Manage Stakeholders: Inputs Manage Stakeholders: Tools and Techniques

11.1 Risk Management Planning

Careful and explicit planning enhances the possibility of success of the five other risk management processes. Risk Management Planning is the process of deciding how to approach and conduct the risk management activities for a project. Planning of risk management processes is important to ensure that the level, type, and visibility of risk management are commensurate with both the risk and importance of the project to the organization, to provide sufficient resources and time for risk management activities, and to establish an agreed-upon basis for evaluating risks. The Risk Management Planning process should be completed early during project planning, since it is crucial to successfully performing the other processes described in this chapter. Figure 11-3. Risk Management Planning: Inputs, Tools Techniques, and Outputs

11.1.1 Risk Management Planning: Inputs

.1 Enterprise Environmental Factors The attitudes toward risk and the risk tolerance of organizations and people involved in the project will influence the project management plan Section 4.3. Risk attitudes and tolerances may be expressed in policy statements or revealed in actions Section 4.1.1.3. .2 Organizational Process Assets Organizations may have predefined approaches to risk management such as risk categories, common definition of concepts and terms, standard templates, roles and responsibilities, and authority levels for decision-making. .3 Project Scope Statement Described in Section 5.2.3.1. .4 Project Management Plan Described in Section 4.3. A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 242 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA

11.1.2 Risk Management Planning: Tools and Techniques

.1 Planning Meetings and Analysis Project teams hold planning meetings to develop the risk management plan. Attendees at these meetings may include the project manager, selected project team members and stakeholders, anyone in the organization with responsibility to manage the risk planning and execution activities, and others, as needed. Basic plans for conducting the risk management activities are defined in these meetings. Risk cost elements and schedule activities will be developed for inclusion in the project budget and schedule, respectively. Risk responsibilities will be assigned. General organizational templates for risk categories and definitions of terms such as levels of risk, probability by type of risk, impact by type of objectives, and the probability and impact matrix will be tailored to the specific project. The outputs of these activities will be summarized in the risk management plan.

11.1.3 Risk Management Planning: Outputs

.1 Risk Management Plan The risk management plan describes how risk management will be structured and performed on the project. It becomes a subset of the project management plan Section 4.3. The risk management plan includes the following: 11 • Methodology. Defines the approaches, tools, and data sources that may be used to perform risk management on the project. • Roles and responsibilities. Defines the lead, support, and risk management team membership for each type of activity in the risk management plan, assigns people to these roles, and clarifies their responsibilities. • Budgeting. Assigns resources and estimates costs needed for risk management for inclusion in the project cost baseline Section 7.2.3.1. • Timing. Defines when and how often the risk management process will be performed throughout the project life cycle, and establishes risk management activities to be included in the project schedule Section 6.5.3.1. • Risk categories. Provides a structure that ensures a comprehensive process of systematically identifying risk to a consistent level of detail and contributes to the effectiveness and quality of Risk Identification. An organization can use a previously prepared categorization of typical risks. A risk breakdown structure RBS Figure 11-4 is one approach to providing such a structure, but it can also be addressed by simply listing the various aspects of the project. The risk categories may be revisited during the Risk Identification process. A good practice is to review the risk categories during the Risk Management Planning process prior to their use in the Risk Identification process. Risk categories based on prior projects may need to be tailored, adjusted, or extended to new situations before those categories can be used on the current project. A Guide to the Project Management Body of Knowledge PMBOK ® Guide Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA 243