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Risk Management Approach

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PRINCE2 recommends that each project have its own Risk Management Approach document. This document defines the project procedures for risk management in terms of how risk will be identified, assessed, controlled, and communicated in the project. Another way to say this is: The risk management approach describes the specific risk management techniques and standards to be applied during the project, and the responsibilities to provide a good and consistent risk management procedure.

This might seem like a big task, but if your project is part of a program, then most of the risk management approach will already be provided to you in a detailed template that you can update to suit the project.

Timeline Risk Management Approach

PRINCE2 Management Products

Risk Management Approach Sample

Risk Management Approach Sample

Risk Management Approach contents

This is an example of a Risk Register and the layout is defined in the Risk Management Approach:

Risk Register Sample

Source data for the Risk Management Approach

Format of the Risk Management Approach

Quality criteria for the Risk Management Approach

Risk Management Process/Procedure

The Risk Management Procedure is a set of five steps that are recommended by PRINCE2. The first 4 steps are sequential, while Communicate will always be done to let stakeholders know what is going on and to get continual feedback during this process. Risk management steps:

  1. Identify: First complete the Risk Management Approach document for the project, and then identify the risks (threats and opportunities) that could affect the project.
  2. Assess: Assess the risks in terms of their probability and impact on the project objectives.
  3. Plan: Here, your Plan steps are to prepare the specific response to the threats (e.g., to help reduce or avoid the threat), or this could also be to plan to maximize the opportunity if the risk happens.
  4. Implement: Carry out the planned responses mentioned in step 3 Plan if the risk occurs.
  5. Communicate: Keep communicating to the stakeholders. Use existing management reports that are created during the project (e.g., End Stage Report).

Tips from Frank

discussion icon PRINCE2 wiki is open-source and published for free under a Creative Commons license.

discussion icon Written by: Frank Turley