Develop Project Plan

Generally, these risks will impact negatively on the result of your project. Risk is an inevitable consequence of doing business. As the old financial adage goes, ‘the higher the risk, the higher the return’, and this statement is empirically true: the greater the risk you take, the better the return is likely to be.

Another facet for risk and its identification is Workplace Health and Safety (WHS). This is the discipline concerned with protecting the health and safety of all stakeholders in the workplace. It aims to eliminate the hazards and risks resulting from work activities. WHS will be discussed more towards the end of this topic.

There are many risks of varying degrees in project management but the most common are the following:

• Strategic risk: Strategic risk results from errors in the strategy (plan) used to implement the project.
• Market risk: Market risks are generally due to economic reasons (beyond the influence or control of the organisation) such as foreign exchange rates, commodity markets and interest rate risks
• Legal risk: Legal risks are those that arise from legal and regulatory obligations. For example, litigation arising from contracts that can be brought against the company.
• Operational risk: Operational risks are those that come from poor processes. For example, procurement of materials or resources, and production or distribution of services and products. These may also apply to project management processes.
• Governance risk: This mainly refers to senior executive or boards and how management manage the processes and practices related to compliance. For example, the formal structures that exist to support risk-based decision making and oversight across an organisation.
• External risk: This is also referred to as ‘force majeure’. For example, natural disasters such as floods and bushfires, terrorist attacks, pandemics, labour strikes, etc

The types of risks you identify will depend on your industry, workplace and the size and complexity of the project.

Risk management plan

A risk management plan is a document that project managers refer to foresee risks, estimate impacts and define responses to these risks. It is a document essential to all project plans as it helps project managers be prepared for the worst-case scenarios, enabling them to address issues as they occur.

Whilst there are many models of risk management plans, many will include the following details listed in the following table.

Section	Instructions
I. Preliminary details Title of the project Project Environment Date of the Plan (when it was created) Version control and document history
II. Introduction Purpose of the risk management plan Objective of risk management Definition of terms	Briefly explain the purpose of the risk management plan – one must be in relation to the project, and one in relation to WHS List at least two objectives for each area List and define terms that need to be understood in the context of this risk management
III. Risk management process Explain in each of the following sections how risks in both the project and WHS will be identified, analysed, and managed throughout the project cycle.
1. Risk identification
2. Risk analysis	Explain the following: How the risk rating is used How risks are prioritised Include a timeline on when control measures will be implemented to mitigate each identified risk on each area.
3. Risk response	In this section, provide the details in the Risk Management Action Plan, including: Each identified risk per area Likelihood and impact of each risk occurring Control measure to be implemented for each risk (Refer to your completed Risk Register) Person responsible Identify individual stakeholders who are responsible for responding to each risk identified for both project and WHS. These can include your project team members. Target implementation dates for each control measure Expected outcome of each implemented control measure
4. Risk tracking and reporting	Explain how risks will be tracked and outline the reporting requirements. Specify any tools that will be used in the risk management process, e.g. Risk Log, and indicate the individual stakeholder to whom risks are to be reported.
IV. Approvals	This must include the names and signatures of relevant project stakeholders who reviewed the risk management plan, and the date when they reviewed the plan.
V. Appendices/Attachments	Include the Risk Registers and other relevant tools used to develop the Risk Management Plan.

The specific contents of a risk management plan may be modified depending on the complexity of the project and your organisation’s risk management policy and procedure.

Developing the risk management plan

Understanding the risk management procedure is important when you are developing the risk management plan.

Risk management procedure

There are different risk management procedures, however most include the following steps:

The steps are:

1. Identify the hazard
2. Assess the risk
3. Communicate and consult
4. Treat and control the risk
5. Monitor and review

Step 1: identify the hazard/s

Identifying hazards involves recognising things which may cause injury or harm to the physical health and wellbeing of a person.

Step 2: Assess the risk

The overall process of risk identification, risk analysis and risk evaluation are assessed using the Risk Assessment Form.

