Risk management, like every critical management activity, is best accomplished when a formalized and documented set of guidelines and standard operating procedures are implemented and followed by everyone in the company. The Project Management Institute (PMI) has provided guidelines for a risk management process in their Guide to the Project Management Body of Knowledge (PMBOK Guide), including their own model. The model in Exhibit 7-1 contains all the PMI model steps but is more detailed to better explain the risk management components and process elements. One key component of PMI's model that is implicit, but not stated, is that of continual evaluation. Risk management is an ongoing process that continues throughout the project's life cycle.
Exhibit 7-1: A risk management model.