Pre-Construction

Online Guide

Work the Plan

Process

Activity:

Manage Risks

Revision

July 1, 2005

Description:

Risk Management is an integral component of day-to-day project management. Project teams implement and continuously upgrade the Risk Management Plan throughout the project.

Primary Risk Management functions include:

·         Monitoring risk and opportunity elements

·         Identifying new risk and opportunity elements

·         Evaluating/upgrading probability of occurrence and potential impacts

·         Devising and implementing response strategies

·         Evaluating and documenting the effectiveness of response actions

·         Reporting to Region/Organization Management and Stakeholders

Inputs:

·         Endorsed Project Management Plan

-        Risk Management Plan

-        Project Performance Baseline

Tools:

·         Sample Risk Management Plan

·         WSDOT Cost Risk Estimating & Management

Steps:

1.      Implement and Manage the Risk Management Plan:

·         Brief each team member on the Risk Management Plan and the criteria for the execution of their responsibilities.

·         Risk reviews should be a standing agenda item at all team meetings.

·         Maintain the Risk Management Plan and adjust risk responses as appropriate to provide visibility and understanding of current project conditions, status of Risk events, and the potential overall impact on the Project Performance Baseline.

·         Report the status of the Risk Management Plan to Region/Organization Management.

2.      Monitor and Control Potential Risk Events:

·         Assign a team member to monitor and track each risk event according to the Risk Management Plan.

·         Risk ratings and prioritization may change over the life of the project; changes may require additional analysis.

·         Identify and report changes in probability of occurrence and potential impact.

3.      Identify and Evaluate New Risk Elements:

·         Charge team members with the responsibility to continuously review project work and conditions and to identify new risk events.

·         Add new risk events to the Project Management Plan and evaluate their probability of occurrence, potential impact, and timing.

·         Identify appropriate triggers.

·         Establish preliminary response strategies and, in keeping with Monitor and Control Risk Events (above), monitor and control each new risk event.

4.      Implement the Risk Management Plan when Risk Events Occur

As Risk events reach the “imminent” stage:

·         Review the planned response actions for appropriateness given current estimates of impacts and available resources.

·         Use the Change Management process to enact and implement response actions and adjust the Project Performance Baseline—scope, schedule, and budgets—accordingly.

·         Make appropriate assignments and track performance of the response actions.

·         Monitor the effectiveness of each response action and adjust actions accordingly.

·         Document each risk event and response action implemented as a basis for future actions and as a reference for reporting Lessons Learned.

5.      Manage Risk Response Resources

·         Contingency Funds are the “last resort” and are used only after all other means for Abatement, Avoidance, or Mitigation of risks have been exhausted.

Avoid the simple measure of percentage of project completion compared to contingency funds committed. Risk events do not occur evenly throughout the project.

Products:

·         Progress Reports

·         Response Strategies

Guidelines:

N/A