Risk Management Plan DOCUMENT ACCEPTANCE and RELEASE NOTICE This is of the Risk Management Plan. The Risk Management Plan is a managed document. For identification of amendments each page contains a release number and a page number. Changes will only be issued as complete replacement. Recipients should remove superseded versions from circulation. This document is authorised for release once all signatures have been obtained. PREPARED:______________________________________________ DATE: ___/___/___ (for acceptance) (, , Project Manager) ACCEPTED:______________________________________________ DATE: ___/___/___ (for release) (Project Sponsor, ) on behalf of the Steering Committee The most recent amendment first. VersionDateAuthorReasonSections Section TitleSection NumberAmendment Summary Copy NoVersionIssue DateIssued To12 Electronic Table of Contents 1 Executive Summary. 6 2 Introduction. 6 3 Risk Assessment 6 3.1 Identification. 6 3.2 Analysis and Evaluation. 8 4 Risk Mitigation. 9 5 Risk Monitoring. 10 6 Roles and Responsibilities. 10 6.1 Steering Committee. 10 6.2 Project Manager 10 6.3 Project Team.. 11 Appendix A: Risk Register (as at dd/mm/yy) 12 1 Executive Summary The purpose of this document is to provide a management framework to ensure that levels of risk and uncertainty are properly managed for the remainder of the project. As risk management is an ongoing process over the life of a project, the Risk Register must be considered a ‘snap shot’ of relevant risks at one point in time. This document will achieve this by defining the following: 2 Introduction The purpose of risk management is to ensure levels of risk and uncertainty are identified and then properly managed in a structured way, so any potential threat to the delivery of outputs (level of resourcing, time, cost and quality) and the realisation of outcomes/benefits by the Business Owner(s) is appropriately managed to ensure the project is completed successfully. The objectives of the risk management approach in the Project are to identify, assess and mitigate risks where possible and to continually monitor risks throughout the remainder of the project as other risks or threats emerge or a risk’s impact or likelihood changes. As risk management is an ongoing process over the life of a project, this Risk Management Plan and Risk Register must be considered a ‘snap shot’ of relevant risks at one point in time. Where required, the process of risk identification, assessment and the development of countermeasures will involve consultation with the Steering Committee members, the Reference Group, other relevant stakeholders and Project team members. 3 Risk Assessment 3.1 Identification Please Identify minimum 5 In this section specify: 1.Risk Trigger – Consider what might be a ‘trigger’ event or threat (eg. ‘poor quality materials causes costs to rise’) – several triggers may reveal the same inherent risk; 2. Risk Identification Identify the risk – use a ‘newspaper headline’ style statement – short, sharp and snappy (eg. ‘budget blow out’) 3. Risk Description describe the nature of the risk 4. Risk Impact the impact on the project if the risk is not mitigated or managed (eg. project delayed or abandoned, expenditure to date wasted, outcomes not realised, government embarrassed etc). what risk identification process has been undertaken (ie. brainstorm, facilitated session, scan by Project Manager etc);any categories used to assist in the identification or relevant risks;when the risk identification process occurred; andwho was involved. 3.2 Analysis and Evaluation Once risks have been identified they must be analysed by determining how they might affect the success of the project. Generally the impact of a risk will realise one or any combination of the following consequences: Project outcomes (benefits) are delayed or reduced;Project output quality is reduced;Timeframes are extended;Costs are increased. EG – Identify RiskConsequencesEg High Staff TurnoverProject outcomes (benefits) are delayed or reduced;Project output quality is reduced;Timeframes are extended;Costs are increased. Once analysed, risks should be evaluated to determine the likelihood of a risk or threat being realised and the seriousness, or impact, should the risk occur. ‘Likelihood’ is a qualitative measure of probability to express the strength of our belief that the threat will emerge (generally ranked as Low (L), Medium (M) or High (H)). ‘Seriousness’ is a qualitative measure of negative impact to convey the overall loss of value from a project if the threat emerges, based on the extent of the damage (generally ranked as Low (L), Medium (M), High (H) or Extreme). From this risks will be graded as A, B, C, D or N according to the following matrix: LikelihoodSeriousness LowMediumHighEXTREMELowNDCAMediumDCBAHighCBAA The ratings for likelihood and seriousness determine a current grading for each risk that in turn provides a measure of the project risk exposure at the time of the evaluation. In this section specify: Identify RiskConsequencesEg High Staff TurnoverProject outcomes (benefits) are delayed or reduced;Project output quality is reduced;Timeframes are extended;Costs are increased. Identify Risks and then Grade the Likelihood and Seriousness of each Risk and provide overall Grading For Each Risk please GradeEG-Risk 1 – LikelihoodSeriousness LowMediumHighEXTREMELow Medium High A Or Risk 1 – Likelihood Grading – A Seriousness Grading – A Overall Grading – A How the identified risks could potentially impact on the project in terms of the four categories of consequence (eg. x have potential to delay or reduce project outcomes/reduce output quality etc);Summarise the distribution of risks according to the grading (Grade A Risks – 2 Grade B Risks – 3 etc)Identify and List ‘A’ Grade risks. 