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• Risk Management
  • Introduction to Risk Management
  • Mandatory Process
  • Corporate Risk Management
• Risk Management Documents
  • Introduction to Risk Management Documents
  • Risk Management Terminology
  • Risk and Opportunity Management Strategy
  • Risk and Opportunity Management Plan
  • Risk Register
• The Four Stage Project Risk Management Process
  • Introduction to the Project Risk Management Process
  • Identify
    • Identify Stage
    • Categories of Risk
    • Project Areas Affected by Risk
  • Analyse
    • Analyse Stage
    • Qualitative Analysis
    • Quantitative Analysis
  • Plan
  • Manage (Implement)
• Opportunity Management
• Three Point Estimating and Confidence Figures
• Risk Management in Acquisition
  • Business Case Approvals
  • Optimism Bias
  • Contracting for Risk Management
  • Assurance
• Risk Tools
• Competences and Training
• Common Terms
• Contacts

Content

Introduction to the Risk Management Process

What is the Risk Process ?

The four stages of the Risk Process are detailed under this topic, at each stage the key activities and outputs are highlighted together with detail on the techniques and stakeholders involved. The four stages are:

• Identify Find, list and characterise elements of Risk.
• Analyse Prioritise identified Risks against agreed criteria.
• Plan Select and implement Risk Handling Options.
• Manage Implement, monitor, report and review Risk Management actions against objectives.

In order to obtain the maximum benefit from Risk Management, it needs to be implemented in a systematic and disciplined manner and as an iterative process as shown in this illustration.

Risk Management (RM) covers all those measures which have to be implemented in order to determine a reasonable and acceptable level of risk (Risk Appetite) and to manage a project so as to avoid exceeding that level.

For an overview of project Risk Management the Project Risk Process Guide [197KB PDF] provides further guidance.

Opportunity or Threat ?

The definition of a Risk includes both positive and negative consequences. The Iterative Process described above is equally applicable whether addressing the Opportunity (positive) or Threat (negative) side of Risk Management.

How is the Iterative Process carried out ?

Risk Management is at the very centre of acquisition. In order to be effective, it must be considered as an integral part of the project or equipment support management function, throughout the life of the project from Concept to Disposal.

Risk Management need not be overly complex and the level of effort to be applied must be in proportion to the cost, timescale and level of complexity of the project.

Accurate and detailed records must be kept in order to support present and future analysis.

Beware of varying terminology

Unfortunately, there is no single definition of the process or decomposition into separate stages that is globally accepted. Different variants are employed by various companies and organisations; some have three stages, others four, and there are examples of the same term having very different meanings.

In some organisations 'Risk Analysis' (rather than RM) is often encountered, and is divided into Identification, Assessment and Management; 'Risk Analysis and Management' is also sometimes equated with RM. 'Handling' is used by United States organisations instead of Management for the fourth stage. To avoid confusion and to aid a common understanding, a Risk Language has been developed for use within MOD projects and programmes.

Change History

Change History