PLANNING STAGE (RISKS) : PLAN RISK RESPONSES

Plan risk responses is the last process of planning risks whereby different options and actions are developed to increase opportunities and to reduce threats to the project. It follows after performing quantitative risk analysis if used. Each risk response includes an owner who is responsible to address the risk as agreed upon all involved in risk management processes.

The inputs to refer are:

• Risk Management Plan which explains roles and responsibilities, risk analysis definitions, timing for elimination of risks when reviewed and risk thresholds.
• Risk register which explains the identified risks, root causes of risks, potential risk responses, owners of the risks, symptoms and warning signs, ratings, trends in qualitative analysis results etc

The process can be done by:

• Applying strategies for negative risks (threats). These are:
• Avoid – whereby the risk is eliminated from the project. It might require more information, more clarification about the requirements or more expertise to avoid such risk.
• Mitigate – whereby the probability of occurrence and impact of the risk is reduced. It is more effective to apply this strategy earlier than repairing the damage of the risk once occurred.
• Transfer – whereby the impact of the risk is shifted to a third party that will be given responsibility with the ownership of the risk response. One example is the use of insurance.
• Accept – whereby the risk is allowed to happen and no action is taken place unless the risk occurs.
• Applying strategies for positive risks (opportunities). These are:
• Exploit – whereby the risk is ensured to happen definitely. For instance, the use of new technology will reduce the cost and time for the project.
• Enhance – whereby the probability of occurrence of the risk to the project is increased like adding more resources to the activities.
• Share – whereby some of the ownership of the risk is allocated to the third party, one example is joint venture.
• Accept – whereby the risk is considered as an advantage once happens.
• Applying contingent response strategy whereby the response will only be executed under predefined conditions if there is a warning to implement it.
• Using expert judgement who can advice what actions should be taken on the defined risks.

The outputs of Plan risk responses are updated plans for schedule, scope, quality, cost, procurement, human resource management as well as other project documents such as risk register, assumption log and change requests.

References:

PMI (2013). A Guide to the Project Management Book of Knowledge (PMBOK Guide 5^th Ed.) USA, Project Management Institute

https://www.stakeholdermap.com/risk/risk-responses.html