Risk Failure Mode Effects Analysis Part 3
The trigger is a new concept to those acquainted with the FMEA approach to problem elimination. The trigger event (or threshold) is how we know we need to invoke our risk reduction activities and is direct responsibility of the person monitoring.
Risk Response and Contingency Budgets
Each risk dollar amount at stake is multiplied by the probability of risk occurrence. This dollar amount per risk is added together to generate the total contingency budget for the project.
When up front due diligence regarding risk is not employed, contingency budgets are a guess or based upon the last project over-runs, or a percentage of the total budget, random generated, or non-existent. When employing any of these techniques, you are “hoping” for the best instead of planning to make the delivery and accounting for the risk.
The primary task for the project manager can be summed up with the word “anticipation.” To anticipate challenges, the project manager must either fill the function of boundary spanner or recruit someone (more likely multiple people) from within the project team to perform that function. Factual and objective assessment of the project environment is necessary to ensure the delivery to planned schedule and budget. In addition to anticipation, the project manager will add “execution” and “follow-through” to make a complete package for project success.
We have not show the entire tool here; for the template and a detailed way of using the tool, visit the download area on our site (https://valuetransform.com/downloads).