Project Risk Management
Risk management applies to organisations as a whole as well as to projects.
Business risk management is considered here.
A risk register helps everyone understand what they must do to manage risks.
We approach this subject through the establishment of a framework and a process. The framework is tailored to the organisation to ensure that it meets the purposes and culture. The process identifies the risks and how they will be managed.
Risk Management is an inherent and essential part of all business management. In many texts it is associated specifically with financial and insurable aspects, but it rightly belongs to business and organisational activities overall. Recognising this, every business, every project and every programme should include continuous acknowledgement of the risks involved, and a robust approach to the management of those risks. The overall context for this approach may be simplified as ensuring that the residual risk is acceptable, meaning that
‘If a risk is unacceptable, the project cannot be taken on or continued’.
This makes risk management the most important aspect of project, programme and business management. If you know the risks to your business and to the projects you engage in, you are in a position to mitigate them, to manage them, and to make them acceptable. All organisations need to understand the risks they face.
No project should begin without an assessment of the risks.
There was a time when Risk Management was simply part of Project Management. The strategy was developed, major potential problems considered, and appropriate action agreed. At that time risks were rarely recorded and the means by which they would be managed were not clearly stated. The essence of what has become regarded as the process of Risk Management has become an organised and recorded part of the best-run projects. It is common practice to provide a written statement of what the risks are and how they are treated, and how regularly they are reviewed.
Facilitation of Risk Management exercises is at the core of our work.
The Risk Log
- Understanding risk management and gaining acceptance of the purpose;
- Developing a framework to make sure that the purpose can be met;
- Agreeing and then running a process to complete the risk register;
- Reviewing this to confirm that it does meet the requirements;
- Agreeing a risk review process to keep the register up to date.
The Issues Log
In parallel with the risk log it is useful to create and maintain an issue log identifying questions when they arise, and the agreed solutions.
Issues are often defined as risks which have occurred, but there are many issues that will arise during a project which will not have been in the risk log and for which you will need a resolution. Having an issue log enables you to keep track of these issues and of the resulting decisions. These will be important for their relationship to changes within the project and for any cost and time effects.
The structure of an issues log is similar to that of the risk log bit there is a fundamental difference: issues have happened and need to be resolved whereas risks might happen and need to be managed. Key points that might be included are:
- Exactly what the issue is;
- When it was raised and when it needs to be resolved;
- Why it matters;
- Who will make the decision;
- How it will be communicated.
For an informal discussion on the creation and maintenance of risk logs and issues logs for your project please contact us.