Supporting Plans
6.1 Risk Management Plan
Assuming you are responsible for setting up of a power plant and in the wake of recent mishaps
occurred in some other country, government has enforced stringent compliance requirement of failsafe
mechanisms at every possible stages of power generation & disposal management. And this
compliance requirement will get applicable to all existing as well as new power plants. You would be
stranded if you have not thought of occurrence of this event. What would you do? Wouldn’t you be
better off, if you have had risk mitigation plan to face such event?
The project risk is futuristic uncertainty that may occur during life of a project and can affect project
deliverables. The risk can be recorded through cause-effect analysis. The cause of risk could be some
hypothesis, limitation, requirement, etc. and the effect could be slippage of timeline, cost
overrun/save, performance degradation/improvement, etc. of the project for example – new
regulatory compliance may be enforced on power projects, economic uncertainty may lead to higher
cost of labour, etc.
Project risk management is about assessing future uncertainties which can have potential impact on
project objectives and the exercise of creating risk management plan, prepares team for effectively
managing those uncertainties.
What can we expect from project risk management plan?
Sr.
No
Item Description
1 Risk Identification
1.1
Identification
process
The success of the risk management depends on the pro-activeness
exhibited by project team in identifying & reducing effect of risks on
project. This can be facilitated if risk identification process is well
6. Supporting Plans
6.1 Risk Management Plan
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documented & is easy to understand for team members. It also
1.2 Risk Categories The project risk planner specifies categories of the risks based on the
potential impact on the project objective e.g. catastrophic, severe, low, etc.
2 Risk Assessment
2.1
Risk probability
and impact
Well established criterions to help team members to assess risk probability
& impact.
2.2 Risk Tolerance
The plan to indicate what could be risk tolerance level that would be
acceptable to stakeholders and what strategy to be adopted if risk level
crosses the tolerance level.
3
Risk Responses
The risk planner must define under what conditions response should be to avoid, accept,
mitigate or transfer the risk.
4 Risk Management
4.1 Mechanism It outlines what approach to take, whom to consult, what utility to use, etc.
4.2
Roles and
responsibilities
This section specifies who should do what if risk occurs. It is not
uncommon to find armies world over have defined personnel to command
and own specific responsibility.
4.3
Budget
Provisioning
This section marks budget provisioning for known & unknown risks and
provide justification of doing so.
4.4 Risk Tracking It details who would track risk, in what frequency, with what inputs, etc