Risk Management Process

1. Risk Identification

Goal:

Detect and document potential risks that may affect the project objectives.

Steps:

• Document Review: Review project plans, contracts, requirements, and stakeholder expectations.

• Brainstorming: With team members, subject matter experts (SMEs), and stakeholders.

• SWOT Analysis: Identify internal and external risks through Strengths, Weaknesses, Opportunities, and Threats.

• Interviews/Surveys: Ask experts and stakeholders about risks they foresee.

• Checklists: Use historical data or organizational risk checklists to trigger risk ideas.

• Assumption Analysis: Review project assumptions and determine where uncertainty exists.

Output:

• A Risk Register with:

  • Risk ID

  • Description

  • Source (e.g., technical, legal, environmental)

  • Risk owner (person responsible for monitoring)

  • Initial assessment (optional)

2. Risk Assessment (Analysis)

Goal:

Evaluate the identified risks to prioritize them.

Two Levels:

A. Qualitative Risk Analysis:

• Probability (likelihood of occurrence) and Impact (severity if it occurs)

• Use a Risk Matrix (e.g., High/Medium/Low) to categorize.

• Rank risks based on severity (Risk Score = Probability × Impact)

B. Quantitative Risk Analysis (optional, for complex projects):

• Use numerical methods like:

  • Expected Monetary Value (EMV)

  • Monte Carlo Simulations

  • Decision Tree Analysis

• Useful when budgeting or forecasting is highly sensitive.

Output:

• Prioritized list of risks in the Risk Register

• Risk score, category, and analysis summary

3. Risk Response Planning

Goal:

Develop strategies to reduce threats and capitalize on opportunities.

For Negative Risks (Threats):

• Avoid: Change the plan to eliminate the risk.

• Mitigate: Reduce the probability or impact.

• Transfer: Shift the impact to a third party (e.g., insurance, outsourcing).

• Accept: Acknowledge risk without taking action (passive or with contingency plans).

For Positive Risks (Opportunities):

• Exploit: Ensure the opportunity happens.

• Enhance: Increase probability/impact.

• Share: Allocate opportunity with a partner.

• Accept: Do nothing but monitor.

Output:

• Risk Response Plan:

  • Strategy

  • Actions

  • Responsible party

  • Timeframe

  • Budget if applicable

4. Risk Monitoring and Control

Goal:

Track identified risks, reassess, and identify new ones throughout the project lifecycle.

Steps:

• Regular Risk Reviews: Weekly/monthly depending on the project size.

• Risk Audits: Evaluate effectiveness of response strategies.

• Performance Metrics: Track risk indicators and response execution.

• Update Risk Register:

  • Status (Active, Resolved, Escalated)

  • Changes in impact/probability

  • Lessons learned

• Trigger Conditions: Watch for signals that a risk is materializing.

Tools:

• Risk dashboards

• Change logs

• Status reports

Output:

• Updated risk documentation

• Resolved or newly identified risks

• Lessons learned log

📌 Sample Risk Register Table (Simplified)