Risk Log
In Projects, the most unavoidable aspect is Uncertainty, even the most proficient Managers faces difficulty to handle it. Various techniques are used by them like decision milestones to be expected outcomes, risk management for prevention of disasters and some uses computational procedure taken from previous projects to get indemnity of Desired deliverables, nonetheless, the project runs out of scheduled time, Increased Budget and compromise with the quality. Or sometimes it may fail. (Managing project uncertainity: Froam variation to chaos, 2002) Conventional tools and activities are used such as work breakdown structure, Schedules and cost estimate all are proposed to be related to Risk Management. Though, the key management tool is Risk Log/Register. It is a record of identified risks, including results of analysis and planned responses. It is used in a range of project management activities; for example, it is one of the tools to control the project, to document lessons learned, or is used in procurement planning. (How to DO projects, 2017) The Log for Risks is mainly used to document the Unforeseen risks which Come into the picture at the time of the project life cycle. And this document helps To Assess the risks for future projects and makes us prepared in advance for the unforeseen risks which now becomes foreseen risks for the next project. This article will try to explain How to create Risk Log for a project with a probable format and the application tools of using it in Risk management. Moreover, the article will try to show the correlation of different aspect of risk management in the relation of Risk log. Risk log involving various input activities done by Project managers Such as risk identification, Assessment, treatment and monitoring the status of risk.
Risk Identification
Throughout the life cycle of projects, various risks may arrive with different impact on the project in terms of Time, Scope and cost variations. Moreover, the new risks may become foreseen ones as the project progresses and the level of impact on the project may change with the progress of the project. Sometimes the risk may have negative effect defined as ‘Threats’. (How to DO projects, 2017)The Risks should be documented in the Log describing its Service line as per the Work breakdown structure, date of identification and the stage of the project in which it is identified.
Risk Assessment
Risks are assessed in terms of its occurrence, impact on the project and key stakeholders. The assessment of risks includes estimating the probability of incidence rate and the corresponding value for project objectives if the risk does occur. We must prioritize with an agreement to the assessment taking into the frame the time, cost and stakeholders and much we should accept it. In most of the cases the risks are assessed with probability impact score, and this can be only done by experienced person. The word PIRA is used in case where assessment is done based on probability impact.
In this process, the description of risk is needed in the context of its causes and implications to the project and these can be recorded in the log with nomenclature so that it can be compared later. The nomenclature should be very precise and proper causes should be mentioned with realistic approach, also defining the implications and impacts in terms of capital is favorable as it justify the most. For instance the Example: If (event) occurs due to (driver), the consequences could result in (impact).
The Risks can be rated as per its objective in relation to cost, time, scope and quality, on the other side with its likelihood of occurrence and recorded in the log with some numeric or colored representation. Figure 1 Shows the classic version of rating the risk on Numerical scale.
Figure 2 shows the latest version of assessing the risk impact in conjunction with the stakeholder’s involvement. Like in the figure it shows that risks having a high probability of occurrence and critical impact on business are categorized in the red zone and are a concern for Senior management. (How to DO projects, 2017)
To make it more accurate Probability Impact risk assessment is done based on numbers rating with coded colors it makes easier for Project managers to see the risk and act accordingly with prioritizing the critical ones. For example in the figure 3 we can see the impact is scaled on the basis of numbers set to different range of cost incurred in risk to that of percentage range for probability of occurrence assigned to different numbers.
The rating can be done using this type of matrix with a number and colour.
