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

Breakdown Structures – A Powerful Project Management Documentation Format


Documentation & maintenance of documentation is one of the hardest and important activities in Project Management. Hundreds of plans, mails, progress tracking, change requests, document updates, contract documents, etc are few examples of documentation events in project life cycle. There are three main formats used to represent information in documents.

1. Text format – This is most used format as we are trained to write paragraphs & pages from our childhood.

2. Tabular format – This is used when a matrix or log type of information representation is required i.e. responsibility matrix, risk log.

3. Tree hierarchical format – This type is used to depict whenever parent-child relationship exists between different elements. This is the prevalent type used in all “Breakdown Structures”. If you analyze you can see, basic structures built-in Mind mapping is very much tree hierarchical in nature. That’s why Mind Mapping technique can be used directly into your project documentation.

Project Management Documentation formats

Project Management Documentation formats

Breakdown structures

Breakdown structures are important document formats throughout Project Management Life Cycle. One can see Work BS, Resource BS, Risk BS, Organizational BS used in most of the Project.

Breakdown structures follow the general principle of life –

“What you think as a big & unachievable can be achieved by breaking it down into smaller pieces & successfully finishing all smaller pieces leads to completion of the big”.

I like to give simple and effective example here. You are about to have a big buffet lunch. If you think of eating all in one stretch, then it is surely unachievable. You are finishing that tasty feast by eating one mouth at a time.

In Project Management, Breakdown structures are hierarchical representation of information based on certain broad element at the higher level and detailing it out in the descending levels (This is what you do exactly in Mind Mapping too!). A breakdown structure has nodes that represent some text attached to it that conveys some specific information. Nodes are connected with branches in a parent-child tree structure that follows parent = sum of all children rule.

Few other general design principles applies to breakdown structures like 1) 100% Rule 2) Mutual exclusive elements 3) Level of detail. Here are few commonly used breakdown structures and their explanations.

Work Breakdown Structure (WBS) – The WBS is a hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables.

Resource Breakdown Structure (RBS) – The resource breakdown structure is a hierarchical representation of resources by category and type.

Organizational Breakdown Structure (OBS) – A hierarchical representation of the project organization that illustrates the relationship between project activities and the organizational units that will perform those activities.

Risk Breakdown Structure (RBS) – A hierarchical representation of risks according to their risk categories.

Monitor & Control Risks – Mind Map


Here is the mind map for sixth & final process of Risk Management knowledge area – “Monitor & Control Risks”. Monitoring and controlling process are like sanity check processes – there is no exact time frame for these processes and they should be active throughout the project.

I tried putting as much information as possible in each branch in this process map to bring out completeness to it. Hope this will be useful to you.

(Note: Click on the image to get full view)

Monitor&Control Risks

Important Note:

* Note# 1: There could be some typo or presentation errors. Please reply back for any corrections.

* Note# 2: You can use this for personal use (like studying for PMP Exam or PM activities). But don’t share this in common forum or web sites. As this one is part of my training guide and project management book.

We’ve never done it that way before…


When I asked my visitors about widely used Risk Identification Technique in their organization(https://leadershipchamps.wordpress.com/my-polls/), majority of them voted for ‘Brainstorming’. No wonder why they chose that. Brain is a piece of flesh that has the power to create a new galaxy or destroy it! Ideas from such a wonderful brain is the main investment for businesses.

Brain is such a great body part which can be compared to many things like super computer, storage media, super search engine, movie camera, etc. But it is much more than that. Experience, thinking & ideas are key outputs that led to several inventions & revolutions. Brainstorming is very important for an individual, community or an organization to produce desired results.

image

Here is the reality of brainstorming in day to day business. It is common in IT industry, brainstorming carried out by a group of closed minded peoples who come up with the mind set to say ‘No’ to new ideas. Some may not deny directly but they use all phrases (like the one mentioned in blog topic) that rejects the idea in a round about way.

In one meeting, Manager started a brainstorming with the final decision in mind – he presented the scenario, he told the solution and asked every one whether they agree. That’s all! Here brainstorm loses its actual meaning.

To have an effective brainstorming –

1. Attendees (including chair person) should have open mind for any ideas that comes up

2. Leader should present scenario ask for ideas

3. Small or big – an idea is an idea. Don’t reject! Even an idea considered as simple one should be validated

4. Brainstorming should bring all options out – Leave no stones unturned

5. Using Mind Maps is one of the greatest way to do Brainstorming. Mind Maps brings focus, clarity in thinking, grouping of common items under different categories & breaks linear thinking pattern, which produces great choices.

Start with a question & bring out all options,

discuss number of ways to handle the situation,

document them,

choose best idea,

rank it & rate it,

adapt best suited solution at that given point of time that satisfies all constraints.

Plan Risk Responses – Mind Map


Here is the mind map for fourth process of Risk Management knowledge area – “Plan Risk Responses”. I wrote lot of risk management articles in this blog which are input to this post.

I tried putting as much information as possible in each branch in this process map to bring out completeness to it. Hope this will be useful to you.

(Note: Click on the image to get full view)

 Plan  Risk Responses

 

For detailed information about each response strategies please go through my earlier post Risk Response Planning Strategies

Other Risk Management Articles in this blog – https://leadershipchamps.wordpress.com/category/risk-management/

Important Note:

* Note# 1: There could be some typo or presentation errors. Please reply back for any corrections.

* Note# 2: You can use this for personal use (like studying for PMP Exam or PM activities). But don’t share this in common forum or web sites. As this one is part of my training guide and project management book.

Perform Quantitative Risk Analysis – Mind Map


Here is the mind map for fourth process of Risk Management knowledge area – “Perform Quantitative Risk Analysis”. I tried putting as much information as possible in each process map to bring out completeness to each of them. Hope this will be useful to you. This also placed under Planning Process Group.

(Note: Click on the image to get full view)

Perform Quantitative  Risk Analysis

Important Note:

* Note# 1: There could be some typo or presentation errors. Please reply back for any corrections.

* Note# 2: You can use this for personal use (like studying for PMP Exam or PM activities). But don’t share this in common forum or web sites. As this one is part of my training guide and project management book.