Risks and Issues in Project Management
The clear recording, management and reporting of risks and issues, and the corresponding mitigating actions, has a significant and positive impact on the confidence that stakeholders have in the successful delivery of a project.
What is a project risk? A ‘risk’ is an uncertain event or series of events that, if it were to happen, could result in the project failing to meet one of its objectives, and which needs to be actively managed and mitigated.
What is a project issue? An ‘issue’ is an unplanned event that has occurred or is seen as unavoidable, that may result in the project failing to meet one of its objectives, the effects of which need to be actively resolved.
Within a project team, although the project manager has ultimate responsibility for managing the risks (although s/he will not likely own them all), risk and issue management is something that should be shared by the project team and should also be seen as everyone’s responsibility.
In handling a risk, there are 4 key strategies:
- Treat: take actions to reduce or remove the risk
- Tollerate: understand that it exists but take no action against it (maybe taking action will, for example, cost more than the risk impact)
- Terminate: Avoid the risk by taking a different course of action, for example, using a different supplier
- Transfer: pass the risk onto someone else (taking insurance is an example of transferring a risk)
What activities are involved in managing risks and issues for a project? The project manager and the project team should:
- Review the project for new risks and issues on a regular basis – this is not a one-time activity! Risks and issues can crop up at any time throughout the lifecycle of the project.
- Ensure their risks and issues are recorded in a way that they can easily be shared, understood and managed.
- Provide a concise and clearly expressed description of the risk or issue and the associated mitigating actions.
- Ensure that the risks or issues are assigned to an appropriate governing body or group.
- Actively mitigate the risks and resolve the issues that they own.
- Provide regular updates for their risks or issues to the project team and other stakeholders, as appropriate.
- Escalate or transfer any risks or issues that they cannot mitigate or resolve without further support.
- Ensure the key risks and issues are reported to the appropriate governing bodies.
- Keep an overview of all risk and issues within the project to ensure proper and controlled management of risk.
In today’s collaborative, online project management tools, like 5pm & Wrike, the integrated central document storage gives project managers and their teams the ability to create risk and issue registers and store them in a single location available to all interested parties.