Risk Management

Once the risks have been identified and evaluated, attention needs to focus on managing them. Risk management logically follows risk analysis, though, as with analysis, the two phases will overlap and often be done in parallel.

Risk management consists of four major activities:

 

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Planning, which, for the countermeasure actions itemised during the risk evaluation activities, consists of:

*      Identifying the quantity and type of resources required to carry out the actions

*      Developing a detailed plan of action to be included in a Stage Plan

*      Confirming the desirability of carrying out the actions identified during risk evaluation in the light of any additional information gained

*      Obtaining management approval along with all the other aspects of the plans being produced

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Resourcing, which will identify and assign the resources to be used for the work to carry out the risk avoidance or amelioration actions; these assignments will be shown in Stage Plans; the resources required for the prevention, reduction and transference actions will have to be funded from the project budget, since they are actions which the project is committed to carry out; decisions have to be made on how contingent actions will be funded

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Monitoring, which consists of:

*      Checking that execution of the planned actions is having the desired effect on the risks identified

*      Watching for the early warning signs that a risk is developing

*      Modelling trends, predicting potential risks

*      Checking that the overall management of risk is being applied effectively

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Controlling, which is taking action to ensure that the events of the plan really happen.

Risk management continues throughout the project. However, as a minimum, actions will need to be carried out at the following points in the project management cycle.

Risk planning and resourcing should be done in the processes:

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Analysing Risks

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Executing a Work Package

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Updating the Risk Log.

Risk monitoring and controlling should be carried out throughout the project.

During Closing a Project Follow-up Actions will need to be considered for any outstanding risks that will continue into the product's useful life.