1. Identify risk: Identifying risk sources, areas of impacts, causes and possible consequences to form a comprehensive list of risks that will negatively or positively affect the organisation’s objectives.
2. Analyse the risk: Considering the range of causes, sources of risk, consequences (refer to the first diagram below labelled 'Consequence') and likelihood (refer to the second diagram below labelled 'Likelihood')
3. Evaluate the risk: Using the Risk Matrix (refer to the third diagram below labelled 'Risk Matrix') calculate the level of risk by finding the intersection between the consequences and the likelihood. This information from the Risk Matrix will help you identify the risk level/rating and actions (refer to the fourth diagram labelled 'Risk Level/Rating and Action')

Consequences

Evaluate the consequences of a risk occurring according to the ratings in the left-hand column

Descriptor	Level	Definition
Insignificant	1	No injury
Minor	2	Injury / ill health requiring first aid
Moderate	3	Injury / ill health requiring medical attention
Major	4	Injury / ill health requiring hospital admission
Severe	5	Fatality

Likelihood

Evaluate the likelihood of an incident occurring according to the ratings in the left-hand column

Descriptor	Level	Definition
Rare	1	May occur somewhere, sometime (“once in a lifetime  / once in a hundred years”)
Unlikely	2	May occur somewhere within the Department over an extended period
Possible	3	May occur several times across the Department or a region over a period
Likely	4	May be anticipated multiple times over a period of time May occur once every few repetitions of the activity or event
Almost Certain	5	Prone to occur regularly It is anticipated for each repetition of the activity of event

Risk matrix

Use the matrix to calculate the level of risk by finding the intersection between the likelihood and the consequences

Likelihood	Consequence
	Insignificant	Minor	Moderate	Major	Severe
Almost Certain	Medium	High	Extreme	Extreme	Extreme
Likely	Medium	Medium	High	Extreme	Extreme
Possible	Low	Medium	Medium	High	Extreme
Unlikely	Low	Low	Medium	Medium	High
Rare	Low	Low	Low	Medium	Medium

Risk level / rating and actions

Based on the level of risk you identified in the Risk Matrix determine the appropriate action.

Descriptor	Definition
Extreme	Transition
High	Notify Workplace Manager and/or Management WHS/OHS Nominee immediately. Corrective actions should be taken within 48 hours of notification.
Medium	Notify Nominated employee, HSR / HSC. Nominated employee, WHS/OHS Representative / HSC is to follow up that corrective action is taken within 7 days.
Low	Notify Nominated employee, HSR / HSC. Nominated employee, HSR / HSC is to follow up that corrective action is taken within a reasonable time.

This information is used to identify the most appropriate control measure to control the risk called the 'Hierarchy of Control Measure'

Step 3: Communicate and consult

Effective communication, consultation and education in risk management are necessary to achieve a successful integration of the risk processes into the organisation.

Step 4: Treat and control risk

The Hierarchy of Control Measures provided below is used to select one or more options for treating and controlling risks including funding and other resource considerations.

Step 5: Monitor and review

Continual monitoring and reviewing of risk profiles are essential to maintain the effectiveness and appropriateness of the treatment applied by management.

Hierarchy of control measures

Risk is often associated with hazards that may cause injury or destruction. The following refers principally to hazards that may cause injury or destruction. The results of a risk assessment are used to identify the most appropriate control measure to control the risk called the 'Hierarchy of Control Measure'. These are shown in the following diagram.

Work Health and Safety (WHS)

As the project manager, you have a legal responsibility to manage health and safety in the workplace. Work health and safety (WHS) is the management of risks to the health and safety of everyone in the workplace – employees, customers, visitors, suppliers, and volunteers.

Implementation of the WHS starting from scratch may cost time and money but the benefits that come with it are critical to your long-term success. Benefits include:

• helps keep your staff’s concerns for their well-being at bay
• improves staff productivity
• reduces injury and illness in the workplace
• reduces the cost of worker’s compensation due to injury.

WHS Requirements

Under Australian WHS laws, businesses and organisations must ensure the health and safety of their worker. It is not only basic decency but a legal obligation to not put the health and safety of other people at risk. To do this, you must provide the following:

• a safe work environment
• safe machinery and structures
• safe ways of working
• adequate facilities
• any information, training, instruction or supervision needed for safety.

