Risk Management Plan
Project Name:
Learner Name:
Course Name:
Date:
Table of Contents
Section 1 – Introduction to the Plan 3
1.1 Benefits of Risk Management 3
1.2 Project Goals and Objectives 3
1.3 Company Background 3
1.4 Risk Identification 3
Section 2 – Risk Scope, Components, and Value 3
2.1 Scope of the Risk Management Plan 3
2.2 Risk Management Plan Components 3
2.3 Expected Monetary Value 3
2.4 Determine the Risks 4
2.5 Evaluate and Assess the Risks 4
2.6 Qualitative and Quantitative Processes 4
Section 3 – Risk Analysis and Assessment 4
3.1 Major and Minor Risks 4
3.2 Risk Probability 5
3.3 Risk Matrix Template 5
3.4 Risk Data Quality Strategy 5
3.5 Risk Reviews 5
Section 4 – Corrective Action and Monitoring 5
4.1 Risk Tolerance 5
4.2 Risk Mitigation 6
4.3 Corrective Risk Management Strategy 6
4.4 Corrective Action Plan 6
Section 5 – Postmortem Plan 6
5.1 Results 6
5.2 Follow Up 6
Section 6 – References 7
6.1 References 7
Templates 8
Risk Matrix Legend Example 8
Risk Matrix Example 8
Risk Monitoring and Control Example 9
Section 1 – Introduction to the Plan
Benefits of Risk Management
A risk management plan defines how the project’s risk management process will be executed. It is an important part of project management as it helps manage potential project risks (Scavetta, 2023). The management process has the following main steps:
Risk identification: to manage project risks, it is important to identify them first.
Risk assessment: Once the project risks are identified, they need to be prioritized depending on the level of impact or likelihood.
Risk mitigation: this step is where a plan to mitigate and manage risks is constructed. It is also important to define which team members will have the responsibility of monitoring and controlling risks.
Risk monitoring: risks must be monitored throughout the duration of the project.
Source: (Scavetta, 2023)
The benefits of risk management include the following:
Ensures that risks are managed properly.
Reduces the impact of negative risks and increases the impact of opportunities.
Details a plan of how the project team will manage risk(s).
Provides levels of each risk to manage it efficiently.
Probability and impact matrix helps assess impact on the project objectives.
Source: (Rahim, 2016)
A risk assessment can be used to identify and prioritize the different types of project risks, and the following steps do it:
Identifying the risk/areas of concern
Determining the risk criteria (likelihood, consequences)
Assessing the risks (three-tiered scale – high, medium, or low)
Prioritizing the risk (ranking risks and determining mitigation strategies)
Source: (Risk Analysis, n.d.)
Project Goals and Objectives
Project/Business Objectives
Become a leading competitor in the wearable technology market.
Increase company’s customer base by 25% at the end of the fiscal year.
Increase product development by 10%
1.3 Company Background
Cosmo, Inc. is a leading developer and distributor of wearable technology. They have products that include fitness coaching, nutritional coaching and lifestyle advising products. They currently hold a 33% market share in the wearable technology market; however, the CEO and President Harold Living of Cosmo, Inc. has discovered increased competition. CEO Harold Living has instructed the marketing team to develop a new marketing strategy that will help increase production, the customer base and grow and maintain the company’s market share.
CEO Harold has provided a budget of $150,000 for the project and a 10-week time frame for completion. The departments included in this project are business analytics, marketing and advertising, customer service and IT/Software development. HR will be involved temporarily in onboarding employees for digital content creation to help the advertising and marketing team.
To obtain a successful marketing strategy and advertise the new product, Cosmo, Inc. must hire four individuals with experience, skills, and training in marketing and digital content creation. They will be responsible for rolling out the marketing strategy and implementing it into advertising activities.
The focus for the marketing campaign will be on the following demographics:
customers who are between the ages of 25-50
college educated individuals.
tech-savvy
annual income of $75,000+
live in cities with a large population of 500,000 or more.
This risk management plan will assist the marketing team in achieving the project goals, managing and growing the company’s market share.
