Risk Management Methodology - Part II

Last week we completed looking at the probability and impact analysis (Steps 3a and 3b). This week we'll look at the remainder of the process.

Step 4: Here we are more subjective and qualitative in our analysis. This might include a rank ordering or placement on a probability impact matrix. This is so we can plan our responses to risk (share, transfer, accept, avoid). Note in the diagram there is a loop back to the identification of risks. Why? As we plan our responses, we will need to alter our project plans. As we alter our project plans, we may introduce more risks, so we need to once again make sure we have identified all the risks.

At this point, we've completed our planning and the project is ready to go into execution.

Steps 5 & 6: As our project progresses, we need to monitor for risks. If one occurs, we need to implement our mitigation strategy. Some larger projects have designated risk monitors who are empowered to employ the mitigation strategies if a risk occurs. As we implement, we need to both go back to monitoring and identification. Why? If our project is constantly in motion, we need to continue to monitor for risks. Also, if we have deployed a mitigation strategy, we've once again changed the course of the project and need to go back to see if there are new risk possibilities.

To access the image file of this process, click here!