WHS requirements do not stop at the provision of those enumerated above. Maintaining the safe work environment, facilities, and machinery and structures are also necessary, and the health of workers and conditions at the workplace must be monitored.

Each state in Australia has its own WHS laws and a regulator to enforce them so you will have to verify the WHS laws implemented in your area. The following interactive map lists the legislation, regulations and codes of practice for each state.

State	Legislation	Regulation
Australian Capital Territory	Work Health and Safety Act 2011 (ACT)	Work Health and Safety Regulation 2011 (ACT)
New South Wales	Work Health and Safety Act 2011 (NSW)	Work Health and Safety Regulation 2017 (NSW)
Northern Territory	Work Health and Safety (National Uniform Legislation) Act 2011 (NT)	Work Health and Safety (National Uniform Legislation) Regulations (NT)
Queensland	Work Health and Safety Act 2011 (Qld)	Work Health and Safety Regulation 2011 (Qld)
South Australia	Work Health and Safety Act 2012 (SA)	Work Health and Safety Regulations 2012 (SA)
Tasmania	Work Health and Safety Act 2012 (Tas)	Work Health and Safety Regulations 2012 (Tas)
Victoria	Occupational Health and Safety Act 2004 (Vic)	Occupational Health and Safety Regulations 2017 (Vic)
Western Australia	Occupational Safety and Health Act 1984 (WA)	Occupational Safety and Health Regulations 1996 (WA)
Commonwealth The Commonwealth jurisdiction covers workers for the Commonwealth Government (e.g. the Australian Defence Force) and businesses licensed to self-insure under the Comcare scheme.	Work Health and Safety Act 2011 (Cth)	Work Health and Safety Regulations 2011 (Cth)

Wherever the state or territory you are in, persons conducting a business or undertaking (PCBU) have a primary duty of care to their workers. However, the specifics may vary depending upon the WHS laws implemented in your state/territory. Generally, this can be found in the ‘Primary Duty of Care’ section in the WHS legislation although it is a bit different for Victoria and Western Australia.

To know more about the standards of health, safety and welfare required under the WHS Act and the Work Health and Safety Regulations, you can read them here:

How to Manage Work Health and Safety Risks (Code of Practice)

Now that what needs to be done has been established, the next phase is to determine milestones and establish a schedule for each item. Before creating your to-do list you need to consider the budget and finances.

Budget

Budget is the total projected costs in to complete a project within a timeframe. It estimates the cost for every phase of the project. This includes labour costs, material procurements costs, and operating costs. Keep in mind that costs can change depending on circumstances such as delays and change requests. The cost management of any project involves three key items. These are described briefly in the following table.

Item	Description
Resource planning	The first step in project cost management is to decide on the quantity of each resource that will be required in order to complete all the project activities. You need to make sure that you have included all materials, people, machinery and facilities necessary for the project in your resource list. It is recommended to have people with experience and expertise in similar projects make your resource list.
Estimating Costs	Estimating the costs of any project is extremely difficult as each project you undertake will have its own intricacies which must be assessed and calculated. To help with this task, it is important that you refer to your Work Breakdown Schedule.
Budgeting	After you have estimated all the costs and added them up for every task in your project, you will have a final cost estimate for your project. This should be presented to your project sponsor for approval as the funds will be coming from them. There are generally a number of stages in estimating costs for a project: Begin by developing a very rough estimate of the costs. This should be very broad; in order to accomplish this, you should estimate all costs and then add at least 50% in order to establish your rough estimate for approval. It is always better at this stage to over-estimate costs. The next budget estimate should be an estimate that falls within about 15% accuracy generated in order to assist an organisation with their yearly budgeting. Finally, a definite estimate needs to be produced when the company is ready to allocate resources – at this stage, + or -5% accuracy should be the aim – and this involves careful planning.

