risk management plan
TRANSCRIPT
Risk Management Plan
Project Name: California Statewide VINE
Department: Professional Services
Project Manager: Stephen Adams
Date: November 19, 2007
Risk Management Plan
INTRODUCTION...................................................................................................1
PURPOSE AND SCOPE.......................................................................................1
RISK MANAGEMENT PLANNING.......................................................................2
RISK IDENTIFICATION........................................................................................2
RISK IDENTIFICATION........................................................................................3
RISK ANALYSIS...................................................................................................4
RISK PLANNING..................................................................................................4
RISK MONITORING AND CONTROL..................................................................5
RISK MANAGEMENT ASSIGNMENTS...............................................................5
RISK CLASSIFICATION.......................................................................................6
REFERENCED DOCUMENTS..............................................................................8
Document Revision History................................................................................9
Risk Management Plan
INTRODUCTION
The Appriss approach to risk management starts with a plan that defines the scope and process for the identification, assessment, and management of risks which could impact the implementation of the project. The objective of the Risk Management Plan is to define the strategy to manage project-related risks such that there is acceptable minimal impact on cost and schedule, as well as operational performance.
PURPOSE AND SCOPE
The purpose of the Risk Management Plan is to establish an approach to monitoring, evaluating, and managing risks throughout the life of the project. A risk is an uncertain event or condition that, if it occurs, has a negative or positive effect on the project’s objectives.
The risk management process will identify potential risk sources; assess individual risks and impacts on performance, cost, and schedule; evaluate alternative approaches to mitigate high and moderate risks; and develop action plans to handle individual risks.
The product of risk management planning will be the Risk Register. The Risk Register will document the various risks with their classification, mitigation and handling strategies, impact on cost and schedule, and action items.
The risk management process includes these five elements.
1) Risk Management Planning – Deciding how to approach and conduct the risk management activities for the project.
2) Risk Identification – An initial and continuous effort to identify, quantify and document risks as they are identified.
3) Risk Analysis – Evaluate identified risks to determine probability of occurrence, impact, and timeframe.
4) Risk Planning / Mitigation – Establish an action plan for risk and assign responsibility.
5) Risk Monitoring and Control – Capture, compile, and report risk.
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RISK MANAGEMENT PLANNING
Risk management planning is the process of determining how to approach and conduct risk activities for the project. Planning is critical to establish the importance of risk management, allocating proper resources and time to risk management and establish the basis for evaluating risk.
The diagram illustrates the functional relationships of the five risk management process elements:
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RISK IDENTIFICATION
A baseline set of risks will be created and entered into the project Risk Register. These baseline risks will be identified through the normal course of the project planning process. Risk statements will be written for each identified risk. Risk statements will be clear concise and contain only one risk condition and one or more consequences of that condition.
All project stakeholders are responsible for identifying new risks. New risks identified during project related meetings shall be captured and added to the Risk Register within two working days of the meeting. It will be the responsibility of the Appriss Project Manager to make sure this is accomplished.
Appriss brings ten years of experience to the project in implementing similar systems. This experience has provided Appriss with a unique insight to common operation and system risks. Some of the common risks are documented in the table below. This table is not intended to be an exhaustive list.
Risk Area Potential RiskProject Scope and Complexity Scope is not understood
Requirements not documented properly Requirements not agreed upon by
customer Complexity not understood in terms of:
o Technologyo Adapters neededo Number of userso Business process
Technology Technology not proven Unreliable performance record of
vendors Inexperience with the technologies to
be used Vendor infrastructure is not sound
Staffing Inadequate resources committed to the project
Project team does not contain members that have experience with similar projects
Resources pulled from project before completion
Culture Users not willing to make business process changes
Customer does not make a strong commitment to project
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Organization changes within agency, removes key personnel
Project Management Executive oversight committee is not actively engaged in project
Project issues are not addressed Change is not controlled and project
scope grows beyond original boundaries
RISK ANALYSIS
Appriss will use a qualitative approach to Risk Analysis. This methodology uses a risk level matrix based on probability and impact. This allows for an independent assessment of probability and consequence of risk.
Each risk shall be evaluated to determine impact, probability of occurrence, and timeframe. Each risk shall be examined to determine its relationship to other risks identified. Initially, the identifier of the risk shall provide an estimate of these attributes. The Project Manager shall be responsible for further analyses and prioritization of the risks. The criteria for analyzing risks are established later in the Risk Classification section of this plan.
RISK PLANNING
Risk handling is the identification of a course of action or inaction selected for the purpose of effectively managing a given risk. All identified risks shall be handled. Specific handling methods should be selected after the probable impact on the project has been determined.
The Appriss Project Manager will determine what action should be taken for each risk as it brought to his attention through weekly team meetings and database reports. The Appriss Project Manager shall determine whether to keep the risk, delegate responsibility, or transfer the risk responsibility up the project organization chain. The Project Manager, if necessary, may transfer a risk(s) to external organizations if that organization is best suited to handle the risk.
