Assumptions and Risks

Assumptions are factors that we rely on to be in place for expected results to be achieved successfully. These assumptions can be internal or external to the organization. These may include donor funds, stakeholder participation etc.

Risks are factors or events that can potentially impede the succesful achievement of the planned results. Risks can be fully or partially outside the control of the program and can also include internal or external.

Just like results, risks can also be monitored using indicators using a risk matrix.

Risk Management Plan

The risk management framework defines the project risk management plan when the project is initiated. The risk management plan includes the following definitions and guidelines:

• List of possible risk sources and categories
• Indicators for monitoring the risks
• Impact and probability matrix - likelihood the risk will occur and the anticpated impact.
• Risk reduction and action plan
• Contingency plan

Risk Identification

Risks are to be identified and dealt with as early as possible in the project. Risk identification is done throughout the project life cycle, with special emphasis during the key milestones. Risk identification is one of the key topics in the regular project status and reporting meetings. Some risks may be readily apparent to the project team—known risks; others will take more rigor to uncover, but are still predictable. The medium for recording all identified risks throughout the project is the risk register, which is stored in the central project server.

Risk Impact and probability matrix

Probability of Risk Occurrence

• High probability – 80 - 100%
• Medium-high probability – 60 - 80%
• Medium-Low probability – 30 - 60%
• Low probability 0 - 30%

Risk Impact

• High – Catastrophic (Rating A – 100)
• Medium – Critical (Rating B – 50)
• Low – Marginal (Rating C – 10)

Risk Response Planning

There may not be quick solutions to reduce or eliminate all the risks facing a project. Some risks may need to be managed and reduced strategically over longer periods. Therefore, action plans should be worked out to reduce these risks. These action plans should include:

• Risk description with risk assessment
• Description of the action to reduce the risk
• Owner of the risk action
• Committed completion date of the risk action

All risk action plans should be allotted to the person identified to carry out the action plan.

Risk assessment matrix

A risk matrix is a table with categories for probability (or likelihood or frequency) on one axis and with impact (or severity or consequences) on the other axis. The risk assessment matrix offers a visual representation of the risk analysis and categorizes risks based on their level of probability and severity or impact. This tool is a simple, effective way to get a holistic view of the project risks for all team members and key stakeholders.

Risk matrices can be used to prioritize and guide resource allocations in different standards and is spread through areas of applied risk management including enterprise risk management.

Example of a risk assessment matrix (Raydugin, 2014)