Creating and managing project budget

A project budget must be well thought out and well-constructed, not missing any of the aspects that require funding. To effectively create and manage your budget, you have to:

• Use historical data: The project you want to implement may not be the first of its kind. Look back to similar projects and take a look at how the budgeting was done. This will give you a good view of where the start with your project budgeting. Records, logs or other documents prepared at the start of a project to identify the planned budget of a project will also be helpful.
• Refer to lessons learnt: After you have obtained the historical data, you may continue your investigation by looking at the project's successes and failures. Note how the issue was addressed. This will help you avoid making similar mistakes and keep the budget under control.
• Consult experts: Experts are another resource that may aid you in your project budgeting endeavours. Take advantage of their expertise and experience to learn how to successfully manage your budget.
• Confirm accuracy: You have a project budget document. You have finished translating your plan into a physical document that you can present. Now, double, triple, multiple check it. You are not done the first time. Make sure the figures are accurate. During this process, you can also let your team members take a look at the project budget you made.
• Baseline and update the budget: The project budget is how you will keep track of the costs and control the costs. But certain circumstances are bound to happen that will change things up and will require you to make adjustments to the budget. You will need to report changes in the budget to your supervisors. Once they approve, you need to update your budget.
• Update in real time: Regarding changes, indicate them in your document as soon as you know them. This will help with decision-making that could make or break your project.

Getting approval from relevant stakeholders for project budget

Suppose you already have with you the project document. What now? The next step is to have it signed-off or approved by the relevant stakeholders, the project client or the sponsor. Sign-off is a formal acceptance of the relevant stakeholders. It is usually done at the conclusion of the project, but it also applies when approving the project plan or approving a major deliverable in the project. In this case, the sign-off is for the project budget.

The importance of an approved project budget cannot be stressed enough. Without any budget, the project cannot happen as an approved budget is what drives project funding.

Timeframe

A timeframe is a chronological order of events. When undertaking a project, the timeframe is what captures the essence of what a project will accomplish and when it will be done. Project management requires you to be flexible since priorities often change. A timeframe helps set clear priorities, showing which tasks are most critical so you can tackle them first. It will set your team on the same page and make sure that everyone’s goals and objectives are aligned.

Creating a project timeframe does not have to be stressful. Simply consider the following steps:

1. Outline your goals
2. Note down key milestones
3. Decide timeframes
   • Gantt chart
   • Critical Path Analysis (CPA)
4. Create your project management timeline
5. Review your project timeframe with all your stakeholders

Step 1: Outline your goals

At the start of the project, you will have already determined your goals. This part outlines the deliverables you plan to produce at the end of the project.

Step 2: Note down key milestones

Milestones are actionable steps that lead to your main goal. Breaking big projects into smaller chunks will let you and your team keep track of every phase and immediately spot shortcomings like crossed deadlines.

When you sit down and look at your project, it is usually quite overwhelming. You have a huge task to undertake and initially, you are unsure of how to set about doing it. Once you realise just how much there is to do, it can be overwhelming. By breaking down the project into smaller tasks, you can get to grips with what actually needs to be done.

A good way to establish an effective schedule and to show which events need to be done and when is through the Work Breakdown Structure (WBS). This document aims to break down the complete project into small chunk-sized pieces which are organised into the order by which they are required to be completed.

Step 3: Decide timeframes

After setting the milestones, it is now time to set a reasonable timeframe for achieving each of the objectives set. It is important that you not overrate your team’s capacity when figuring out how fast you can accomplish the objective. Remember that when you fail to meet the first milestone on time, this will mean less time to work on and complete the succeeding ones.

The simplest way of doing this is to create a to-do list and listing each item in order. However, for larger projects with a number of things all going on at the same time, this is not a very efficient way of doing things. Instead, either a Critical Path Analysis (CPA) or a Gantt chart is an effective way of scheduling.

Gantt chart

A Gantt chart is a visual view of tasks. It’s a useful way to easily determine what work is scheduled for a specific day. In Gantt charts, the individual activities or task categories are listed down the left side of the chart and the time for completion is represented by a rectangle on the right side. The example below shows how the installation of a new kitchen might look.

Activity		Weeks
		1	2	3	4	5	6
1	Remove existing kitchen
2	Electrician
3	Plumber
4	Obtain, erect and install flat-pack kitchen
5	Tiler
6	Lay floor

Critical Path Analysis (CPA)

CPA is a network analysis tool that:

• Graphically displays all the activities in a single project
• Displays the order the activities have to be undertaken
• Displays the activities that can only be initiated after other activities have been concluded
• Displays the activities that can be undertaken simultaneously
• Displays when certain resources will be needed.