The project stakeholders are the following:
Stakeholder
Role
Responsibilities
Contact
Harold Living, President, and CEO
Project Sponsor
Fund the project, approves budget, business plan and make executive decisions
Harold.living@cosmo.inc
123-456-7890
Tayyaba Chaudhry
Project Manager
Provide resources that impact systematic risk
Tayyaba.chaudhry@cosmo.inc
789-456-1230
Eric Phillips
Project Leader
Manage and escalate risks and present extensive issues to project sponsors
Eric.phillips@cosmo.inc
465-897-3102
Chuck Smith
Software Engineer
Overlook engineering/design of product development as well as risks in the production area
Chuck.smith@cosmo.inc
987-654-3690
Karen Garett
Business Analytics
Document technical and business requirements, test solutions, and verify project deliverables. Manage risks in the analytics area
Karen.garett@cosmo.inc
457-985-1498
Emily Banegas
Marketing/Advertising
Manage advertising and marketing execution of the project. Will manage and overlook risks in the marketing/advertising area
Emily.banegas@cosmo.inc
987-123-7852
Ty Lindsay
HR/Onboarding
Employee onboarding and will handle hiring process risks
HRsupport@cosmo.inc
1.4 Risk Identification
The risk identification step is where risks are identified along with their level of impact on the project. This process leads to the overall risk management plan as it helps keep the identified risks under control. When project leaders have potential risks identified, it helps the team in responding, managing, and handling them more effectively and proactively.
Below are potential risks for this project:
Unable to find 4 talented digital content creators to execute the marketing strategy and online advertisement.
Unable to meet the project deadline in 10 weeks.
Unable to complete the project within the provided $150,000 budget.
Technical issues delaying the product creation.
Unable to get approval from FDA for the sensors (heart rate, blood pressure and blood sugar).
Unable to acquire the resources needed, such as engineering and design for new product development.
Supply shortage for parts/material needed for product development.
The project manager and project leader will work with the respective teams to review and the listed risks. A qualitative and quantitative risk analysis will help identify the level of severity for each risk and its consequences. The following steps will be implemented to prioritize the risks:
Set deadlines to review risks with each team/department.
Plan and mitigate risks at all appropriate levels (project team leader, project manager, CEO)
Communicate with stakeholders on the status of each risk.
Document all risk activity on the project SharePoint.
Conduct risk assessments.
Schedule bi-weekly meetings to update and follow-up on risk activities.
Section 2 – Risk Scope, Components, and Value
2.1 Scope of the Risk Management Plan
Define the boundaries of the risk management plan scope.
2.2 Risk Management Plan Components
Explain the components and the corresponding responsibilities that comprise the Risk Management Plan.
Describe the processes included in a risk management plan.
2.3 Expected Monetary Value
Apply an expected monetary value analysis to estimate the cost of a project without a risk plan.
Articulate the benefits of a risk management plan.
2.4 Determine the Risks
Identify sources of risk and the corresponding potential impact on project outcomes.
Include evidence of at least one of these processes:
Brainstorming.
The Delphi technique.
Ishikawa diagrams.
Interviewing processes.
2.5 Evaluate and Assess the Risks
Define the elements of the risk breakdown structure for use in evaluating project risk.
Analyze the impact of risk on project outcomes.
Integrate risk analysis techniques to create a risk breakdown structure.
2.6 Qualitative and Quantitative Processes
Apply qualitative and quantitative risk analysis.
Include evidence of at least one of these processes:
Sensitivity analysis.
Expected monetary analysis.
Monte Carlo simulation.
Decision tree analysis.)
Section 3 – Risk Analysis and Assessment
3.1 Major and Minor Risks
Analyze project risk to identify major and minor risks associated with the project.
How were the risks determined?
Were qualitative or quantitative methods used?
Was the most effective method applied to determine risk?)
3.2 Risk Probability
(Integrate qualitative and quantitative risk analysis techniques to identify methods for evaluating the probability of a risk event.
How confident are you in the accuracy of the probabilities used?
What can you do to improve the accuracy of the probability?
