Project Risk Management
Assumptions, constraints, risks and opportunities
The Project Risk Management section does not differ too much from the "Risk Management" section of the project charter. The only distinction is that by the time the project reaches the planning stage some of the assumptions, risks and constraints have either materialized or become obsolete. On the other hand, new risks could have been identified during the project progress from the initiation to the planning stages and need to be recorded.
Furthermore, there are two schools of thought on whether old but still valid assumptions, constraints and risks should be transferred from the project charter to the project plan. Some organizations think that if they have already been mentioned in the project charter they shouldn't be copied into the project plan. This document, according to this particular philosophy, must contain only new assumptions, constraints and risks.
The other school insists that in reality once the project plan is written, people rarely return to review the project charter. Hence, they argue, all relevant risk management factors must be restated in the project plan.
It is entirely up to the readers to decide which option is more applicable to them, but in the author's opinion the second alternative is indeed preferable, simply because people typically prefer to keep track of one document rather than two.
Assumptions
Include several (but no more than 5 or 6) assumptions in the table such as shown in Figure 5. Assumptions are typically "good" things that are supposed to happen on your project, but you are not entirely sure that they will indeed happen.
ID |
Description |
A1 |
"We assume that all the resources required for the successful delivery of this project will be available" |
A2 |
"We assume that the sub-contractor involved on the project shall be able to complete the bridge painting by the deadline indicated in the project schedule" |
Figure 5: Sample assumptions
Constraints
Constraints are those certain things that constrain your options with respect to the successful delivery of the project's products or services. They typically, but not exclusively, include deadlines, budgets, availability of resources, etc.
Include several (but no more than 5 or 6) constraints as shown in Figure 6.
ID |
Description |
C1 |
"Project budget was capped at $300,000" |
C2 |
"Only one senior architect shall be available to perform work on design documentation" |
Figure 6: Sample constraints
Risks and opportunities
Risks are the uncertain things that can jeopardize the project's success. However, risk events often give rise to opportunities that should be grasped whenever possible. It is also desirable to add the planned responses for each of the risks/opportunities. Include several (but no more than 5 or 6) risks and opportunities and their planned responses as suggested in Figure 7.
ID |
Description |
Tentative response |
R1 |
"There is a possibility of major contractor's employees going on strike" |
Shut down the job and secure all equipment and materials |
R2 |
"The municipality may require additional environmental clean up resulting in an increase in project cost and timeline" |
Process a change order through the project's sponsor |
O1 |
In the event of a strike and site shut down |
Depending on the timing, it may be possible to prefabricate parts off site. |
Figure 7: Sample risks and opportunities entries
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Project Cost Management - Budget
