How to Develop a Risk Management Plan

Developing an effective risk management plan can help develop small issues in emergencies. Different types of risk management schemes can deal with the calculation of the possibility of an event, and how this event can affect you, what are the risks with some risks and how to reduce the problems associated with these risks. Having a plan can help you deal with adverse situations when they get up, and hopefully turn them off before getting up.

STEP 1 Understand how Risk Management works.

Risk is the effect of events in an event or series (positive or negative) that occurs in one or more places. It is calculated from the probability of the possibility of becoming an issue and its effect (calculated risk = probability x effect). Different factors should be identified to analyze the risk, including:

Incident: 

What could be?

Probability: How likely is it to happen?

Impact: How bad will it be if it happens?

Mitigation: How can you reduce the Probability (and by how much)?

Contingency: How can you reduce the Impact (and by how much)?

Reduction = Mitigation X Contingency

Exposure = Risk – Reduction

After identifying the above, the result will be what is called exposure. This is the risk that you can not easily escape. Exposures can also be referred to as Threat, Liability, or Severity, but they mean much more the same thing. This will be used to help determine whether planned activity should be done.

This is often a simple cost versus profit formula. You can use these elements to determine whether the risk of applying change is more or less than the risk of not implementing the change.

Took risk If you decide to move forward (sometimes there is no substitute, such as a mandatory change of fade) then your exposure becomes that which is known as osmosis risk. In some environments, the risk assumed is reduced to the value of a dollar which is then used to calculate the profitability of the final product.

STEP 2 Define your project.

In this article, let’s show that you are responsible for a computer system which does not provide important (but life-critical) information to a large population. The main computer on which this system resides is old and needs to be replaced. Your task is to develop a risk management plan for migration. This would be a simplified model where the risk and impact is listed as high, medium or low (which is especially common in project management).

STEP 3 Get input from others.

Brains on Risks Meet many people who are familiar with the project and ask for input on whatever may happen, how to help stop it, and what to do if this happens. Take a lot of notes! You will use the output of this important session several times during the following steps. Try to keep an open mind about ideas. Thinking “out of the box” is good, but keep control of the session. It needs to focus and stay on target.

STEP 4 Identify the consequences of each risk.

With your brainstorming session, you collected information about what would happen if risky. Associate each risk with the results that come during that session. Be specific as possible with each one. “Project delay” is not as desirable as “project will delay up to 13 days.” If there is a dollar value, list it; Just saying “over budget” is very common.

STEP 5 Eliminate irrelevant issues.

If you walk, for example, the computer system of a car dealership, then the dangers like atomic warfare, plague epidemics or assassin asteroids are too much things that will inhibit the project. You can not do anything to plan for them or to reduce the impact. You can keep them in mind, but do not put such a thing on your risk plan.

STEP 6 List all identified risk elements.

You don’t need to put them in any order just yet. Just list them one-by-one.

STEP 7 Assign probability.

For each risk element in your list, determine whether the potential for physicality is high, medium or low. If you want to use numbers entirely, then consider the probability of the scale from 0.00 to 1.00. 0.01 to 0.33 = Low, 0.34 to 0.66 = Medium, 0.67 to 1.00 = High

Note: If the probability of an event is zero, then it will be removed from the idea. There is no reason to think about things that can not be done (T-Rex consumes a computer).

STEP 8 Assign impact.

In general, assign the effect as high, medium, or low based on some pre-established guidelines. If you want to use numbers entirely, consider the effect on the scale of 0.00 to 1.00 as follows: 0.01 to 0.33 = less, 0.34 – 066 = medium, 0.67 – 1.00 = high.

Note: If an event has zero impact, then it should not be listed. Regardless of the probability (my dog ​​ate dinner) there is no reason to consider things being irrelevant.

STEP 9 Determine risk for the element.

Often, a table is used for this. If you have used low, medium and high values ​​for probability and effect, then the top table is most useful. If you have used numeric values, then you have to consider some more complex rating system similar to the second table. It is important to note that there is no universal formula for the combination of probability and effect; It will vary between people and projects. This is just an example (together in real life):

Be flexible in analysis. Sometimes it may be appropriate to switch back and forth between L-M-H designation and numerical designations. You can use the same table as the table below.

STEP 10 Rank the risks.

List all the elements you have identified from the highest risk to the lowest risk.

STEP 11 Compute the total risk: Here’s where the numbers will help you. In Table 6, you have 7 risks in the form of H, H, M, M, M, L and L. This table can translate from 5 to 0.8, 0.8, 0.5, 0.5, 0.5, 0.5, 0.2 and 0.2. The average total risk is 0.5 and it turns into medium.

STEP 12 Develop mitigation strategies.

Designed to reduce the chances of quenching that will generate a risk. Normally you will do this for only high and medium elements. You want to reduce low-risk items, but definitely address other people first. For example, if one of your risk factors is that the distribution of important parts may be delayed, then you can reduce the risk by ordering the project quickly.

STEP 13 Develop contingency plans.

Contingency is designed to reduce the effect if any risk increases. Then, you will usually only develop contingency for high and medium elements. For example, if important parts are not required on time, you may have to use old, existing parts, while you are waiting for new ones.

STEP 14 Analyze the effectiveness of strategies.

How much have you reduced the probability and effect? Evaluate your contingency and mitigation strategies for your risk and reassign effective ratings.

STEP 15 Compute your effective risk.

Now your 7 risks are M, M, M, L, L, L and L, which translate to 0.5, 0.5, 0.5, 0.2, 0.2, 0.2 and 0.2. This has an average risk of 0.329. Looking at Table 5, we see that the overall risk is now classified as the following. Basically the risk was moderate (0.5). After adding management strategies, your exposure is low (0.329). This means that you have achieved a reduction of 34.2% in risk through mitigation and contingency. not bad!

STEP 16 Monitor your risks.

Now that you know what your risks are, you need to determine how you know that they know what you know when and why you should put your contingencies. This is done by identifying the risk quas. Do this for each of your high and medium risk elements. Then, as your project progresses, you will be able to determine whether the risk element has become an issue. If you do not know about these signs, then it is quite possible that the risk can affect and affect the content quietly, even if you have a good contingency.

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