Projects are by their nature dynamic and risks, as well as their ratings, will change as the project progresses. New risks, unidentified in the early stages, often emerge over time. Therefore, the project manager should review the Risk Management Plan (RMP) regularly and make changes and additions. The evolving RMP through the execution of a major project should be included as part of steering committee meeting papers. For all projects, a review of high risks, otherwise notable risks and changed risks should be specified in the Project Status Report.
A typical overview of the Risk Management Process outlined by the RMP is as follows:
- Establish the context: start the risk management process with a clear understanding of the operating environment. In establishing the context it is essential to identify and scope all influences (internal and external) which may reasonably impact your organization. The context includes financial, operational, competitive, political (public perceptions/ image), social, client, cultural and legal aspects of your organization’s functions.
- Identify the risks: look at possible risks from all sources that will impact on all stakeholders. Realise that unidentified risks may present major threats.
- Analyse the risks: do to provide an input to decisions on whether risks need to be treated and the most appropriate and cost-effective risk treatment strategies.
- Evaluate the risk: make decisions, based on the outcomes of the risk analysis, about which risks need treatment and treatment priorities.
- Treat risks: follow five options: avoid the risk, change the likelihood of the risk, change the consequences of the risk, share the risk, or retain the risk.
- Monitor and review: follow through with regular monitoring and reviewing and raise awareness as risks invariably change during the course of a project.
Opportunities may also be included in the above processes. A similar set of five options may be applied for treating risks with positive outcomes, that is, opportunities.
Note that an a separate Risk Management Plan is usually needed for all but the very small or limited scope projects.
Queensland University of Technology (QUT) is a highly successful Australian university with an applied emphasis in courses and research. Based in the city of Brisbane with a global outlook, it has 40,000 students, including 6000 from overseas, (QUT Statistics) and an annual budget of more than AU$500 million. Courses are in high demand and its graduate employment rate is well above the national average for Australian universities.