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Types of plans

Used in risk assessment

Initial plan

The following information relates to the types of plan as typically used in a risk assessment, [see 'The Complete Risk Management package‘].
The nomenclature and comments are equally applicable for other project activities.

In order to begin the risk assessment of any project you will need some sort of plan that indicates the broad strategy to achieve the project activities.
Often the project plan is taken as everything that the project needs to exist, including the Gantt chart or schedule.
In this case, the ‘initial plan’ is the schedule containing those activities that will allow you to begin the assessment procedure.
This is required when entering the ‘define’ phase of the project risk assessment.
Naturally, as you are applying the risk management process in the ‘planning phase’ of the project some sort of plan should already exist for this purpose.

It will need to contain the appropriate level of detail but not too much.
A summary plan some where in the region of 25 to 60 activities should suffice.

At this stage, the risk management must, by necessity, be very strategic.
Too much detail in the Gantt chart schedule can obscure the big picture.
It is important to consider major approaches to the project and their implications and not to get too embroiled in detail.

Reference plan

At the end of the ‘define (the project)’ phase we may have modified the ‘initial’ plan to take into account areas that have been omitted.

As a result of this activity we may wish to modify it before the risk management process begins in earnest.
This will become a ‘reference’ plan.

This is also know as ‘baselining’ a plan for later comparison purposes.

The reference plan will not have all the nuts and bolts of a ‘base plan’ with which to instigate the project.
It requires an overview to capture the key areas so that the risk management process can begin in earnest and at the same time serve a useful purpose for presentation purposes to senior management.

The project management plan at this stage should be a complete as possible at this level with nothing missing and equally nothing present that shouldn’t be.

The culture of the organisation should promote an honest presentation of the plan and the ensuing risk management process.
If this is not the case, and there is a reluctance to raise issues that may have a negative affect upon a career the whole process will be doomed from the start.

However, the plans may not be perfect and require review and modification prior to getting the risk management process underway.
If necessary, the changes can be done confidentially to reduce any embarrassment to individuals.
This will keep the participants happy and improve the project control for the project owner.

PRINCE2® 2009 uses baselines for progress control.

Under PRINCE2 2009 [see ‘The Complete Project Management plus PRINCE2’] the following management products assist the Project Manager in establishing baselines for progress control:

  • Project Plan
  • Stage Plans
  • Exception plan
  • Work Packages

[see Progress - The PRINCE2 approach - Event-driven and time-driven controls]

For example, if approved, the Exception Plan will replace the plan that is in exception and will become the new baselined plan.
Baseline information forms part of the Project Initiation Documentation.

Base plan

Once the risk management process has completed the ‘Define to Evaluate’ phases the knowledge and information gained concerning the risks of the project are then incorporated into the ‘reference’ plan.
This becomes the base plan for implementation of the project and contains additional detail concerning the targets of the project.
It will contain milestones and cost data and cash flow information, resource allocation etc.

It will also contain those ‘proactive’ plans that mitigate the affects of some risks with allowance made for the appropriate resource needs.

However, the base plan will not be implemented in its entirety as you will need to manage ‘action plans’ with ‘horizon planning’.
Once the horizon or review point has been identified you will need to decide on what activities require doing now and those that can be delayed till after the horizon.
You will need to include ‘trigger’ points for particular actions, especially for contingency plans.

It will identify ‘target’ durations and costs as opposed to ‘expected durations and costs’. These are:

  • Target cost

The overall potential cost of a project may be £200,000 of which £180,000 is the expected cost and the other £20,000 is contingency.
However, the project manager may set a ‘target’ of less than £180,000 and retain say £25,000 as a ‘provision’.

This is the target set by the board in order to ‘challenge’ the project team to manage the project as efficiently as possible.
If the amount of money released was equal to the ‘expected cost’ it is likely that if things were going well that work would expand to fill the time available.

  • Expected cost

The ‘expected cost’ is precisely that.
It is the cost of the project if all goes to plan.
This will include all identified risks which we expect to occur and thus have been allowed for within the management of the plan.
Let us say that this is £180,000 [see definitions of these and provision and committed costs in 'The Complete Risk Management package‘].

Contingency plan

These are plans put into place on the chance that a risk will happen.
In practice, a ‘trigger’ will exist to implement the plan when it looks as though the risk is about to occur.
The trigger will minimise any time delays just waiting for the risk to materialise.
This will mean you reserving resource or finance for its implementation.
These plans will represent the response to a particular risk threat and a departure from the base plan.
They are ‘reactive’ plans.

You will need to consider the implications of ownership for contingency plans.
As for the base plans do not add more detail than necessary as this can be added at the trigger stage to generate the action plan.

Horizon plan

Strictly speaking this is not a plan but a method of planning i.e. horizon planning.
If you have a long project over many years it will be very hard to produce a meaningful plan that has reliable detail covering a long period.
No plan ever goes as expected and the longer the time period the more uncertainty exists.

Hence, the project must be split into parts containing key milestones or phases, what ever is appropriate.
As one milestone is reached another appears on the ‘horizon’.
In this way, plans for the immediate period of the project can be compiled with more certainty leaving the next ‘horizon’ to later detailed planning.

As a horizon approaches there will need to be action plans to prepare for this.

Your aim is to try to maintain flexibility while considering future strategies.

Action plans

These are put in place prior to a horizon approaching to begin the detailed planning towards another milestone or end of a phase.
This is then the horizon ‘reached’ and a new set of action plans will then need to be put in place working towards the next horizon.

The action plans themselves are well developed and can be implemented straight away.
The plans that follow on at the ‘horizon’ may be less so and require review.

By definition the uncertainty beyond a particular timeframe will increase making the project more risk heavy.
Therefore, when carrying out a risk analysis the effort becomes wasted beyond a certain time period.
Thus, immediate action plans will be more detailed than those following later.
If risk assessment is not an obvious part of project management the plans usually have the same level of detail through out.

Detailed plans require skilled resource to generate them. This effort is best placed in risk assessment up front.

In general, the organisational culture says that the more detail you have in the plans the more ‘confidence’ people have.
You know that the plan will go awry somewhere requiring effort to correct it.
Thus, it is better to put in effort at a higher level to manage action plans towards horizons and leave their detail till later.

It requires a culture change that recognises the need for base plans (containing proactive actions to mitigate risks) and contingency plans (containing reactive actions to mitigate potential risks should they occur).

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