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
© Zilicus Solutions 2012
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
Projects get successfully delivery only when people work together. Project team can work together only
when they know what they should do and they would know this, only when they are informed about
it. That’s the precise reason why organizations should have communication plan. Communication
plan is about establishing appropriate channels to let correct information flow top-down as well as
bottom-up manner.
Identifying Project Stakeholders
The first thing that needs to be done at the time of creating communication plan for a project is, to
identify stakeholders of the project and their information relevance (extent of information & time of
receiving/sharing information). Stakeholders could be customers (internal/external), vendors,
employees, partners, etc. and of course at different levels in the project organization with differential
interest, importance & influence over project.
Planning project communication:
It is important for project manager to categorize project stakeholders & identify apt communication
channels as per stakeholders’ category. Such arrangement will save project managers’ time during
project execution while dealing with amount of information he/she receives & has to communicate.
Just for example, some stakeholders necessarily have to receive certain information (e.g. project
sponsors to know about achievement/failure to achieve milestones in respect of specific timeline)
similarly; project planner can identify categories of project stakeholders such as follows
For each of the identified stakeholder category, there has to be modes of communication that we need
to establish as appropriate to the context of the project.
6.2 Communication Plan
© Zilicus Solutions 2012
Project manager need to be clear about how information would be gathered & shared–
Receiving information: should it be through meeting (e.g. User Acceptance Test meeting
with customer) or over email (collect status of activities/issues over email or s/w tool from
team members )or some other means
Sharing Information: should it be done through meeting (e.g. stakeholder meeting) &
then sharing MoM mail or over email (project activities are to be completed by team
members)
What can we expect from communication plan?
Sr.
No
To distribute/share To receive
1.1 Must Inform Must get response/update from
1.2 Should Inform Should get response/update from
1.3 Could Possibly Inform Could Possibly get update from
1.4 Need not inform Need not get update from
Sr.
No
Importance Other Factors
2.1 Critical | Information/action Immediate (time, frequency)
2.2 Mandatory | Information/action As per schedule (time, frequency)
2.3 Information only Email/press release/Language, format
2.4 For action & updates Authority to share/ receive/ commit
2.5 Can Ignore | Confidential Escalation Matrix for reference
Procurement Plan
Project procurement plan documents purchase policy illustrating purchase process, buy/lease/rent
decisions, vendor selection, negotiation, financial concurrence, duration, legal concurrence, etc. Also
it should chalk out roles authorized to make tendering process, financial & legal concurrence, and
approval/rejection decision.
What can we expect in procurement plan?
Apart from above factions project planner needs to specify how procurement statement of work
(SoW) or RFQ/RFT to be organized or tracked, sourcing criterion, vendor selection criterions as well
document the make-buy decision approach & escalation matrix for the same.
Conclusion:
One of the critical factors to succeed in project management is to have comprehensive & detailed
project plan; yet have the flexibility to adapt appropriately based on the uncertain circumstances