A Risk Management Plan is to assess the potential risks involved in a project. The risk management plan contains an analysis of likely risks with both high and low impact, as well as strategies to deal with the issues if common problems arise.
Risk Management Plan
Risk management provides a clear and structured approach to identifying risks. Having a clear understanding of all risks allows an organization to measure and prioritize them and take the appropriate actions to reduce losses. Risk management ensures that an organization identifies and understands the risks to which it is exposed. Risk management also guarantees that the organization creates and implements an effective plan to prevent losses or reduce the impact if a loss occurs.
Identifying the critical risks facing business is not an easy task. A risk management plan includes strategies and techniques for recognizing and confronting these threats. Good risk management plans should be periodically reviewed by the project team in order to avoid having the analysis become stale and not reflective of actual potential project risks. There may be many strategies for different organizations, four generic methods are commonly applied when developing your plan:
* Accept risk; simply take the chance that the negative impact will be incurred, but the risk might be so small the effort to do anything is not worth while.
* Avoid risk; changing plans in order to prevent the problem from arising
* Mitigate risk; lessening its impact through intermediate steps
* Transfer risk; Company can outsource risk to a professional third party that can manage the outcome
Risk management plan template
Whatever style and format you may choose for your risk management plan template in the process of creating your own template, it is crucial to include some key elements: the project background information, the risk identification, risk qualification and prioritization and risk management strategy
The first key area for consideration is the risk profile. In this part, you need to clearly identify risks and the events that contribute to the happening of the risks. You need to examine all the projects in details and list all possible risks in the process of project management.
The second part in the risk management plan template is the risk assessment. In the section, you need assess the risks for the probabilities of occurrence and potential impact. Qualitative assessment may be used as an initial screening, but all critical risks may be assessed through other methods to gauge the impact on the projects.
The third area of concerns in the template is about risk management strategy. In the section, you need to identify the options for handling the risks and action plan. You need to give instructions on how personnel and resources are allocated based on risk nature.