Mistake Not Identifying and Assessing Risks in a Standardized Fashion

As presented previously, there are four steps to implementing a risk management system: identify, assess, respond, and document.

Tracking System One popular method of tracking risks is to begin by having project team members submit their issues in a common centralized database. Although this may sound difficult to establish, one such database could be a simple Excel spreadsheet with various columns for the required information. Exhibit 2 contains sample fields that could be maintained in the database.

Exhibit 2. Critical Risk Information

Risk

Management Step

Information

Identify

Risk description

Identify

Identified by

Identify

Identified when

Assess

Quantify Impact (funds allocated, project work hours, or project duration)

Assess

Quantify likelihood (e.g., likely = 85 percent, Probable = 60 percent, and Possible = 25 percent)

Assess

Calculate loss (impact * likelihood)

Assess

Quantify urgency (related to the need for timely action)

Respond

Proposed solution (could be prevention, mitigation, or acceptance strategy)

Respond

Person(s) assigned to complete solution

Respond

Date of expected resolution

Respond

Work hours expected to resolve risk

Respond

Approver that ensures the resolution properly met the risk

Respond

Contingency plan (plan to enact if proposed solution does not materialize)

Respond

Trigger event (event for which it is determined that contingency plan needs to be enacted)

Monitoring Once the risks have been identified, they should be monitored weekly (possibly even daily in critical times). The desired result of such analysis is to attempt to ensure 100 percent visibility into the project. One benchmark to follow is to ensure that the top three risks are analyzed on a weekly basis (even better if the top ten risks are analyzed). To assist the monitoring process, it is helpful to segregate risks between those that relate to the project (which should mainly be reviewed by the project team with some oversight by business owners) and those to which only the business owners can respond.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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