Risk Management Strategy

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Risk management strategy|
On implementing new testing capabilities|
Shashank Josyula 10011074|

Contents
1.Introduction2
2.Risk management strategy2
2.1.Identification3
2.2.Assessment3
2.3.Planning4
3.Probable risks to the project5
4.Probability Impact Grid6
5.Probability Impact Grid Criteria definition table6
6.Plans to mitigate risks7
7.Conclusion8

1. Introduction
This document is a project risk management strategy to identify, evaluate and put in place plans to reduce or prevent the negative impacts of any risks that would arise during the course of the project to implement an off-aircraft testing facility for hydraulics and avionics at operating from Scone International airport. Furthermore, any opportunities that would arise as a result of these risks will also be exploited to meet the project’s aims swiftly and safely. The first step in any risk management strategy is to breakdown the elements of the required project and work on the potential risks from the ground up in an organised manner. A product breakdown structure of the project has been produced to facilitate this strategy and appended in appendix 1.

2. Risk management strategy
The most effective way to manage risk at all levels and phases of the project would be to use a single strategy across all the levels. That single strategy includes planning across all the levels of the project and, as a first step, identifying potential risks. Most effective planning strategy is to use SMART objectives: * Specific

* Measurable
* Achievable
* Realistic
* Time bound (Thanet District Council, 2012).

3.1. Identification
To identify these risks, documentation such as project planning and Project breakdown structures can be used as they give a greater insight into all the elements of the project. A combination of historical analysis, taking information and learning from past mistakes which could have been prevented with simple measures, and system analysis to identify bottlenecks is a good way to identify most of the risks faced by the project. The risks faced by the project would not only be limited to one physical aspect. These risks, not limited to, can be;

* Financial risks
* Strategic (planned) risks
* Legal risks
* Cultural (workplace or otherwise) risks
* Schedule risks
* Quality risks
* Resource risks
* External risks
* Scope of performance risks
* Viability risks
* Technological risks
* Political risks

3.2. Assessment
Now that the risks are identified, an important step is to gauge or asses their impact on all aspects of the project and their likelihood of recurrence. This helps in prioritising responses, especially with limited resources, to the most critical of the risks. The most common and widely used tool for assessing risks is the ‘Probability Impact Grid’. This is a simple grid with values for probability and impact on either axis. The identified risks can them be placed according to their probability of occurrence and the severity of their impact producing a score which is a multiple of their grid co-ordinates. As a rule, higher the number higher is the risk. Probability| 5| VHi| 5| 10| 15| 20| 25|

| 4| Hi| 4| 8| 12| 16| 20|
| 3| Med| 3| 6| 9| 12| 15|
| 2| Lo| 2| 4| 6| 8| 10|
| 1| VLo| 1| 2| 3| 4| 5|
| VLo| Lo| Med| Hi| VHi|
| 1| 2| 3| 4| 5|
Impact|

Risk Score(Probability x Impact)| RiskClassification| Action required| 15 - 25| High| Immediate action required|
8 - 14| Med| Action required ASAP|
< 8| Low| Monitor and action as required|

3.3. Planning
The main goal of this stage is to act upon the previous stages by preparing valid and effective managerial and procedural responses to remove the risk as soon as possible, ideally before it can have any impact on the project. Any action taken...
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