Project managers employ various tools to complete tasks on time or overcome potential obstacles. One of the common tools they use is a project risk register.
A risk register is used to assess any risks your project may face, and it’s a crucial component in project management because it helps managers fight potential setbacks proactively.
While the risk register is mainly focused on projects, there are other circumstances where this tool is helpful as well, for instance, in manufacturing or product launching.
Another component of a risk register is a document known as a risk register log which tracks down potential risks and contains information about task priority and its likelihood of happening. If the risk becomes a larger threat, the team is ready to act immediately and prepare a solution.
What does a risk register include?
A risk register project management includes a list of the following items. Risk logs may differ depending on who is drafting them, but some general steps go as follows:
- Risk descriptions – brief risk overview
- Risk category – proper classification
- Risk likelihood – the chance that risk will happen
- Risk analysis – how will the risk affect the project
- Risk mitigation – suitable response plan
- Risk priority – how vital is the risk compared to others
- Risk status – progress of this plan
The majority of risk registers contain a couple of essentials like risk mitigation, likelihood, and identification. These parts work together to gather a fluid log of information on potential risks.
Additionally, these logs can help project managers look back when they are engaged in another project or face similar risks.
Moreover, fields you shouldn’t skip are identification, description, and priority. The more specific you get, the better you will be prepared to manage risks.
Usually, the more complex your project is, the more detailed your risk register should be. That’s why it’s crucial to be as specific as possible, mainly if your project includes multiple stakeholders.
Why do you need a risk register?
As your project gets bigger and longer, staying on top of everything becomes more challenging. If you don’t track and monitor risks regularly, you may miss or forget something.
Even though some risks may seem small and insignificant, they can affect your entire project. Here are some examples:
- Security/data risks (stolen materials or hacked data)
- Legal risks (litigations or changes in laws that can affect your project)
- Hazardous events (storm damage, flooding, or fire)
- Disruption in supply chain
Risk management is all about identifying problems and finding ways to handle them. Additionally, this technique empowers project managers to pay close attention to their projects and shows them how to track risks.
When you identify a risk, you might think it’s a minor disturbance, nothing to worry about. But what if the risk becomes bigger when a project moves along? By monitoring risks, you can notice changes and take action on time. With the help of a risk register, you can rank risks according to their priority:
- Low priority: includes risks like scheduling errors or lack of communication, leading to missed deliverables.
- Medium priority: extra or unplanned work. Additionally, your team may struggle with unclear objectives or productivity.
- High priority: theft and data breaches can cost your company a lot of money; therefore, they must be addressed immediately.
You can easily identify risk priority once you know when to use the risk register.
Is a risk register the same as a risk assessment?
A risk register is typically a document that lists all the risks, identified either by the company or a project manager, in order of importance. On the other hand, risk assessment is a process that identifies a particular risk, evaluates and priorities it. Risk assessment also includes a risk register, risk maps, plans, control activities, and communication protocol.
At the same time, project managers can use risk assessment as a means of qualitative and quantitative evaluation of a particular risk. Therefore, you can expect to have a wide range of probable outcomes should risk happen. You will also be expected to impose relevant measures towards resolving the risk.
According to this assessment plan and its results, you can eliminate, minimize, manage, bypass, or outsource the risk.
How to write a risk register?
As we already mentioned, a risk register contains a lot of information that can be challenging the first time. Even though you know what information to include, getting started can be tricky. That’s why we have set up a list that you can use to create a risk register:
- Name: Design delay | This log identifies risk, and it’s a good idea to brainstorm potential risks with your team.
- Description: The design team has too much work, resulting in project delay | It’s crucial to keep this description as basic as possible. If it’s too vague, your team members won’t know whether the risk has become a real issue or not.
- Category: Schedule
- Probability: Very
- Analysis: medium
- Risk management: contract a freelancer who will deal with graphics | In this case, you choose to outsource service, or you can do the heavy lifting by yourself.
- Priority: 3 | Not all project risks have the same priority, and some of them might have a more significant impact than others.
- Ownership: Michael Moore | Each risk needs to have its owner.
- Status: In progress | Use this column to record notes.
Now that you have a project register example, it’s crucial to explain a couple of its logs. You could start by creating your template. The main focus of the risk register is to record information on potential risks.
However, you shouldn’t get too caught up in the details. Make sure to adjust the risk register according to the needs of your team. For instance, some teams will require fewer fields, while others may need something more complex.
What does a good risk register look like?
A good risk register includes all the logs we previously mentioned. Without them, you won’t be able to correctly identify the risks and evaluate their impact on your project. After all, the risk register is a living thing, and it’s susceptible to changes.
Every information you log might change in no time; additionally, it’s important to note that risks evolve; they don’t stay the same, so your perspective might change. Opportunities and threats may disappear or become irrelevant throughout the project, so you may not need to apply risk register logs.