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Develop Risk Strategy
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We now must develop our Risk Strategy. This work builds on the Initial Risk Register we produced in the Start Up phase, and gives us an opportunity to examine the risks in greater detail, as well as identify any new ones.
Risk Analysis
Allows you to manage risk properly by analysing which risks will have the biggest impact on your project and how likely they are to happen. This then allows you to focus on those risks that are high impact / high likelihood.
Risk Management
Follows on from analysis. There are several ways to manage risks (note that ignoring a risk is not an option!)
These three activities can be done as part of a group in a Risk Workshop, or on smaller projects in discussions with the Project Manager and Sponsor.
- Prevention: What can you do to stop the risk altogether (e.g. by doing things completely differently) or completely prevents it from having an adverse impact on the project or the Council. For example, you may be able to dig a tunnel rather than build a bridge to prevent the risk of a bridge collapse in high wind.
- Reduction: What can you do to reduce the chance of a risk happening, or if it did happen, how can you reduce the impact on the project. For example, training users to operate systems.
- Acceptance: Where the Project Board/Sponsor decides to proceed with the project and accept the possibility that the risk might occur. This decision is always made in the belief that the risk will not occur or that the counter-measures are too expensive. For example, an earthquake affecting a building is a definite risk but unlikely in the UK. The likelihood of this occurring compared to the cost of prevention would mean the risk would usually be accepted.
- Contingency: What actions can you plan (or the provision of financial resources) that will kick in when the risk occurs.
- Transference: What can you do to transfer the risk to a third party. For example, two basic forms of transference would be insuring against the risk or invoking penalty clauses against suppliers.
Once you have selected an appropriate response to a risk, you should add this information to your risk register and then move on to
- Resources: Who will manage the risk. This needs to be one person. This person has to have the authority to be able to mange the risk within the organisation.
- Monitor: Keep an eye on developments regarding the risk for the early warning signs that it is developing.
- Control: When necessary, ensure the events in a plan actually happen
The next section introduces Project Planning. Whilst you are producing the various project plans, this may highlight new project risks so don't forget to analyse these and add them to your risk register.
Downloads
The Risk Register is a place you can record and track any risks and their implications to your project (28.5 KB)
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