Execute the risk response plan(s)

Executing a risk response plan is an integral part of the project management cycle, particularly in relation to the PMI Risk Management Professional (PMI-RMP) examination. It involves identifying, assessing, and responding to project risks to reduce their potential impact on project objectives.

I. Risk Response Strategies

Risk response strategies fall into the following categories: avoid, mitigate, transfer, and accept.

1. Avoid: The objective is to alter the project plan to eliminate the risk or to protect the project objectives from its impact. It usually involves changing the project management plan. Example: If there is a risk that a required component may not be available from a supplier, one could choose another supplier or reduce the components needed.
2. Mitigate: The aim is to reduce the probability of occurrence or the impact of a risk to an acceptable threshold. Mitigation might involve developing an alternative solution or selecting the most effective approach to accomplish a project activity. Example: If there’s a risk of potential time delays, a project manager could mitigate that risk by arranging for additional resources.
3. Transfer: This is aimed at relocating the liability for a risk to another party. It doesn’t eliminate the risk, but it does shift the responsibility. Example: Insurance is a means of transferring risk where an insurer assumes the risk for a premium.
4. Accept: This means that the project team decides to acknowledge the risk and not take any action unless the risk occurs. This strategy is often used for risks with low impact and low probability. Example: Certain equipment might fail occasionally. If the potential delay isn’t too serious and the equipment can be quickly replaced or repaired, the team might choose to accept the risk.

II. Executing The Risk Response Plan

After the initial risk analysis, the risk response plan should be executed and monitored. Here are some key steps:

1. Implement Risk Responses: This involves executing the risk response strategy that has been planned for. This could include avoiding the risk, mitigating it, transferring risk, or accepting it.
2. Monitor Risks: According to the PMI, monitoring risks is an ongoing procedure that involves tracking identified risks, monitoring the remaining risk exposure, identifying new risks, and evaluating the effectiveness of the risk response plan.

III. Case Study: X Corporation

Let’s look at a practical example with X Corporation. X Corporation planned a new software implementation. They identified potential risks including delay in delivery, software bugs, and overrunning costs. The project team came up with the following risk responses:

• Delay in Delivery: They decided to mitigate this risk by scheduling more testing and integration time into the project plan.
• Software Bugs: The project team planned to both mitigate and transfer. Mitigation involved extensive quality control and testing. Transfer involved service level agreements (SLA) with the software development company for bug fixes and patches.
• Overrunning Costs: To avoid this risk, the project team decided to work with a capped pricing model with the software company. Capital expenditure was also closely controlled and monitored.

During execution, they were continuously monitoring and controlling these risks. Their planned responses were implemented and adjusted as needed, enabling the project to achieve its objectives.

In conclusion, executing the risk response plan is a systematic approach to assessing and addressing project risks. It forms an essential part of the PMI-RMP exam and assures project success in real-world scenarios. By understanding the strategies for risk response; avoid, mitigate, transfer, and accept – project managers are equipped with the tools they need to manage potential project risks effectively.