How can you develop a system for tracking and managing project risks?

1 Identify risks

The first step is to identify the potential risks that could impact your project. You can use various techniques, such as brainstorming, interviews, checklists, surveys, or historical data, to gather information from different sources and perspectives. You should involve your project team, stakeholders, customers, and experts in this process, as they may have valuable insights or experience. You should also review the project scope, requirements, assumptions, constraints, and deliverables, to identify any gaps, uncertainties, or dependencies. You should document the identified risks in a risk register, which is a tool that records the risk name, description, category, cause, and effect.

2 Analyze risks

The second step is to analyze the probability and impact of each risk on your project. Probability is the likelihood that the risk will occur, and impact is the severity of the consequences if it does. You can use qualitative or quantitative methods, or a combination of both, to assess these factors. Qualitative methods involve rating the risks using scales, such as high, medium, or low, or numeric values, such as 1 to 5. Quantitative methods involve using numerical data, such as estimates, statistics, or simulations, to calculate the expected value, variance, or distribution of the risks. You should update the risk register with the results of your analysis, and assign an owner to each risk.

3 Prioritize risks

The third step is to prioritize the risks based on their probability and impact, and determine which ones require more attention and resources. You can use various tools, such as a risk matrix, a risk score, or a risk map, to rank the risks and classify them into different levels of urgency and importance. You should also consider the risk tolerance and appetite of your project team, stakeholders, and customers, as they may have different views and expectations on how to deal with the risks. You should review the risk register and adjust the priority of the risks as needed.

4 Monitor and control risks

The fourth step is to monitor and control the risks throughout the project lifecycle. You should develop a risk response plan, which is a strategy that defines how you will prevent, mitigate, transfer, accept, or exploit each risk. You should also implement the risk response actions, and track their progress and effectiveness. You should communicate the risk status and updates to your project team, stakeholders, and customers, and solicit their feedback and input. You should also review the risk register and update it with any changes, new risks, or resolved risks. You should perform regular risk audits and reviews, and document the lessons learned and best practices for future projects.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?