It is easier to understand the creation of the CPA if you actually make one. Use the kitchen installation example in the Gantt Chart.

Step 4: Create your project management timeline

It is now to create your timeline. Line your tasks from end to end, adjusting lengths to reflect the time allotted. Do not forget to add the milestones as well.

Step 5: Review your project timeframe with all your stakeholders

Before working on the project implementation, make sure that all stakeholders are in agreement starting with your team. This way, you can be assured that everyone is running towards the same direction. Letting your clients know is also important so that they are aware of the milestones and delivery dates and you can confirm that they are happy with the timelines.

As a project manager, you need to consult with team members and take their views into account when planning, implementing and monitoring the project. Leaders who spend time aside to meet the team and understand their perspective are more likely to see better results. Before we get into what consultation throughout a project entails, let us look first at some basics of communication which when done well underpins a successful project.

Communication skills used by project managers

It is often said that 90 per cent of a project manager’s job is communication! This includes written and oral communication.

Examples of written communication

• Meeting notes
• Email correspondence
• Status update

Examples of oral communication

• Project presentations
• Leading team meetings
• Engaging with stakeholders
• Consulting with team members

In this subtopic we focus on oral communication skills as this will be where most of your consultation throughout the project will occur.

Oral communication

Oral communication describes any type of interaction that makes use of the spoken language. Oral communication skills are used to:

• participate in verbal discussions using clear language and appropriate feature to present or seek information
• use listening and questioning skills to seek information and confirm understanding.

It is not difficult to appreciate how important these are to ensuring your project proceeds successfully and the project objectives are met. For oral communication to be effective, it should be clear, relevant, concise, and informative. Oral communication skills include:

• active listening
• asking for clarification
• asking a mix of open-ended and closed questions to gain insights and confirm understanding
• recognising and responding appropriately to non-verbal cues (body language)
• speaking clearly and concisely
• paraphrasing.

Let us now consider consultation.

So, what is consultation and why is it important?

Consultation means actively seeking the opinions of interested and affected groups. It is a two-way flow of information, which may occur at any stage of a project development. Consultation should be a continuing dialogue that occurs for the duration of the project. It may be a one-stage process or, as it is increasingly the case, a continuing dialogue.

As stakeholders who are most involved and actively working on the project, your team members are bound to encounter a few things that you would not have otherwise come upon if you were not as hands-on. The insights that your team members have could be important in the way you approach the project and provide for a more efficient way of handling tasks and streamlining your processes.

Take advantage of team meetings and weekly catchups and ask your members how they are doing with their tasks. If anyone in the team is experiencing difficulties or blockers with the project, meetings are a great opportunity to coordinate with each other and discuss how the team can effectively deal with the issue. Team members can also learn about each other’s best practices on managing tasks, unexpected work issues, etc. Furthermore, the consultation can make team members feel valued which, in turn, leads to boosted morale.

Projects do not have unlimited resources. You have to work within the limits of time, money, people and other resources that have already been set. Aside from that, there are other considerations, such as the limitations of technology and legal requirements. Project management tools help you effectively organise work and manage tasks. Those you use will depend on your organisation’s preferences.

Project management tools to plan and track projects can be categorised as traditional or contemporary.

Traditional

• Spreadsheets
• Whiteboards
• Paper checklists

Contemporary

• Instant messaging tools
• Knowledge based tools
• File sharing tools

Watch the following five-minute video video to learn about typical project management tools and the benefits and drawbacks of traditional vs modern project management tools.

Do you know what the most popular project management tools are?

• Task management (76 per cent)
• Project tracking (71 per cent)
• Collaboration (63 per cent)
• Time tracking (60 per cent)
• Resource management (53 per cent)
• Budget management (47 per cent).

After watching the video answer the following question.

For more information on the following project management tools, select the following headings.

Online platforms

There are also online platforms that can help you keep track of your project and your progress. A few examples are the following.