4 Risk Mitigation Mitigation of risks involves the identification of actions to reduce the likelihood that a threat will occur (preventative action) and/or reduce the impact of a threat that does occur (contingency action). This strategy also involves identifying the stage of the project when the action should be undertaken, either prior to the start of or during the project. Risk mitigation strategies to reduce the chance that a risk will be realised and/or reduce the seriousness of a risk if it is realised have been developed. The following table is useful to determine how risks will be treated in terms of preparation and/or deployment of mitigation strategies during the life of the Project. Mitigation strategies are usually only prepared and/or deployed for Grades A through to C, however where an existing risk graded at D appears likely to be upgraded, mitigation strategies should be prepared. GradePossible ActionAMitigation actions, to reduce the likelihood and seriousness, to be identified and implemented as soon as the project commences as a priority.BMitigation actions, to reduce the likelihood and seriousness, to be identified and appropriate actions implemented during project execution.CMitigation actions, to reduce the likelihood and seriousness, to be identified and costed for possible action if funds permit.DTo be noted; no action is needed unless grading increases over time.NTo be noted; no action is needed unless grading increases over time. Identify RiskOverall GradingMitigation Possible Action In this section specify: The proportion of risk mitigation actions that are preventative (eg. 30%);The proportion of risk mitigation actions that are contingency (eg. 70%);Key stakeholders nominated as responsible for undertaking specific risk mitigation actions;Any major budgetary implications For any identified ‘A’ Grade risks specify: What type of mitigation action is proposed (preventative or contingency);Who is responsible for undertaking the proposed action; andAny cost implications for the project Budget. 5 Risk Monitoring Risk Management is an iterative process that should be built into the management processes for any project. It must be closely linked with Issues Management, as untreated issues may become significant risks. If prevention strategies are being effective, some of the Grade A and B Risks should be able to be downgraded fairly soon into the project. In this section specify How frequently a review of the Risk and Issues Registers will be undertaken (eg. fortnightly, monthly);Who will be involved in the review of the Risk and Issues Registers (eg. the Project team);How often risks will be monitored to ensure that appropriate action is taken should the likelihood, or impact, of identified risks change and to ensure that any emerging risks are appropriately dealt with (eg. monthly);If the Risk Register will be maintained as a separate document or as part of the Risk Management Plan;How often the Steering Committee or Project Sponsor/Senior Manager will be provided with an updated Risk Register for consideration; andHow often Risk status will be reported in the Project Status Reports to the Steering Committee/Project Sponsor/Senior Manager (usually only Grade A and B risks). 6 Roles and Responsibilities 6.1 Steering Committee Ultimate responsibility for ensuring appropriate risk management processes are applied rests with the Project Sponsor and Project Steering Committee, and they should be involved in the initial risk identification and analysis process. The Risk Management Plan and the Risk Register should provide the Project Sponsor and Project Steering Committee with clear statements of the project risks and the proposed risk management strategies to enable ongoing management and regular review. The Steering Committee will review the Grade A and B project risks on a basis via updated information provided in the Project Status Reports and provide advice and direction to the Project Manager. The Steering Committee will also be provided with an updated Risk Register for consideration, as required, when additional threats emerge or the likelihood or potential impact of a previously identified risk changes. 