.
Basically, what is detailed in the Risk Management Plan is the process. We want to know who needs to know. Who can interject risk into the project? What’s the process? When do we do it? How do we do it? Basically, the who-what-when-how to manage risk on the project.
We also look at tools. We identify what tool set we’re going to use, so everyone on the project who needs to know, or is involved, will know what tools to use. We’re going to use project management software. Now, a lot of the project management software available today is great with helping to identify and manage risk. A lot of people still use Excel where they have the logs and registers. And any kind of templates, the templates we may use to identify and evaluate risk.
The activities included in the Project Management Plan are identified here. Basically, it’s just all the activities that we use to manage risk throughout the entire project. So, what are some of those activities?
Risk management activities are about the activities to identify the risk. Like, how do we go about identifying what documents or what things do we look at determining when we do identify risks, we want to determine what’s the probability. What’s the probability that this will happen and evaluating the impact. If it does happen to occur, what would be the impact to the project? Would it have a huge or a small impact? With that, we plan the responses. We document if these risk events do occur, then how will we respond to them.
Then, of course, we continue to document and track those risks all along the project. It’s not just a one-time thing. It’s important to keep them documented, keep them tracked. Are we doing these, getting them responded to promptly, and of course, communicating those risks throughout the project to the appropriate members of the team?
If you need a tool that can help you manage and track the risk on your project, then sign up for our software now at ProjectManager.com.