Risk management plan
What is a Risk Management Plan?
A risk management plan is the plan which is created to help to manage potential risks which may affect an organisation, business or event. The plan itself is a formal document which shows that organisations strategies for dealing with uncertain events or outcomes, be they positive or negative. This plan can be referred to if the event does occur.
What is a Risk Management Plan like?
A risk management plan is like a plan for a long journey. Before you set off, you will need to make sure that you have everything you need for the road ahead, and you will need to check that your vehicle is in good working order. If you realise that something could go wrong, it is better to prepare before you set off, in case it does happen, then you will be able to avoid the problem, or overcome it quickly and carry on along your way without too much trouble.
What is the purpose of Risk Management Plan?
The purpose of a risk management plan is to provide documentation of the risk management processes and treatments which an organisation is using to address potential risks. Most risk management plans include a risk assessment matrix, which can be used to show potential risks and what effects those risks could have on an organisation.
What are the different types of Risk Management Plans?
A-CAT plans – “Avoid, Control, Accept, Transfer”- these plans outline the four main potential strategies for dealing with risks.
SWOT plans – “Strength, Weakness, Opportunity, Targets” – These plans accept that risks can also be opportunities and developed management strategies with this in mind.
What’s involved with developing a Risk Management Plan?
In order to develop a risk management plan, an organisation must begin by setting the context of their organisation, and therefore the context of their risk. Once this has been done, they are then able to begin to identify and analyse potential risks. When the risks have been identified, analysed and thoroughly evaluated, it is common to begin compiling them into a formal document, along with information on how to implement risk treatments. The risk management plan stands as a formal document to show the steps of the risk management process.
Where does a Risk Management Plan fit into the risk management process?
A risk management plan can be created right at the beginning of the risk management process, or it may be formally codified once the risks have been identified and evaluated, and after an action plan has been decided upon. It is possible that the risk management plan could be changed during the monitoring and reviewing stage of the risk management process.
How does the Risk Management Plan impact on achieving organisational goals?
Having a good risk management plan will have a very positive impact on attempts to achieve organisational goals. A risk management plan will help to overcome problems which may get in the way of achieving organisational goals, for example a plan can help to keep costs low and ensure that goods will be delivered on time by having a contingency plan for financial and operational risks.
What terms are used in a Risk Management Plan?
Risk – An event or problem which may or may not occur.
Probability – The likelihood of the risk occurring.
Cost – The impact that a risk could have on an organization.
Treatment – A method of reducing or removing an identified risk.
Monitoring – A part of the process where the plan is evaluated and reviewed