1. |
There are various types of risks: |
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1.1 |
Business risks: influence entire company / organisation, e.g. changes in market conditions |
1.2 |
Project risks: influence entire project, e.g. no support from management |
1.3 |
Task risks: limited to a specific task, e.g. specific resource not available |
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2. |
Identify potential risks SYSTEMATICALLY, e.g. with regard to human resources, scope, etc. |
3. |
Evaluate each risk to determine whether it justifies action (risk grading). Do the evaluation with reference to PROBABILITY and IMPACT. |
4. |
Possible ways of dealing with risk: |
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4.1 |
Eliminate or prevent it (by removing the cause or following an alternative path). |
4.2 |
Reduce it (e.g. by following proven standards and by applying good project management). |
4.3 |
Transfer or remove it (by taking it out of the project completely or by shifting it to another party, e.g. via insurance.) |
4.4 |
Accept it as uneconomical to react on it. Take no further action. |
4.5 |
Accept it and put contingency plans in place to activate should the risk realise. |
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5. |
Adjust the project plan (for 4.2) or prepare action plans (for 4.5). |
6. |
Record the risks, grading and action plans in a risk statement |
7. |
The risks are monitored for the duration of the project. Should they realise, the necessary actions will be implemented. |
Impact versus Probability |
I
M
P
A
C
T |
Fierce |
10 |
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9 |
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High |
8 |
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7 |
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Medium |
6 |
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5 |
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Low |
4 |
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3 |
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Insig-
nificant |
2 |
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1 |
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0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
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Rare |
Unlikely |
Possible |
Probable |
Guarenteed |
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PROBABILITY |
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1. |
Allocate a value to impact and probability. |
2. |
Look at where the two values converge on the table. |
3. |
The meaning of the colours in the table: |
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Colour |
Meaning |
Action |
White |
Low |
Record on risk log. Monitor status. |
Green |
Medium |
Record on risk log. Find out if the grading can be lowered
by, for example, following proven standards. Monitor status. |
Blue |
High |
Record on risk log. Identify costs as part of contingency
funds should the risk be realised. |
Grey |
Unacceptable |
Record on risk log. Take immediate steps to try and avoid
the risk. If it cannot be avoided, prepare an action plan for in
case it realises. The potential costs of this action plan must be
indicated as contingency funds. |
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4. |
NB! The action taken to address the risk must correspond
with the probability and impact of the risk should it realise. |
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