24.3 Plan Risk Responses

	This is the process of developing actions to reduce threats and enhance opportunities.
	Hence it is important that risk responses are in compliance with the risk significance.
	In other words this process plans for how each risk will be managed, and who will be responsible for them.
	Inputs

		Risk management plan
		Risk register

Tools and techniques

		Basically tools and techniques used for planning risk responses can e categorized into three groups as follows:
		Strategies for negative risks or threats: there are three possible strategies for dealing with threats if they occur including:

Avoidance: this involves taking actions to reduce the probability of the risk and its impact to zero and hence involves changing the project management plan.

24.3 Plan Risk Responses

			Transfer: this involves transferring the risk to a third party to manage. Thus it doesn't eliminate the risk but transfers it liability to someone else.
			Mitigation: this involves taking early actions to reduce the probability and/or the impact of risk occurring or reducing it to an acceptable threshold.

Strategies for positive risks or opportunities

			Exploit: this involves exploiting responses. For instance an organization assigns its most talented resources to a specific project in order to reduce time required for project completion and thus reduce cost.
			Share: this involves allocating some or all of the opportunity ownership to a third party (partnerships, teams, joint ventures…etc.) who is more capable of capturing the opportunity for the benefit of the project.
			Enhance: this involves enhancing opportunities to get more of the benefits. For example adding more resources to finish an activity early.

24.3 Plan Risk Responses

Strategies for both threats and opportunities

			Acceptance: this technique is adopted when the project team is unable to identify any other suitable response strategy. Thus, this strategy requires no action and indicates that the project team will deal with the risks as it occurs.
			Strategies for contingent responses: these are strategies designed to manage the outcome either to reduce a threat or maximize an opportunity. For instance, if the project is falling behind the schedule then a contingent response strategy would include assigning more resources to the project.

Outputs

		Project management plan updates
		Risk register updates: the planned responses are added to the risk register as well as all relevant information. Hence the risk register at this point contains the following:

			Identified risks, their description, their corresponding links into the WBS and RBS and how they might affect the project.
			Risk owners and assigned responsibilities
			Outputs from both qualitative and quantitative risk analysis

24.3 Plan Risk Responses

			Agreed-upon risk response strategies
			Contingency and fallback plans
			Specific actions to implement the chosen response strategy
			Budget and schedule activities required for implementing chosen response
			Residual risks that are expected to remain after planned responses have been taken
			Secondary risks that arise as a direct result of implementing a risk response
			Contingency reserves amounts needed
			Contractual agreements which may be entered to specify each party's responsibility for each specific risk, to determine insurances that can be installed for transferring negative risks as well as other items required to avoid and/or mitigate risk.

24.3 Plan Risk Responses

24.3 Plan Risk Responses