A risk management plan (RMP) describes the concepts and processes that guide program and project risk management planning and implementation. It is intended to provide a complete and uniform approach for identifying, analyzing, developing appropriate responses for, monitoring, and managing program and project risks throughout the life of the program and individual projects. The purpose of the RMP is to define and communicate the client's plan for proactive management and control of risks which have the potential to prevent or enhance the successful achievement of program and/or project goals and objectives. Internal and external stakeholders expect owners and contractors to have in place and follow a comprehensive, structured RMP which can anticipate, monitor, manage, and control risks that pose a threat to the successful delivery of the program/project scope, schedule, budget, and quality goals. Likewise, those stakeholders expect management to recognize and exploit opportunities which may actually improve the achievement of program and/or project goals and objectives.
Pegasus-Global has extensive experience in helping clients develop RMPs for executing their construction programs and projects. We work with clients to help develop RMPs that are organized around the following key elements:
- Risk Management Planning is the process of describing how to approach and conduct risk management activities. Risk management planning ensures that the level, type and visibility of risk management are commensurate with the nature and extent of program and project risks. Through planning, resource requirements for risk management are identified and the basis for evaluating and managing risks is defined. The risk management planning process is completed early during the program and project planning to ensure that risk resources are available and that risk standards can be effectively implemented.
- Risk Identification is the process of determining possible risks and opportunities that may materialize and impact (negatively or positively) the goals and objectives of the program and documenting their respective characteristics. Risk Identification usually occurs during scheduled risk assessment workshops, but may occur at other times. Parties that may contribute to identifying program and project risks include, but are not limited to engineering, project controls, program and project management, construction management, and contracting, as well as subject matter experts and program and project stakeholders. The primary output of risk identification is a program and project risk register.
- Risk Assessment involves a determination of the risk or opportumnity identified as to the likelihood of occurrence and an evaluation of the impact (or benefit) if a specific risk or opportunity materializes during the execution of the program or project. It is performed either in a formal workshop or immediately following a formal workshop. Risk assessments can be qualitative, quantitative, or a combination of both depending on the identified risks and risk assessment requirements in the RMP.
- Establishment of Risk Management Treatment Options (avoidance, mitigation or exploitation) for each potential risk or opportunity identified.
- Risk Monitoring and Forecasting is an on-going process throughout the execution of the program and projects to anticipate the materialization of a risk or opportunity which in turn will provide program and project management with the broadest range of treatment alternatives possible.
- Amending or Modifying the RMP continuously to maintain the its focus on those risks and opportunities which pose the most immediate and critical threats (or benefits) for goals and objectives.
- Reporting the Risk Status in a timely and comprehensive manner.