How to prepare Risk Register?


Risk register (also called as Risk Log) is a master document that provides the details of all identified risks and their characteristics. Though it is created during risk identification process, it is periodically updated throughout the project management life cycle & it is an important risk management document in every project.

Risk Register Sample

Risk Register Sample

A sample risk register is shown above. Risk register has complete information about project risks. Here are the list of data fields part of a typical risk register:

  • Risk ID – Unique ID to report/review/communicate the risk
  • Risk description – Short description about the risk event
  • Risk owner – Name of the risk owner
  • Risk Category – Category of the risk
  • Cause of the Risk – Information about the risk trigger
  • Effect or Impact of the Risk – Information about the effect or impact if the risk occurs
  • Project phase detected & affected
  • Ranking – Ranking of the risk
  • Affected WBS activity – WBS ID if it affects a specific work package
  • Probability of risk occurrence – This is from qualitative risk analysis
  • Frequency of risk occurrence – This from qualitative risk analysis
  • Potential responses – Possible responses for the risk. It can be more than one
  • Approved final response – Response selected for implementation
  • Contingency plan – Plan in place to reduce the risk effect in case a risk trigger occurs
  • Fallback plan – Plan in place suppose primary response didn’t work effectively as expected
  • Risk Triggers – warning signs of a risk occurrence
  • Last occurrence – Last occurred date/time
  • Cost of mitigation/fallback plans – Cost estimated for mitigation or fallback plan execution
  • Time required for risk responses – helps in schedule plans
  • Reserves – Management & contingency reserve information if available
  • Risk review audit information – Comments about the risk based on risk review audit
  • Current status of the risk – Closed (or) Open (or) Trigger event identified, etc.

There is no limit to the level of details captured in risk register but it depends on benefits of the information and the efforts to update the data. More information captured enables possibility of more detailed reporting.

Let us review uses of risk register:

  • Risk register provides main details about all identified project risks with its characteristics (like probability, frequency, category, cause/effect, etc.) along with potential responses and it tracks current status
  • Information about secondary & residual risks are also documented in risk register
  • Risk register provides key information to all other risk management processes
  • It is primary source for risk review process & all kinds of risk reports

Here are the general steps in preparing Risk Register:

  • Documenting risk register in spreadsheet software gives more flexibility to manage it. Risk repository database software can also be used
  • Identify required information fields that should be included in risk register
  • Employ any one or more tools & techniques to identify and document the risk. Many tools and techniques are available for risk identification like brainstorming, interviewing, root cause analysis, checklist analysis, assumption analysis & diagramming techniques
  • Record all identified risks with its details. Document the responses in case, if it is available
  • Periodically review and update the risk details as and when information about fields like responses, last occurrence, etc. are available
  • Document new risks, secondary and residual risks if anything is identified later in the project life cycle

References:

  1. Use a Risk Breakdown Structure (RBS) to Understand Your Risks, David Hillson, Proceedings of the Project Management Institute Annual Seminars & Symposium October 3–10, 2002, San Antonio, Texas, USA
  2. The controlling influences on effective risk identification and assessment for construction design management. International Journal of Project Management 19 (3), Chapman, R.J. 2001
  3. A Guide to the Project Management Body of Knowledge (PMBOK) Fifth Edition, Project Management Institute Inc., USA, 2013

How to prepare Risk Breakdown Structure (RBS)?


Risk Breakdown Structure (RBS) is a tool that provides hierarchical structure of project risks arranged by risk categories. Risk categories generally are grouping of potential risk sources and it differs from one project to another. Below is a sample RBS for construction design project (RBS Template adapted from Dorofee et al., 1996)

RBS Template adapted from Dorofee et al., 1996

RBS Template adapted from Dorofee et al., 1996

Instead of going through a big spreadsheet with hundreds of verbose entries about risks, RBS provides a pictorial representation of related risk categories arranged in a tree structure which is an excellent way of getting the complete information about project risks in a single place for effective communication, management and governance.

Let us review uses of RBS in Project Management:

  • RBS provides a structured way to identify risks by going through all risk sources from which project risks may arise
  • RBS helps the project team to focus on high risk source areas
  • RBS helps project team to develop more generic risk responses based on sources
  • RBS helps to manage & report the project risks at different levels – roll up, drill down reporting & in case multiple projects with same nature within the organization uses same RBS templates then it helps in getting comparison reports across those projects
  • Reviewing RBS from completed projects helps organization to identify high risk sources, repeated risks, document them as part of existing RBS templates and develop effective responses

Next let us review general steps involved in preparing RBS:

  • First check whether organization has RBS templates & tailor it for particular project. In case multiple templates available based on different project types (i.e. large project, IT project, Manufacturing project, etc.), pick the one which matches with current project
  • In case templates are not available, start with more generic templates or guidelines generally available & tailor it for current project need
  • RBS creation doesn’t require sophisticated drawing software. It can be created using big chart paper or spreadsheet software. It can also be represented by placing each level in different columns in the increasing order in a spreadsheet
  • Use brainstorming technique as it is the best one to build RBS structure
  • First start with broader risk sources for the Project as higher level risk categories
  • Involve stakeholders who are experts in specific source area (example industry or funding) to decompose higher level sources of risk into layers of increasing detail
  • Stop adding sub-levels at the point where sources cannot be subdivided further or subdividing will not aid risk management process significantly

References:

  1. Use a Risk Breakdown Structure (RBS) to Understand Your Risks, David Hillson, Proceedings of the Project Management Institute Annual Seminars & Symposium October 3–10, 2002, San Antonio, Texas, USA
  2. The controlling influences on effective risk identification and assessment for construction design management. International Journal of Project Management 19 (3), Chapman, R.J. 2001
  3. A Guide to the Project Management Body of Knowledge (PMBOK) Fifth Edition, Project Management Institute Inc., USA, 2013

Project Charter – Video Tutorial


Project charter is an important document for every project. Understanding its use, what is required to created it, do’s & don’t of it is a key for a Project manager or senior management. Project Charter is the one and only output of Develop Project Charter process in Initiating process group.

Here is the video tutorial of my earlier blog post. It has rich source of information about Project Charter & has complete details about it. Not only for Project Manager or a PMP aspirant, this is useful to all employees working in any project and students. This tutorial is aligned with PMBOK 5th Edition.