Risks come about for many reasons. Some are internal to the project, and some are external. The project environment, the planning process, the project management process, inadequate resources, and so on can all contribute to risk. Some risks you'll know about in advance and plan for during this process; others risk events will occur unannounced during the project. The Plan Risk Management process determines how you'll plan for risks on your project.
The PMBOK® Guide states that the Plan Risk Management process is the foundation for all the Risk processes that follow. The risk management plan assures that the appropriate amount of resources and the appropriate time are dedicated to risk management. "Appropriate" is determined based on the levels, the importance, and the types of risks. The most important function the risk management plan serves is that it's an agreed-upon baseline for evaluating project risk.
To document the risk management plan, you need to gather some inputs that will help you determine your organization's risk policies and tolerance for risk. You'll look at those inputs next.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.