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Risk Management Planning Process

The process of risk management is all about pointing out, evaluating and taming the threats to an organization’s resources and benefits. It involves controlling the threats and being in control to avoid making losses. This case study looks at the process of risk management and the terms that are relevant to the process. Different terms are used in the risk management process such as Likelihood which means the probability of something happening. Risk which means the consequences of the unknown to the goals and objectives. Level of risk which basically means the magnitude of the risk according to the probability and effects on the objective and resources of the organization. Project Risk Register which means a document with the records of the risk management process. Risk treatment is another term used in this process which is about modification of the risk (Government, 2018).

There are five steps that are followed in the risk management process. Identifying the risk is the first step. At this stage, the possible risks are pointed out and listed down. They are also discussed or explained to the team members. The risks are the ones that might interfere with the process of the project and the benefits of that project (Kloosterman, 2016). Different techniques are implanted to identify the possible risks. For example, interviewing; interviewees are asked questions that bring out the opinions of different people hence identifying the possible risks. After the interview, the team members can interact and consult with the stake holders about those risks. This helps with clarity about the level of the risk. The other tool that can be used is brain storming. It is considered one of the best tools to use. People work together to write down the possible risks together with their causes and possible treatment (Harb,2009). At this stage preparation for the Project Risk Register start.

The second step is analyzing the risk. After identifying the potential risks, the team is supposed to evaluate the likelihood and effects of the risks. This should be done for each and every risk. The purpose of analyzing is to clearly comprehend the nature of the risk and how much it can affect or deter the goals and objectives of the project (Kloosterman, 2016). The technique of estimation is implemented here. It can be done through multiplying the probability of the event with the cost of events, which helps to get the value of the possible risk. This information is supposed to be recorded in the project risk register.

The next stage is about the evaluation of the risk. It can also be called risk assessment. This should do in accordance with the level of the risk in relation to the likelihood and the effects to the outcome of the project. The team decides whether the risk can be accepted and how serious it is. They also determine if that risk is serious enough to require treatment in the whole process. There are techniques that are used to assess risk. For instance, quantitative analysis. This involves assigning numbers to risks based on different reports on risks and the data gathered. The ranks of the risks are also recorded in the Project Risk Register (Dcosta, 2011).

Once the team has identified the risk, analyzed it and evaluated it, treating is then done. It is about responding to the risk. The team evaluates the highest risks and then plans on how to treat them. At this stage, there is also a modification of the risks to get to the acceptable risk levels. The team strives to minimize the negative risks (Kloosterman, 2016). Strategies for dealing with the risks are laid down not leaving out preventive plans and probability plans. Measures to deal with the high-level risks are also laid down and added to the Project Risk Register.

Reviewing and monitoring of the risk is then done. With the use of the Project Risk Register the team tracks and reviews the risks (Kloosterman, 2016). The purpose of this stage is to ensure that the measures are effective and efficient. It also helps gather information on the improvement of the process of evaluation. Reviewing also helps identify the changes that might have happened to the listed risks. In case of any risks coming up they are identified in the stage of reviewing and monitoring. The progress on risk treatment is also captured (Australia, 2015).

References

Australia, R. M. (2015). Body of Knowledge Domain 5 Monitoring & Review.

Dcosta, A. (2011). An Overview of Project. Bright Hub Project Management.

Government, A. (2018). Risk Management Glossary of Terms. Treasury.

Harb, T. (2009). Risk Identification Made Simple. In Consult.

Kloosterman, V. (2016). What are the 5 Risk Management Steps in a Sound Risk Management Process?