It helps you plan
One key item on a risk register is the action plan that you’ll take to manage the risk. For example, you might have some tasks to do to mitigate against the risk happening, or you might have some contractual negotiations to do if you plan to transfer the risk to another party.
These items need planning, just like any other project task. So your risk register serves as a place to ‘find’ additional actions that need to go on your main project schedule. All project tasks take work, and you may have to reorganize your team members’ priorities in order to get these risk management actions done in a timely manner. You’ll get a complete picture of their workload if you include the risk management tasks in your resource plans and project schedule.
It helps you get your priorities right
Which risks are likely to have the biggest impact on your project? If you don’t know this already, your risk register can help. With all the risks captured in one place, you can easily go through them and establish which has the largest impact. This will help you schedule your risk management actions, as you can put the most resources on managing the biggest risks.
It also helps with your reporting – project sponsors aren’t going to want to read about 120 different risks every month, but they will want to know the latest status of the top 5.
It helps you prepare your budget
Have you factored the cost of managing project risk into your project budget? Many project managers don’t, and then when they come to implement their risk management action plans, find that they don’t have the money to carry out the required tasks. The project team will have to work additional hours on these tasks, and some of your risk management items may incur additional costs, like the legal fees for negotiating insurance contracts for risk transference. Many mitigating actions will also cost money as you put your ‘Plan B’ in place, just in case.
These costs should all be added to your project budget. It’s likely that you won’t know what you want to do about all the risks (and you probably won’t know about all the risks, either) when the project starts, so make sure that you have some budget allocation for risk management activities.
If you don’t have the funds to manage all the risks in the way you planned, you’ll have to prioritize, so go back to your risk register log to work out how to spread the budget between the highest priority risks. There’s no point spending lots of money on a risk that isn’t really a great worry!
It helps you get ownership for action plans
The risk register also includes the name of the person who owns the risk. This is a separate field, and the risk owner is normally someone from the project team who is taking responsibility for seeing through the action plan related to that risk. They will most likely work with others to complete the risk management activities, but for the purposes of ownership and reporting, they are your main contact.
Having this documented in the risk register is a good way to ensure that people know they are responsible and are prepared to step up and see that the work is carried out. Try to spread the responsibility around so that subject matter experts become responsible for risks in their field of expertise, otherwise you’ll end up managing them all and that will become very difficult.
Convinced about the value of a risk register? I hope so! If you don’t already have a risk register on your project, now is the time to set one up. If you do have a risk register, when was the last time you dusted it off and updated it? Check that every risk has a priority and an owner, and check that the actions are costed, included in your budget and noted on your project schedule. Then you’ll be prepared for whatever comes you way!
Are you using a Risk Register in your projects?