Risk planning requires a decision to perform further research, accept the risk (document acceptance rationale in the Risk Register and close the risk), watch the risk attributes and status (define tracking requirements, document in the Risk Register, and assign a "watch" action), or mitigate the risk (create a Mitigation Plan, assign action items, and monitor the activities and risk).
Mitigation activities shall be documented on the Risk Register or by creating a separate Mitigation Plan. A Mitigation Plan shall be written for any effort that requires re-allocation of project resources. The Project Manager shall determine when to use a Mitigation Plan.
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RISK MONITORING AND CONTROL
Risk information and metrics defined during planning shall be captured, tracked and analyzed for trends. The person assigned responsibility for the risk shall provide routine trend and status reports on research and/or mitigation activities to the Appriss Project Manager during the weekly project meetings. Watched risks shall be reported on during the monthly project meetings. The Risk Register shall be used to report summary status, and a Stoplight Status Report shall be used by the Appriss Project Manager to report progress to senior management at the monthly reviews.
Decisions shall be made by the Project Manager during the weekly and monthly meetings to close risks, continue to research, mitigate or watch risks, re-plan or re-focus actions or activities, or invoke contingency plans. This is also the time when the Project Manager authorizes and allocates resources toward risks.
RISK MANAGEMENT ASSIGNMENTS
The following table describes the responsibilities of the project stakeholders:
Who ResponsibilitiesIndividual Members
Identify new risks Estimate probability of risk, impact, and time frame Classify risk Recommend action Assist in prioritizing risk
Appriss Project Manager
Collect all risk information from individuals Ensure accuracy of probability, impact and time frame Build the Risk Register Collect and report risk measures and metrics Report risk to senior management Prioritize Risk
Executive Oversight Committee
Authorize expenditures of resources for mitigation Authorize additional cost or time to mitigate risk.
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The following table describes the criteria for communicating and documenting risk
Who ResponsibilitiesIndividual Members to Project Manager
Any risk that impacts performance Any risk that impacts >10 percent of budget Any risk that exceeds schedule milestones Any risk that needs to be transferred to another team
Project Manager to Executive Oversight Committee
Mitigation activity status Any risk that impacts mission success Any risk that causes the project budget to be exceeded
by more that 10 percent Any risk that may negatively impact Appriss or their
customers Risk status
RISK CLASSIFICATION
Risk shall be analyzed qualitatively using impact, likelihood and timeframe classifications defined in this section. Impact is based on project success, resources, cost, and schedule. Likelihood is used to provide an order of magnitude based on quantitative data and qualitative experience.
Impact Classification
High Schedule Slip – Slip of delivery beyond two month of milestone schedules. Cost Overrun - > 10 percent increase in budget allocation. Technical – Loss of critical function or major objective. Political – Bad press for TOHS, DIR, TDEx, or other entities
Significant Schedule Slip - > 1 month <2 month delivery from milestone schedules Cost Overrun - > 5 percent but < 10 percent increase to budget Technical -Major function objective not fully met. Political - Senior Management has concerns about project success or
development progress
Low Schedule Slip - > 2 weeks <1 month delivery from milestone schedules Cost Overrun - < 5 percent increase to budget Technical –Some wanted or desired functions are not met.
Negligible Schedule Slip - < 2 weeks delivery from milestone schedules
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Cost Overrun – minor impact Technical –Small impact to technical performance
Likelihood Classification
High (>70% chance of occurrence) Occurrence is very likely and may not be controlled by following existing
processes, procedures and plans.
Significant (40% - 70% chance of occurrence) Occurrence is likely and may not be entirely controlled by following existing
processes, procedures and plans.
Low (20% - 39% chance of occurrence) Occurrence is unlikely and may not be entirely controlled by following existing
processes, procedures and plans.
Negligible (<20% chance of occurrence) Occurrence is very unlikely and is generally controlled by following existing
processes, procedures and plans.
Timeframe Classification
Near - Action or mitigation needs to take place within the next 4 months
Mid - Action or mitigation needs to take place between 2 months and 4 months
Far - Action or mitigation needs to take place beyond 4 months
Once risk items are entered they will be assigned an exposure grade red, yellow, or green based on the following combinations of impact/likelihood:
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Risk Classification Chart
Green - Items classified as green are acceptable without further mitigation and will be routinely tracked.
Yellow - Items classified as yellow may require mitigation. For these items, alternative dispositions will be identified and trade-offs conducted to determine the mitigation required.
Red - Items classified as red are considered primary risk drivers. For these items, mitigation options will be developed. Red risks will be assessed for impact to budget reserves and will be tracked to closure.
Timeframe is used in conjunction with the Risk Classification Chart to determine priorities, establish when risks need to have actions taken, and how long risks may need to be watched or tracked before they no longer are a concern or can be closed.
Each project review meeting will result in an update to the project Risk Register that will be sent to all project personnel.
REFERENCED DOCUMENTS
1. Risk Register2. Mitigation Plan3. Stoplight Status Report
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High RED
Significant YELLOW
Low
GREEN
Negligible
Negligible Low Significant High
Risk Management Plan
Document Revision History
Version Date Changes Updated By
1.0 4/30/07 Original document C. Higginbotham
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