Do you have a Risk Management Plan (RMP)? If you do not, then this article is not for you. If you are managing a project of any size and you have not developed a Risk Management Plan, then your project is most likely already in trouble.
If your answer is yes, then you may want to continue reading this article. Many people talk about and also attempt to develop a Risk Management Plan but either give up on it or place the effort in the low-priority to-do list. Others have a risk plan that does not actually provide the guidance and value that is needed to be effective.
Because the maker of the RMP did not give it the attention it deserves, it is usually thrown together without any real in-depth research, just to say that it was done. Like the son that was told to clean his room. When his mother checked it, the room was cleaned. But she later discovered that everything was piled high in the closet, out of sight and out of mind. It is important for the project manager and team to view the plan as something that can provide lifelong project value. All too often, project teams develop a Risk Management Plan because everyone says they should. It may be part of a methodology or a requirement within a Project Management Office (PMO) and is given cursory attention, something like punching a ticket or checking something on a list. Or they may have just passed the Project Management Professional (PMP) exam and know they need to have an RMP. So they do one! Why? To report that they have one and they can now tick that off of their checklist.
So, if you have an RMP, I give you my top ten reasons why you should trash that plan. Take a look at these and reflect on them.
Risk management is one of the nine knowledge areas of the Project Management Body of Knowledge (PMBOK®). Every management template includes an area to provide information about risk. Several books and articles have been written on the subject of risk management. Here are a few good books on risk management that you may want to read or add to your library:
- Risk Management, Rita Mulcahy
- The Practice Standards for Risk Management, PMI
- Project Management a Systems Approach, Harold Kerzner
From a global perspective, more organizations are putting emphasis on risk management to assist in reducing the number of reported project failures. A well-developed Risk Management Plan should mitigate the risk for project failure.
For example, listed in the table below are the results of a poll from our project management website, allPM.com. In that poll, we asked for the top five documents needed for project success.
As shown in the table above: The Risk Management Plan and Log is one of the top five documents needed for project success. Having a Risk Management Plan for your project is not optional; it is a necessity for the overall project success. The guideline and methodology we recommend for risk management is derived from the Project Management Body of Knowledge (PMBOK). In this article, we discuss some of the concepts regarding the creation and management of a Risk Management Plan.
Here are some ideas for creating and maintaining a good Risk Management Plan (RMP). You should start developing your Risk Management Plan during the early feasibility study. The RMP should be elaborated during the business case development process. Highlights of the RMP should be included in the development of the project description document and the project charter. The final RMP should be a part of the overall Project Management Plan.
A good Risk Management Plan and execution of that plan requires most of the team members to be involved. Collectively, the team will identify, analyze and develop the components of the Risk Management Plan.
A good outline of the PMBOK’s Risk Management Plan structure is shown in Figure 1.
I recommend a risk management plan be developed and acted on throughout the life of the project.
Here are the Top Ten Reasons to Trash Your Risk Management Plan