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Monday, 08 December 2008 16:56

Collaborative T&T to Build the Project Risk Plan – Risk Monitoring and Review Process (6 of 6)

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Risk Monitoring and Review closes the loop of the Risk Management Process, by creating a continuing process to review how the project’s risk exposure has changed, if at all, assessing the effectiveness of the risk response actions, and communicating the results of the risk management process to the project stakeholders. During the facilitated meeting, the participants create the Risk Communication Plan, to manage communication to the project stakeholders.

 

Risk Plan updates occur based on the frequency defined earlier in the Risk Definition Process. During the ongoing Risk Monitoring and Review effort, risk responses are continually reviewed for effectiveness and determinations are made deciding whether new responses are required, due to changes in probability / impact rankings, changes in project variables, or external circumstances. During the review meetings, participants also identify and assess new risks, to be managed, which are the beginning of the risk management loop. Secondary risks may occur, as a result of original risk responses, and additional risks may become visible, later in the project, that were not visible earlier. Workarounds are also created to address any unplanned / unmanaged risks that have occurred (problems / issues) that are identified.

The Risk Communication Plan is a deliverable built, during the facilitated meeting, to document the types of information to be communicated to the project stakeholders, throughout the project duration. This deliverable identifies each stakeholder requiring communication, their interest in the project, information required to be communicated, the purpose of providing the information to the stakeholder, frequency of reporting the information, and the format for reporting.

Summary - Critical Success Factors for Effective Risk Management


In summary, the Risk Management effort is not a one time activity on the project. It is required to manage the exposure, to the project objectives, that result from changes that are being introduced into the environment. The more people involved in identifying risks and developing responses to risks, the higher the likelihood of limiting unforeseen problems and issues that take the project off track, or impact the teams ability to succeed, on the project.

There are four Critical Success Factors that influence the effectiveness of a Risk Management Effort in an organization. 

•    CSF-001 Clear / Widely Accepted Definitions
•    CSF-002 Simple / Scalable Process
•    CSF-003 Appropriate Infrastructure to Support the Risk Process
•    CSF-004 Attention to Risk Attitudes

As organizations embrace CSF-001 (Clearly and widely accepted definitions) they accept the fact  that risk is related to uncertainty and, if it happens, the risk will affect a project objective. Organizations also realize that risk is different from problems and issues, which have already occurred,  and the culture shifts from rewarding / encouraging the firefighting to managing the risk. These organizations also recognize that a lack of clarity regarding risks produces confusion, inefficiency and wasted effort related to risk management.

As organizations adopt CSF-002 (Simple / Scalable Process) they incorporate the five processes, of risk management, into their methodology (Risk Definition Process, Risk Identification Process, Risk Assessment Process, Risk Response Identification Process, and Risk Monitoring / Review Process). The processes implemented are simple enough to meet the needs, of every project, recognizing that complex processes are avoided by project managers and perceived as overhead and cost drivers, with minimal value.

As organizations achieve CSF-003 (Appropriate infrastructure to support the risk process) they have achieved the right balance between a casual and a formal process, with the appropriate tools, techniques, resources and training required to support the process. With too little infrastructure, risk management is difficult to manage and repeat efficiently.  With too much infrastructure, risk management adds costs without value.

As organizations achieve CSF-004 (Attention to risk attitudes) they recognize the difference between, and identify themselves appropriately, as being risk averse, risk tolerant, risk neutral, or risk seeking. Risk averse organizations are uncomfortable with uncertainty and tend to identify many risks, as severe threats, requiring aggressive responses. Risk seeking organizations tend to be more relaxed about risk, with a higher threshold for accepting risk.


Collaborative Tools and Techniques to Build the Project Risk Plan – Overview (1 of 6)

Collaborative Tools and Techniques to Build the Project Risk Plan – The Risk Mgt Process (2 of 6)

Collaborative Tools and Techniques to Build the Project Risk Plan – Risk Ident. Process (3 of 6)

Collaborative Tools and Techniques to Build the Project Risk Plan - Risk Assessment Process (4 of 6)

Collaborative T&T to Build the Project Risk Plan – Risk Response Identification Process (5 of 6)

Collaborative T&T to Build the Project Risk Plan – Risk Monitoring and Review Process (6 of 6)



References

Project Management Institute. (2004) A guide to the project management body of knowledge (PMBOK) (2004 ed.).  Newtown Square, PA: Project Management Institute.

Hillson, David. (2004) Effective Opportunity Management for Projects – Exploiting Positive Risk, New York, NY: Marcel Dekker Inc.

For more information on methods to close the gap on your projects between project management theory and practical tools and techniques to apply this theory, contact Solutions Cube Group at http://SolutionsCubeGroup.com




Read 14336 times Last modified on Monday, 07 December 2009 05:12
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