By applying a mitigation plan, we reduce the probability of impact of the identified risk. By identifying the contingency plan, we do not change the probability or impact of the current risk, but we plan to control the impact as risk event looks like occurring. This works as a fallback plan for high exposure risks.
Project risk management is perhaps the least understood—and most effective—tool project managers can employ to increase the odds of project success. When implemented correctly, project risk management not only boosts the probability of success, but it also alleviates anxiety and offers a higher degree of predictability. Over the last decade, project risk management has become the backbone of organizations, which successfully deliver projects, and in the current period it is absolutely essential to the success of a project.
According to A Guide to the Project Management Body of Knowledge (PMBOK@ Guide) (Project Management Institute [PMI], a risk is an uncertain event that, if it occurred, has an effect on at least one project objective. The first and foremost thing to note is that risk is an event that has not happened yet but could happen in the future. Therefore, when we talk about risk we are talking about the future, not the present or the past. Therefore, if an event has already occurred or is already occurring it cannot be called a risk. This kind of event would be classified as an “issue” or “problem.”
Answer the following questions:
1.1 What is the difference between risk mitigation and contingency planning? What must the contingency plan include?
1.2 What should be included in a risk management plan?