Understanding Risk Management in Project Planning: Key Concepts and Tools (Full Transcript)

Speaker 1: Hello, I'm Jennifer Whitt, Director of ProjectManager.com. Well welcome to our whiteboard session today on what is risk management. A lot of people ask what it is and how often we do it, so today what we want to do is just take a few minutes to clarify what it is and how to do it. So first of all, I want to mention the triple constraint, so it's an important part of the project which talks about the scope, which are the deliverables or the product that we're producing as a result of the project, the cost or the budget of the project, the time or the schedule, and the components of quality, which again is referenced as the triple constraint. So throughout the project, different events occur, maybe things happening with scope or cost or changes in the schedule or quality occur that could introduce risk or vice versa. Different events can occur during, throughout the project that also can impact these components as well. So basically from a high level, when we talk about the project management plan, we know that the project management plan also has other plans, subplans in it as well, like the time management plan, scope management, budget, quality, the change management plan and issues management, but also the risk management plan is a subset or a subplan of the project management plan. So basically what is entailed in the risk management plan is the process. We want to know who needs to know, who can interject risk into the project, what's the process, when do we do it, how do we do it. So how, basically the who, what, when, how to manage risk on the project. We also look at tools. We identify what tool set we're going to use. So everyone on the project who needs to know or involved will know what tools to use. So we identify we're going to use project management software. Now a lot of the project management software available today are great with helping to assist in identifying and managing the risk. A lot of people still use Excel, so they have Excel where they have the logs and the registers and any kind of templates, the templates we may use to identify and evaluate the risk. So the activities included in the project management plan are identified here, but basically it's all the activities that we use to manage risk throughout the entire project. So what are some of those activities? So risk management, the risk management activities are about the activities to identify the risk. Like how do we go about identifying what documents or what things do we look at determining. When we do identify those risks, we want to determine what's the probability. What's the probability that this will happen and evaluating the impact. If it does happen to occur, what would be the impact to the project? Would it have a huge impact or is it just a small impact? And with that we plan the responses. So we document if these risk events do occur, then how will we respond to them? And then of course continuing to document and track those risks all along the project. So it's not just a one-time thing. It's important to keep them documented, keep them tracked. Are we doing these, getting them responded to promptly? And of course communicating those risks throughout the project to the appropriate members of the team. If you need a tool that can help you manage and track your risk on your project, then sign up for our software now at ProjectManager.com.