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2.4P Plan Risk Management
(2.4P.P1)
Risk refers to future conditions or circumstances that exist outside of the control of the project team that will have an adverse impact on the project if they occur. Whereas an issue is a current problem that must be dealt with, a risk is a potential future problem that has not yet occurred.
A reactive project manager addresses issues when they occur. A proactive project manager addresses potential problems before they occur. This is the art of risk management.
Not all issues can be seen ahead of time and some potential problem that seems unlikely to occur, may in fact occur. However, many problems can be seen ahead of time and they should be managed through a proactive risk management process.
Everything in life has some degree of risk. Walking across the street can be risky. Your projects have risks as well. The project manager should perform a risk assessment with the project team and the client to identify high, medium and low level risks. If you are lucky, you may find that you only have low risks. However, this assessment will alert the client and the project team to any medium and high-level risks that may cause future problems.
Identifying risks on your project is not necessarily bad, since risks are common to all projects. All projects have some degree of risk. Projects with a higher level of risk require more rigorous risk management and more management focus. Although not all risks can be eliminated entirely, most can be anticipated and managed ahead of time.
The purpose of risk management is to identify the risk events for a project and then establish a Risk Management Plan to manage the risk event and minimize harm to the project. In the TenStep process, the first time you perform a risk evaluation is in the 2.1P Define the Work step. Additional risk identification should occur throughout the project on a scheduled basis or at the completion of a major milestone.
The processes used to manage risk are described in this section. These processes can be modified as necessary for your project and then inserted into the Project Management Plan that is created during the 2.1P Define Work step. Before you start it would be good to have a more precise definition of risks and compare them to assumptions. See 2.4.2.2P Assumptions and Risks for this overview.
Small Projects (2.4P.P2)
Small projects usually do not have much risk. Remember that risk involves problems that may occur in the future. Since small projects usually do not have a long duration, there is not as much opportunity for future problems. If the project manager performs a risk assessment and uncovers some project risks, the risk procedures for medium projects can be used.
