Project Risk

Register
PREPARED BY
SARBAJIT ROY CHOUDHURY

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  Introduction
 Importance of Risk Register
 Risk Register Advantages
 Contents of a Risk Register
 Risk Register Content Definitions
 Risk Register Preparation Steps
 Defining the terms of Qualitative Risk Analysis
 Risks in Construction Projects
 Sample Risk Register for Project
Content 

Review of Risk Register
Updating the Risk Register
 References

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Introduction
 A risk register is a project management tool that allows project team to assess, plan for and mitigate risks. As part
of a larger contingency plan, a project risk register is a reference document that allows stakeholders, project
managers and team members to be aware of potential risks involved in any given project.

 Essentially, a risk register is a risk management tool. It is a tool that ensures business continuity, but it is more
than that. It takes various risks that could put your project in jeopardy, and it measures them.

 A project risk register is a master reference document that allows complete transparency among the three facets
of a project: project managers, team members and stakeholders. Once complete, the risk register lets everybody
know what the project is and the foreseeable risks involved.

 Risk registers provide project managers with a list of risks identified, stated clearly and assessed as to their
importance to meeting project objectives. The risk register can lead directly to risk handling, such as risk
mitigation.

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Importance of Risk Register
 Managing risk is strategically working to control the potential issues that are most likely to occur when you’re
managing a project. Therefore, a mechanism need to be in place to collect potential risks and then map out a
path to get the project back on track, should those risks become realities.

 The first thing to do is identify the risks. Projects are all different, of course, but for organizations that run similar
projects year over year, there might be historical data to review to help identify common risks to those types of
projects. Additionally, the PM can anticipate some risks based on market forces (supply and demand risks, for
example), or based on common staffing or personnel issues, or even based on the weather.

 To collect the possible risks that can show up when managing a project requires a systematic approach to make
sure the team is as thorough as possible. The project risk register is a system, which can then track that risk if it in
fact appears and then evaluate the actions that have been set in place to resolve it.

 When registering these risks on a spreadsheet it is required to have a place to put all this data and follow the
specific risk throughout the project, thereby seeing if the actions that have been put in place to remedy the risk
are working. A risk tracking document therefore keeps the risk on a tight leash so it doesn’t run ruin over the
project.

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Risk Register Advantages
 There are several advantages and benefits that project team members can gain from having a project risk register tool.
To make them easier to remember, they’re called the seven C’s: consistency, compactness, concision, commitment,
completeness, control and communication:

Consistency Compactness Commitment Completeness

The risk register is
To achieve The risk register is By completing the Communication
a complete
consistency, a master project risk The most essential
document as
project risk document, it register with the role that the risk
Concisions complete plans
register must enables a degree input of your Control register takes is
are in place for
conform to a of compactness By using a table project managers, A risk register tool that of a
prevention and
standard It enables the rather than a the team allows a measure communication
contingency
This is essential project manager lengthy written members and the of control that is tool
Using a tabular
because risk is to communicate document, the stakeholders, you otherwise not The effort you go
layout rather than
relative much more risk register forces receive a level of possible through when you
a lengthy written
By achieving a effectively you to be concise commitment and Project managers create the risk
document, you
consistent risk The risk register engagement are all too familiar register will enable
include all the
scale and can paint a In other words, with the need to everyone involved
information that
communication picture that can you include only By gathering the control as much to understand what
you need and
method, be referenced in a the information input from the of the project as a risk is, the level of
none of the
everybody minimal amount that is needed project team they can. This risk that certain
information that
involved comes of time using without any involved, it helps level of control activities can have,
you don’t
under the same visuals in a tabular commentary the team reduces risk and prepare your
When it comes to
understanding layout rather than members to fall team to mitigate
mitigating risks, a
about what is searching through behind the risk risks before they
measure of
being text during a register and happen
completeness is
communicated. possible crisis support it
essential

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 Contents of Risk
Register
It is sure that risk exists and that
when managing a project, it
requires a system to identify and
track
Risk register content will be the
following:
Risk id, risk description, risk
impact, likelihood,
consequences, risk ranking, risk
trigger, risk prevention plan,
contingency, risk owner, residual
risk

Typical Risk Register Contents

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Risk Register Content Definition
 Risk ID - a unique identifier for the risk
 Date raised - the date the risk was identified
 Risk description - best written as 'There is a risk that xxxxx, because of xxxx if this occurs it will xxxx’
 Likelihood - How likely is that the risk will occur. Can be 1- 5 or High / Medium / Low
 Impact - What will the impact be if the risk occurs
 Severity - Likelihood x Impact
 Owner - The person who will be responsible for managing the risk
 Mitigating action - Actions that can be taken to reduce the likelihood of the risk occurring. May also be acceptance of
the risk or transference of the risk e.g. insurance.
 Contingent action - What will be done if this risk does occur. Usually actions to reduce the impact on the project
 Progress on actions - A regular update on progress of the mitigating actions
 Status - For example Open, Waiting, Closed, in Progress etc

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Risk Register Preparation Steps
Risk Identification Phase
 Risk category
 Risk description
 Risk Id

Risk Analysis Phase

 Risk Impact
 Likelihood
 Consequence

Risk Evaluation Phase

 Risk Rank or Score
 Risk Trigger

Risk Treatment Phase

 Risk Prevention Plan
 Contingency Plan
 Risk Owner
 Residual Risk

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 Risk
Identification
The risk register starts with a list
of risks that may affect the
project’s ability to achieve its
objectives. Risk identification
starts with the risk breakdown
structure
The purpose of the risk
breakdown structure (RBS) is to
encourage people to think of
risks that may originate outside
of their “stovepipe.”

