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Many times it so happens that a project is delayed or needs extra money to be pumped in by the organization to complete the work. However, after completing the project when the organization perform the post mortem, they see that many of the reasons to cause such problems can be avoided by proper advanced planning; i.e. by adopting the risk management principles. Risk management plan is a plan that identifies the future risks and prepares the contingency plan to deal with them. Many professionals think that this plan is a separate and isolated plan; however, this is a wrong assumption. Risk management plan is the integral part of the project management plan and it is developed along with it. This plan defines the guidelines that how you will identify the project risks and techniques to manage them. Objective of this plan is to minimize the impact of the threats and increase the probabilities of opportunities. Three steps are required to develop the project risk Management plan. These steps are as follows: First step is to identify the project risks. Here, you will take help from your team members. You will call them to sit together and identify the project risks. After it, you will go to other project stakeholders to get some more risks. There are many tools and techniques are available for this purpose; e.g. brainstorming, checklist analysis, facilitated workshop etc. You will also go through the old lesson learned documents for any previous similar project completed by your organization. Once you complete this step, you will note all these information into the risk register. In second step, you will analyze all identified project risks. This step is required so that you could rank and prioritize the risks. It will help you a lot to prepare the contingency plan to manage them. Here, you will determine the probability of happening the risks and its impact and then you will rank and prioritize these risks. Risk analysis is a people oriented process and in this process you ask the experts about their opinions. Sometimes, experts can you the biased opinions. Therefore, you have to be very careful while considering their opinions into the risk analysis calculations. After completing this process, you will again update the risk register. In third and final step, you will plan the responses to manage the identified risks. Risks can be divided into two categories; i.e. opportunities and threats. You have to plan response strategies for both type of risks. Some common strategies are as follows: Accept: Here, you simply accept the risk. You decide to manage this risk at the moment it happens. This type of strategy can be applied with both types of risks; e.g. threats and opportunities. Avoid: In this strategy, you try to escape the risk. You change the project plan or the scope of the work so that this risk could be avoided. This strategy is used with the threats. Mitigate: Here, you will create a strategy to deal with the risk so that the effect of the risk could be minimized. This type of strategy is used with the threats. Enhance: In this type of strategy, you try to increase the probability of happening the event so that you could realize it. This strategy is used with the opportunities. The project risk management is an iterative process and you have to continuously look for any new risks throughout the project life cycle. If you find any new risk then you have to repeat all these processes again as described in this article to manage the newly identified risk.
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