Monday, November 10, 2008

Outputs of Risk Management Planning

Do you know where to begin when it's time to identify your projects' risks? You should review the outputs of other project management processes before risk identification begins. The other project management processes are the risk management plan and other planning outputs.

The risk management plan
One of the planning outputs that you should review before identifying risks is the risk management plan. You should review the risk management plan because this is the document that describes how risk management activities for the project will be performed. It describes how risk identification, qualitative and quantitative analysis, response planning, monitoring, and control will be structured and performed during the project life cycle.

Lulu, a project manager at Beacon Corporation, develops a risk management plan for the Smart-Mart department store development project. The Smart-Mart risk management plan describes how Lulu and her team will approach an examination of the risks involved with this development and how they might address these risks. Lulu makes certain that the plan is comprehensive because she knows that it will serve as a guideline for risk management throughout the project's life cycle.

In the risk management plan, Lulu doesn't focus on the responses that will be taken for specific risks on the Smart-Mart project. Instead, it is a holistic overview of the risk management approaches that Lulu and her team will use for the Smart-Mart project.

Other planning outputs
There are eight categories of other planning outputs.
  • project charter - The project charter is a document issued by senior management that formally authorizes the project. It provides you with the authority to apply organizational resources toward project activities.
  • work breakdown structure (WBS) - The WBS is a grouping of the project elements that organizes and defines the total work scope of the project, based on deliverables.
  • product description - The product description is a list of the features and functions of the product.
  • schedule and cost estimates - Schedule and cost estimates are estimates of likely dates and costs involved with your project.
  • resource plan - The resource plan is a description of the people, equipment, and materials needed to perform project activities.
  • procurement plan - The procurement plan is the information about what needs to be purchased and when it needs to be purchased in order to carry out your project successfully.
  • assumptions lists - An assumptions list contains the factors that are considered givens for your project.
  • constraint lists - A constraint list contains the restrictions that will affect when your project activities can be scheduled.
After Lulu reviews the risk management plan, she examines the other planning outputs she should review as inputs to risk identification for the Smart-Mart project. First, she reads the Smart-Mart project charter. She thoroughly examines the human resources and the budget that have been allocated for this project because these two variables will have a significant impact on the way she manages the project. She also examines the WBS to see who should be doing what and the dates when each step should be completed.

Lulu notes the description of the Smart-Mart development. She wants to present the client with the exact building and layout requested. The schedule and cost estimates are clearly outlined on a graph that Lulu posts on a wall in her office and on a wall of the management trailer on the construction site.

Lulu examines the resource plan to see which Beacon employees should be placed in management positions for this project and to place accurate requests for building materials and supplies.

Lulu also reviews the procurement plan for Smart-Mart. This plan outlines what building and software materials will need to be purchased by specific dates. This will help Lulu place the orders on time and keep development moving at an acceptable rate.

The constraints list shows Lulu that lumber and concrete availability will affect when building activities can occur.

The fact that unionized construction workers receive a certain salary rate is a component of the assumptions list that Lulu examines.

The following list shows the name of each of the other planning outputs followed by the form they took in Lulu's project.
  • Project charter - human resources and budget
  • WBS - roles, responsibilities, and completion dates
  • Product description - building and layout
  • Schedule and cost estimates - available graph
  • Resource plan - management positions and building materials
  • Procurement plan - purchase materials
  • Assumptions list - employee salaries
  • Constraint lists - material availability
When Lulu reviews the project's other planning outputs, she familiarizes herself with all aspects of the project—such as scope, schedule, costs, and requirements—so that she can identify any areas that could be potential risks. Like Lulu, you will want to review the risk management plan and other planning outputs before you begin to identify risks. This process will make you more competent at risk identification.


daniel hirsch said...

Thanks,This blog giving us the information about the outputs of the risk management planning,which is very useful for us.

Risk Management

Abbey Ray said...

To manage the risk successfully one should have Pmp Proffessional s.With high competition, companies have to develop products fast and innovatively always adding value and greater customer satisfaction. it is important to learn and practice its basic principles which collectively and naturally help in effective management of risk. As a project manager i follow PMBOK guide of PMI