One of the first tasks that a Hart Square Project Manager carries out on a project implementation is to set up the project documentation which includes a risk register where risks are recorded and monitored. Project risks affect the project deliverables, timelines and budgets and have the potential to lead to a project’s failure if not acknowledged and managed appropriately.
Types of risks
The types of risks that could be included can relate to all stages of the project from discovery to go live and can include items that relate to project scope, resources, costs, timeline, integrations, testing, data migration, training, staff communications and change management – so absolutely any aspect of the project. Local factors outside of the project also need to be considered, such as the implementation of another technology project which may impact your project scope, resources or timeline. Or there could a business as usual activity that could be a potential distraction to the project. Project risks can be caused by external factors too: political, environmental, economic, social, technological, or legal factors beyond the scope of the project.
Importance of a risk register
At the beginning of a project, a risk register is used to effectively brainstorm all the risks that can occur and provide a framework for the project. The information about each risk that needs to be recorded in the risk register is:
- The risk event i.e. what can possibly happen to harm the project. The identified risks need to be relevant to the project and described accurately. The focus needs to be on the risks that may have a significant impact on the outcome of your project. Weed out those risks that are outside of the scope of your project, or those over which you have no control.
- The risk probability i.e. how likely is the occurrence of the event.
- What is at stake i.e. what could potentially be lost or what is the cost of the risk.
- The risk mitigation i.e. what can be put in place to prevent the risk from occurring. If risks are realised then they pose a threat to the success of the project meaning that the project may not deliver on time and on budget. It is therefore imperative that controls or preventative actions are put in place to ensure that the risk does not happen. To be meaningful, the mitigations need to be realistic and achievable and using the SMART goal framework can help to ensure this. In other words, all risk mitigations should be: Specific, Measurable, Achievable, Realistic and Time-Bound.
So you have got as far as setting up your risk register and filling it up with risks and mitigations? What do you next and how do you use it?
During the course of a project, the risk register does evolve slightly. It is a live document and becomes a reference point which is to be monitored and updated, noting that some risks will be short-term and will close and new risks will arise and need to be dealt with.
A risk register is a great tool to keep your Project Board and senior management aware of the risks associated with their project so that they are not surprised if a risk does materialise and helps them focus on what is important in a project to avoid delays and project failure, and what risks should be prioritised for action. As key milestones occur in a project, the risk register can be used to highlight new and emerging risks and help plan ahead. For example, as you approach go live, it can be really useful to pull together all the existing and new relevant risks and review the mitigations to see if they need changing to ensure a successful go live.
Why you need to be talking about project risks
Project Boards can be reluctant at times to talk about project risk. It has the potential to make them nervous talking about events that may or may not happen and sometimes clients can feel that the risk may be perceived as a criticism of their culture or organisation. I have heard project risk management described as the “brussels sprout” of project management because it is the vegetable no one wants to eat and it can be kicked around the plate before being cast to one side! Talking about project risk is healthy and necessary in the same way that eating vegetables is good for you so next time your project manager raises the topic of risk, embrace the difficult conversation to protect the success of your project.