3.3 Risk Matrix Template
Insert your completed Risk Matrix Template. See the end of this document for examples.
3.4 Risk Data Quality Strategy
Define the process and tools to be used to determine the quality of data for use in assessing project risk.
How reliable is the data?
What is the evidence of reliability?)
3.5 Risk Reviews
Define the process to be followed for risk reviews to be conducted throughout the project life cycle. Insert your completed Risk Monitoring and Control Template. See the end of this document for an example.
What is being done to proactively reduce risk in the future?
What is being done to communicate risks?
Section 4 – Corrective Action and Monitoring
4.1 Risk Tolerance
Evaluate the organizational and departmental tolerance for risk.
Discuss the different risk tolerances within the organization.)
4.2 Risk Mitigation
Identify risk mitigation approaches in support of the project.
How will you implement the mitigation approaches?
Have you identified specific triggers to initiate mitigation?
4.3 Corrective Risk Management Strategy
Describe your strategy for corrective risk management.
Explain whether you will use auditing, strategic planning, or another type.
Describe the corrective action process and responsibilities.
Will you be performing a risk postmortem? If not, why not?)
4.4 Corrective Action Plan
Assess corrective plan procedures in support of the project.
Is your documentation available to others?
Is it reviewed by the team or others?
Section 5 – Postmortem Plan
5.1 Results
Identify and describe how results data will be collected and reviewed to determine corrective actions.
Did your postmortem results lead to any concrete changes? Explain.
5.2 Follow Up
Evaluate the organization’s view of risk management and approach, resulting from project outcomes.
Did this project change the organization’s approach and management of risk?
Describe the impact of postmortem results on the organization.
Recommend corrective plan procedures to effectively manage risk.
What recommendations would you make for future risk management projects?
What resources did you use to support your assertions?
Section 6 – References
6.1 References
Scavetta, A. (2023, March 6). How to make a risk management plan. ProjectManager. https://www.projectmanager.com/blog/risk-management-plan#:~:text=WhatIsaRiskManagement,assessmentmitigationandmonitoringactivities.
Rahim, E. (2016, June 19). The benefits of risk management planning. Bellevue University Project Management Center of Excellence. https://pmcenter.bellevue.edu/2016/06/19/the-benefits-of-risk-management-planning/
Risk Analysis. Capella stories: (n.d.). https://media.capella.edu/coursemedia/HIS1100element22358/wrapper.asp
Templates
You may delete this section once you have copied the tables as directed above.
Risk Matrix Legend Example
If you wish, you may color code risk in addition to using the indicators of high, very high, and so forth. A usual color scheme is green, yellow, orange, red.
Probability Level
Criteria
Code
Impact Level
Very High (VH)
90%
Very High (VH)
Catastrophic
High (H)
80%
High (H)
Critical
Medium (M)
70%
Medium (M)
Marginal
Low (L)
< 69%
Low (L)
No Impact
Probability Level
Criteria
Code
Impact Level
Risk Matrix Example
The risk matrix is a graphical representation of the identified risks and their evaluation in terms of probability (likelihood) of occurrence and impact on project success factors (costs, time, quality) if they should occur.
The definitions of risk probability and impact levels are specific to the selected project and reflect risk appetite and thresholds.
Risk #: Numerical number of risk.
Risk: Provide a description of the risk (i.e. Weather impacts – storm season).
Probability: Defines the likelihood that risk will occur (i.e. H, M, L).
Impact: Defines the level of impact to project success factors (time, costs, quality) (i.e., H, M, L).
Response to Risk: Avoid, mitigate, transfer and accept.
Action Plan: A detailed explanation of the steps for risk mitigation(s).
Person Responsible: Who will manage the mitigation strategy?
Status: Status of mitigation process.
Risk #
Risk
Probability
Impact
Response to Risk
Action Plan
Person Responsible
Status
Risk Monitoring and Control Example
Continue Review and Action Plan
Owner
Time Estimate
Monitoring Process [Define monitoring process of current and new risks]
Review [Define stages or timeframes for specific types of review]
Reporting [provide types of communication channels and deliverables]
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