Risk is inherent in project management and so is the need to create a risk management plan to control it. That methodology is called risk management, which is as important as planning to making sure a project comes in on time, within budget and of quality.
The better a project manager identifies and responds to risk, the better the outcome. That’s why there are never enough risk management tools and techniques to have at your disposal when planning for a project.
Risk Management Tools & Techniques
The following are some of the best risk management tools and techniques that professional project managers use to manage their projects against the inevitable risks, issues and changes.
1. Root Cause Analysis
The root cause is another way to say the essence of something. Therefore, root cause analysis is a systematic process used to identify the fundamental risks that are embedded in the project. This is a tool that says good management is not only responsive but preventative. Get started with our free root cause analysis template.
Often root cause analysis is used after a problem has already come up. It seeks to address causes rather than symptoms. But it can be applied to assessing risk by going through the goals of any root cause analysis, which ask: What happened? How did it happen? Why did it happen? Once those questions are addressed, develop a plan of action to prevent it from happening again.
SWOT, or strengths, weaknesses, opportunities, threats, is another tool to help with identifying risks. To apply this tool, go through the acronym.
Begin with strengths and determine what those are as related to the project (though this can work on an organization-level, too). Next, list the weaknesses or things that could be improved or are missing from the project. This is where the likelihood of negative risk will raise its head, while positive risk come from the identification of strengths. Opportunities are another way of referring to positive risks and threats are negative risks.
When collecting SWOT, illustrate your findings in a four-square grid. The top of the square has strengths to the left and weaknesses to the right. Below that is opportunities to the left and threats to the right. The left-hand side is helpful to achieving the objective of the project and those on the right-hand side are harmful to achieving the objective of the project. This allows for analysis and cross-reference.
3. Risk Assessment Template for IT
While this tool was developed for IT projects, it can be expanded to speak to any project. What a IT risk assessment template offers is a numbered listing of the risks, to keep them in order, and then an out that risk is and the control environment. It provides a space in which to collect the risks of a project, which is also helpful when executing the project and tracking any risks that become reality.
One of the aspects of the risk assessment template for IT is that the spreadsheet has a built-in calculator that figures out the likelihood of a risk in fact occurring and then multiples that against the impact it would have on the project or the organization. This way, a project manager knows the potential harm of the risk and so can prioritize their response to it if or when the risk happens.
4. Risk Register
Similar to the risk assessment template for IT is a risk register. Basically, what a risk register does is identify and describe the list. It then will provide space to explain the potential impact on the project and what the planned response is for dealing with the risk, if it occurs. Furthermore, the risk register allows a project manager to prioritize the risk, assign an owner responsible for resolving it and gives a place to add notes as needed.
The risk register is a strategic tool to control risk in a project. It works to gather the data on what risks the team expects and then a way to respond proactively if they do show up in the project. It has already mapped out a path forward to keep the project from falling behind schedule or going over budget. Pick up a free risk register template here.
Once you’ve identified your risks, consider adding them to a project management software. As opposed to a static Excel sheet, project management software can let you track your risks in real time as projects unfold. ProjectManager, for instance, has an automated dashboard that gives you a high-level view of your project at a glance. Whether your team executes their work in the Gantt chart, task list, kanban or sheet view, all of your data goes into the dashboard for easy risk tracking. Try it free.
5. Probability and Impact Matrix
Another tool for project managers is the probability and impact matrix. It helps prioritize risk, which is important, as you don’t want to waste time chasing a small risk and exhaust your resources. This technique combines the probability and impact scores of individual risks and then ranks them in terms of their severity. This way each risk is understood in context to the larger project, so if one does occur, there’s a plan in place to respond or not.
6. Risk Data Quality Assessment
With a risk data quality assessment technique, project managers use data that has been collated for the risks they’ve identified. This is used to then find the level to which information about the risk is relevant to the project manager. It helps the project manager understand the accuracy, reliability, quality and integrity of the risk as related to the collected data about it.
For each risk listed, the risk data quality assessment requires that the project manager determine the extent of the understanding of the risk, collect what data is available, what the quality and reliability is for that data and its integrity. It is only by examining these parameters of the risk can an accurate assessment be reached.
To begin the brainstorming process, you must assess the risks that could impact your project. This starts with reviewing the project documentation, looking over historic data and lessons learned from similar projects, reading over articles and organizational process assets. Anything that can provide insight into issues that might occur during the execution of the project. Once you’ve done your research, start brainstorming with anyone who might have insight.
A variant of this is the Delphi technique, which is when a request is sent to experts and they reply anonymously. Or the project manager can interview experts, team members, stakeholders and others with experience in similar projects.
Using ProjectManager.com as a Risk Management Tool
Whichever of the above tools or technique you use, they are exponentially helped when using ProjectManager.com. Having the risk assessment and tracking tool in your larger project management software keeps everything under one roof and accessible to the whole project team. With our software you can upload your spreadsheet of risks and turn it into a project, which can be assigned and tracked.
Use ProjectManager.com to Track Risks with the Kanban Project View
Once the project is being executed, using our kanban board is a great way to take those identified risks and track them. The kanban board can be your risk management tool, with columns to sort risks, risks being worked on and risks that have been resolved. Under each of those column headings are kanban cards. Each card is an individual risk, which now can be assigned to an owner, who will be responsible for shepherding it through the process of resolving the risk.
Because kanban is a visual workflow tool, teams can see what needs to be done when and project managers have an overview of the risk management process. Of course, the kanban view can be used as a project before the project begins in earnest to collect risks and then when the project is executed it serves to manage the risk management process. Being prepared for risk in projects is what keeps projects on track and successful.
ProjectManager.com is a cloud-based project management software that is suited for every aspect of control a project, including managing risk. With kanban boards, risks can not only be identified and prioritized, but worked on collaboratively when they arise and resolved before they take a project off-track. See how ProjectManager.com can help with your risk management by taking this free 30-day trial today.