The general approach to managing risk on the project Methodology Describe the methodology or approach to the risk management

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The general approach to managing risk on the project Methodology Describe the methodology or approach to the risk management. This includes any tools, approaches, or data sources that will be used. Roles and responsibilities Document the roles and responsibilities for various risk management activities. Risk categories Identify categorization groups used to sort and organize risks. These can be used to sort risks on the risk register or for a risk breakdown structure, if one is used. Risk management funding Document the funding needed to perform the various risk management activi- ties, such as utilizing expert advice or transferring risks to a third party. Also establishes protocols for establishing, measuring, and allocating contingency It plan and management reserves. Frequency and timing Determine the frequency of conducting formal risk management activities and the timing of any specific activities. Stakeholder risk appetite Identify the risk thresholds of the organization(s) and key stakeholders on the project with regard to each objective Risk tracking and audit Document how risk activities will be recorded and how risk management pro- cesses will be audited Definitions of probability Document how probability will be measured and defined. Include the scale used and the definition for each level in the probability scale. The probability definitions should reflect the stakeholder risk appetite. For example: Very high = there is an 80 percent probability or higher that the event will occur High = there is a 60-80 percent probability that the event will occur Medium = there is a 40-60 percent probability that the event will occur Low = there is a 20-40 percent probability that the event will occur Very low = there is a 1-20 percent probability that the event will occur Definitions of impact by objective Document how impact will be measured and defined for either the project as a whole or for each objective. The probability definitions should reflect the stake- holder risk appetite. Include the scale used and the definition for each level in the impact scale. For example: Cost Impacts: Very high = overrun of control account budget of >20 percent High = overrun of control account budget between 15-20 percent Medium = overrun of control account budget between 10-15 percent Low = overrun of control account budget between 5-10 percent Very low = overrun of control account budget of <5 percent Probability and impact matrix Describe the combinations of probability and impact that indicate a high risk, a medium risk, and a low risk and the scoring that will be used to prioritize risks. This can also include an assessment of urgency to indicate how soon the risk event is likely to occur.