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 make 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 project 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 build risk management plans and guard against inevitable risks, issues and changes.
1. Risk Register
The fundamental risk management tool is the risk register. Basically, what a risk register does is identify and describe the risk. 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 the 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.
2. 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 asks the following questions:
- 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, download our free SWOT analysis template and go through the acronym.
Begin with strengths and determine which aspects of the project are secure and well-positioned. 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 comes 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 are 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.
4. Risk Assessment Template for IT
While this tool was developed for IT projects, it can be expanded to speak to any project. What an IT risk assessment template offers is a numbered listing of the risks, along with the control environment, control activities and any additional pertinent information.
One of the most unique aspects of the risk assessment template 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.
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. Get started with our free Risk Matrix template.
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 are of 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, and 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 as a Risk Management Tool
Whichever of the above tools or techniques you use, they are exponentially helped when using ProjectManager. 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.
Manage Risks in Real Time with ProjectManager
Use ProjectManager’s risk management features to identify, track and resolve project risks. You can create risks as task cards, assign them, set a priority, add a tag and more. Set the risk status as open or close and use the dropdown menu to avoid, mitigate, transfer or accept the risk. You can keep track of the risk in real time by monitoring it on the project menu.
Create Automations to Trigger Instant Risk Alerts
With ProjectManager, you can create automations to alert key people on your team when risks escalate or deescalate. Set simple, yet powerful rules with our system, triggering notifications if costs, timelines or other project statuses fall off schedule.
ProjectManager is online project management software that’s suited for every aspect of controlling 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 can help with your risk management by taking this free 30-day trial today.