• Scoro: Scoro is a one-stop shop project management software that combines all features you might need: projects & tasks, contact management, quotes, team collaboration, billing and reporting.
• Asana: Asana does away with emails while combining elements of project management, file storage and collaboration.
• Basecamp: Basecamp has a social media-like interface and carefree team collaboration features.
• EventCollab: EventCollab is a cloud-based software that helps to collaborate, share project schedules and documents, track time, assign tasks, chat and more.
• Trello: Trello is great for managing short and quick everyday assignments. It is known for visualising project tasks on a cardboard-like dashboard.

Watch the following video to learn more about Asana.

Now that you have established the project parameters, developed the budget and timeframe and determined the project management tools that you can use, you can now develop a project plan according to the parameters set and your expected deliverables.

It is important that you use the scoping documents you developed in the previous stage as the basis of your plan because the scope document outlines exactly what is required to be undertaken in your project. It can be easily used to create activity lists and assess what you need to be able to deliver.

The final stage in the planning process is bringing everything together into a project plan, which is all the information that you have identified and developed over the course of this manual. The project plan is a crucial document in the project. It consolidates all the information and is constantly referred to ensure that the project is on track and meeting its objectives; it is the basis for monitoring and controlling the project. As previously mentioned, think of your project plan as a roadmap – it should tell you where you are, where you are going, and how you will get there. It should include the following information:

Structure and contents of a project plan

The structure and contents of your project plan may vary depending on your organisation’s requirements and may will require you to use a specific project plan template. However, it should contain:

• Project Purpose
• Background and Strategic Context
• Priority and Related Projects
• Project Objective/s
• Project Scope (assumptions, inclusions, exclusions, constraints and deliverables)
• Project Governance (reporting, roles and responsibilities)
• Stakeholders
• Schedule of project milestones and deliverables (e.g. Gantt chart, Critical Path Analysis)
• Resource and Cost Plan
• Risk Assessment (major project risks and a risk management strategy)
• Communications Management Plan (when and how to report it)
• Quality Management Plan which will include standards
• Variance/Change Management Procedure.

Your organisation may also ask you to provide a transition plan for team members after the project concludes and a communications plan.

Watch the following video for a practical summary of project planning with a focus on using Project.com and Gannt charts.

Watch the following video for a practical summary of project planning with a focus on using Project.com and Gannt charts.

You now have your project with its parameters defined. You have identified stakeholders and clarified their relevance to your project. You have identified resources and your budget is approved. In short, you are almost ready for the implementation of the project. You just need one more thing before you can start and that is the sign-off on approval to proceed.

When undertaking a project, the first stage is establishing everything that is needed for the project: what the project is, budget, timeframe, etc. This has to be signed-off before the next stage, administering or implementing the project, is commenced.

A sign-off is a formal end to a project milestone moment. Usually, it is done at the end of the project and is the formal acceptance of its completion, signifying that all deliverables have been met within the parameters agreed upon by all stakeholders. However, sign-offs are not exclusively for the completion of the project; the planning stage also requires a sign-off to signify that the project plan is approved.

Sign-off is important as this will be your official and legal permission to start the implementation of the project. It is how you can be sure that the parameters have been approved for implementation. This is where the project sign-off sheet comes into the picture.

A sign-off sheet is a simple document that formally signals the end of the project or, in this case, the end of the project milestone moment which is the approval of the project plan. A signed project plan represents all the stakeholders’ commitment to continue and to dedicate the required time and resources toward the project.

Depending on the size of the project approval may be granted by the sponsor or delegating authority. For larger projects approval all stakeholders must sign-off on the project plan or a specific sign-off document. This sign-off marks the plan as the go-forward agreement and can be viewed as a project management milestone.

Key points

• Risk is inevitable. All project plans must include a Risk Management Plan to mitigate negative impacts from risks that may occur.
• A Work Breakdown Structure (WBS) is an effective way to break down big projects into smaller tasks.
• As a project manager, you have to consult team members and take their views into account when planning the project.
• Project management tools help you effectively organise work and manage tasks.
• The project plan must be approved before the project commences.

The final activity for this topic is a set of questions that will help you prepare for your formal assessment.