6.2 Project Manager The Project Manager will be responsible for: Development and implementation of a Project Risk Management Plan;Organisation of regular risk management sessions so that risks can be reviewed and new risks identified; Assessment of identified risks and developing strategies to manage those risks for each phase of the project, as they are identified;Ensure that risks given an A grading are closely monitored; andProviding regular Status Reports to the Steering Committee noting any ‘A’ Grade risks and specifying any changes to the risks identified during each phase of the project and the strategies adopted to manage them. In large or complex projects, the Project Manager may choose to assign risk management activities to a separate Risk Manager, but they should still retain responsibility. It should be noted that large projects are a risk in themselves, and the need for the Project Manager to reassign this integral aspect of project management may be an indication that the project should be re-scoped, or divided into several sub-projects overseen by a Project Director. 6.3 Project Team All members of the Project Team will be responsible for assisting the Project Manager in the risk management process. This includes the identification, analysis and evaluation of risks and continual monitoring through out the project life cycle. Appendix A: Risk Register (as at dd/mm/yy) Rating for Likelihood and Seriousness for each riskLRated as LowERated as Extreme (Used for Seriousness only)MRated as MediumNANot AssessedHRated as High Grade: Combined effect of Likelihood/Seriousness SeriousnessLikelihood lowmediumhighEXTREMElowNDCAmediumDCBAhighCBAA Recommended actions for grades of riskGradeRisk mitigation actionsAMitigation actions, to reduce the likelihood and seriousness, to be identified and implemented as soon as the project commences as a priority.BMitigation actions, to reduce the likelihood and seriousness, to be identified and appropriate actions implemented during project execution.CMitigation actions, to reduce the likelihood and seriousness, to be identified and costed for possible action if funds permit.DTo be noted – no action is needed unless grading increases over time.NTo be noted – no action is needed unless grading increases over time. Change to Grade since last assessmentNEWNew risk¯Grading decreased—No change to GradeGrading increased Please complete the Risk Register below Minimum 5 Risks IdDescription of Risk Impact on Project (Identification of consequences)L S G ChangeDate of ReviewMitigation Actions (Preventative or Contingency)Individual/Group responsible for mitigation action(s)CostTimeline for mitigation action(s)WBS 1Steering Committee unavailable Triggers include: Steering Committee meetings repeatedly rescheduled due to lack of availability; Members do not attend despite prior confirmation of attendance.Lack of availability will stall progress (ie. delayed decisions will defer output finalisation, extend project timelines and staff resources will be required for longer than anticipated)HHANEW15/02/06Preventative: Highlight strategic connection – link Project Objective to relevant Agency strategic objectivesConfirm 2006 meeting schedule in JanuaryConfirm SC membershipWiden representation (include other Agencies)Project ManagerNA15/03/06Y2Inadequate funding to complete the project Triggers include: Funding is redirected;Costs increase (poor quality materials/ inaccurate cost estimates) Budget blow out means cost savings must be identified – ie. reduce output quality, extended timeframes, outcomes (benefits) will be delayedMMBNo change15/02/06Contingency: Re-scope project, focusing on time and resourcingProject ManagerTBCTBCN3Staff reject new procedures Triggers include Staff don’t participate in training (not prepared for new roles);New procedures not applied (work-arounds still used). Rejection means additional time and resources required to achieve successful implementation – ie. some outputs languish; more training is required (additional cost, time delays); potential for ‘falling back into old ways’ (more change mgt required); loss of credibility for project (perception of failure).HHANEW15/02/06Preventative: Reinforcement of policy changes by management; Provide opportunity for staff feedback/input prior to policy/procedure finalisation; Develop Training Plan that allows for repeat attendance (perhaps 2 stage training?); Identify staff ‘champions’ to promote adoption of new procedures (buddy system); Circulate information to staff that promotes how new procedures have improved processes (eg. 10 steps reduced to 4 steps etc);proportion of staff that have successfully completed the training.Identifies local ‘buddies’ for troubleshooting. Sponsor Project Manager Consultant Project Manager Project Manager NA NA $3,000 NA NA 21/02/06 21/02/06 30/03/06 30/03/06 30/04/06 Y Y N N N Note: This example is in brief and more detail would be added as required. For example, in larger projects separate documentation might be developed for each major risk providing much more detail regarding mitigation strategies and costings.  This can be useful in identifying appropriate mitigation actions.  Assessment of Likelihood.  Assessment of Seriousness.  Grade (combined effect of Likelihood/Seriousness).  Work Breakdown Structure – specify if the mitigation action has been included in the WBS or workplan.
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