Practical Project Risk Management
SERIES ARTICLE
By Martin Hopkinson
United Kingdom
Purpose
Document the means by which a project will implement its risk management process.
General Points
Risk Management Plans enable:
- managers to consider how the process should be shaped to the project in question,
- project team members to understand what is expected of them and
- contractual responsibilities for risk management to be recorded and agreed.
Risk Management Plans should be designed to be useful and to be used. They should be concise, short and readable. Aim for no more than six pages.
Typical content
- Key project objectives related to the management of risk.
- A record of the project phases to fall within the scope of risk management activities.
- Process-specific responsibilities for risk, including those of the project sponsor, project manager, the risk manager, risk owners and risk response owners.
- Risk identification tools and techniques.
- Risk analysis tools and techniques.
- The maintenance of risk management information and production of reports.
- The nature of risk-related information required at project gate reviews.
- Arrangements for risk reviews and responsibilities for arranging and chairing them.
- Frequency / periodicity with which risk information will be reviewed and updated.
- Arrangements for the periodic assessment of risk management capability.
- Flow down of the contractual obligations for risk management.
Pros and Cons of Template Plans
The availability of template risk management plans within an organisation can help to reduce the time required for projects to develop their own bespoke plans both by providing exemplars of best practice and by providing core structure that can be copied.
A disadvantage of templates is they may discourage people from shaping the process in a manner tailored to individual projects. This can be particularly important during the early phases of projects when common practice techniques such as the probability impact matrix are often inappropriate. See the Risk in the Earlier Project Phases guidance sheet (May 2024).
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Editor’s note: This series of articles is by Martin Hopkinson, author of the books “The Project Risk Maturity Model” and “Net Present Value and Risk Modelling for Projects” and contributing author for Association for Project Management (APM) guides such as Directing Change and Sponsoring Change. These articles are based on a set of short risk management guides previously available on his company website, now retired. For an Introduction and context for this series, click here. Learn more about Martin Hopkinson in his author profile below.
How to cite this paper: Hopkinson, M. (2024). Risk Management Plans: A brief guide, Practical Project Risk Management series, PM World Journal, Vol. XIII, Issue VII, July. Available online at https://pmworldlibrary.net/wp-content/uploads/2024/06/pmwj143-July-2024-Hopkinson-Risk-Management-Plans-a-brief-guide.pdf
About the Author
Martin Hopkinson
United Kingdom
Martin Hopkinson, recently retired as the Director of Risk Management Capability Limited in the UK, and has 30 years’ experience as a project manager and project risk management consultant. His experience has been gained across a wide variety of industries and engineering disciplines and includes multibillion-pound projects and programmes. He was the lead author on Tools and Techniques for the Association for Project Management’s (APM) guide to risk management (The PRAM Guide) and led the group that produced the APM guide Prioritising Project Risks.
Martin’s first book, The Project Risk Maturity Model, concerns the risk management process. His contributions to Association for Project Management (APM) guides such as Directing Change and Sponsoring Change reflect his belief in the importance of project governance and business case development.
In his second book Net Present Value and Risk Modelling for Projects he brought these subjects together by showing how NPV and risk modelling techniques can be used to optimise projects and support project approval decisions. (To learn more about the book, click here.)
To view other works by Martin Hopkinson, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/martin-hopkinson/