Sample Risk Breakdown Structure

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Risk Identification
Risk Category
Every project has various categories. Some categories are specific to the project or organization while
others are standard on every project. Examples of standard project categories include time, scope and
cost. As the risk register acts as a reference document, include every possibility you can think of. This
includes categories such as environmental or other key categories.

Risk Description
This is where we describe each risk briefly. This is quite possibly the most time intensive task when it
comes to making your risk register. It also helps to have the input from other team members, project
managers and possibly even stakeholders. Identify as many risks as you can and put them in the proper
category.

Risk ID
On a tabular layout, the risk ID is the very first column. Used for communication purposes, the risk ID is
an identification number you assign to each and every risk. Make sure to follow a standardized format.

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Risk Analysis Phase
 After the identification and labeling all the possible and foreseeable risks, arrange a meeting
together with the department heads so that you can analyze each risk and the impact they may have
on your project or business as a whole

Project Impact Likelihood Consequence

In this step take each Put together a scale This defines what will
risk and play with the that will show the happen if the risk is
idea as if the risk had probability of the triggered. If staying
actually occurred. given risk actually within a budget is of
What can happen to occurring. Having a high importance, then
the project/ Risks of scale from 1 to 5 or 1 any risk that can put
going over budget, to 10 will put you over budget would
over time, or risk of everybody on the be considered a high
not focusing on the same page so that risk
project at all can be everybody knows the
addressed likelihood of various
risks happening.

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Risk Evaluation Phase
 This is the phase where you evaluate all your risks and decide how important each risk is and what
can trigger each risk event to occur

Risk Rank or Score

Combine the likelihood and
consequence of each of the
risks. If you’re using a scale of Risk Trigger
1 to 5 for each one, multiply What may trigger the risks? For example, if
the numbers together and you have a resource conflict risk, then
you get your risk rank. If consider putting a contingency plan in place
you’re using a low medium if the resource conflicts have not been
high scale, then take some resolved by a specified date. In other words,
time to think about the look for things that can trigger the risk and
likelihood and consequence then have a contingency plan in place so that
of each risk and rank each you can mitigate the risk before it occurs.
one accordingly. If the
likelihood of a risk is low and
the consequence is high,
then the risk rank would be
medium

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Risk Prevention Plan
 For each risk, plan that you have in place to prevent each risk. Not all risks can be avoided. Therefore, this is
designed to reduce as much risk as possible, so we have complete control of your project.

Contingency plan Risk Owner Residual Risk

This is the person or group of The word “residual” means
A contingency plan in place people that oversees left over or recurring. This is
should the risk occur. For managing the risks. For most the residual risk that is left
each risk, consider a detailed risk, no one single person is over after a risk event occurs
plan so that everybody usually at fault. Therefore, a in the contingency plan has
knows what their place is in risk owner is not the person been carried out. In most
the contingency plan for who can completely prevent cases, the residual risk is
business continuity a risk. A risk owner is rated as “Low.”
someone who handles
overseeing the prevention
and contingency plans.

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Defining the Terms of Qualitative Risk Analysis
 Probability the risk will occur with some noticeable impact on the project. The project manager needs to determine
which probabilities would be scored between very low to very high, inclusive
 The definitions of impact should be set by the Project Manager for the levels of very low, low, moderate, high and very
high impact, by objective (time, cost, scope and quality)
 The structure of the probability – impact matrix is also the responsibility of the project manager. That means which
combinations of probability and impact will cause a risk to be assessed red, yellow or green.

Likelihood Assessment Severity Assessment

Rank % Qualitative Rank Value (US $ million) Qualitative
1 < 10% Very Unlikely 1 Below 1 Minimum
2 11-25% Unlikely 2 >1 - 5 Low
3 26-75% Likely 3 >5 - 10 Moderate
4 76-90% Very Likely 4 >10 - 30 High
5 >91% Extremely Likely 5 > 30 Maximum

Sample Likelihood and Severity Assesment

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Defining the Terms of Qualitative Risk Analysis
Risk Ranking Matrix Risk Ranking
5 3 3 4 5 5
Critical 5
Likelihood

4 2 3 3 4 5
3 2 2 3 4 4 Very High 4
2 1 2 2 3 4 High 3
1 1 1 2 3 3
Medium 2
1 2 3 4 5
Severity Low 1

Sample Risk Ranking Matrix Sample Risk Ranking

Response Strategy Description

Avoidance Avoid the risk event all-together

Reduction Reduce the impact or the probability of the risk event

Retain-Unpriced Accept that risk exists & its potential consequence; price is not factored in estimate

Retain-Priced Accept that risk exists & its potential consequence; price is factored in estimate

Accept that risk exists & its potential consequence; prepare contingency plan in case risk event
Retain-Contingent
occurs
Transfer Shift the risk contractually to another party

Sample Risk Response Strategy

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 Risks in Construction Projects
 Each project is unique and will have its own set of risks
 Some of the most common risks (not limited to) in a large construction project are highlighted below:

Project Risks

Contract Financial Risk

Country • Payment
Material Risk
Client Risk • Cashflow
Risks • Escalation • Retention money • Specifications
Labour Risk Equipment
• Political Stability &Project • Extension of • Taxes and Duties • Availability
• Economic time • Monopoly • Availability Risk
stability Risk • Termination
• Subsequent
legislation • Local rules • Unions • Availability
• Immigration and • Client default • Suspension • Cement • Labour laws • Unions
• Currency risk
Labour laws • Complexity of • Liquidated • Steel • Quarantine period • Monopoly
hedging
• Currency the project damages • Release of • HT Strand
exchange rate • JV risk • Variation retention money • Sand
and banking laws • Defect liability • Performance BG
period

Operational Risk
Site Access Design Risk • Utility shifting
• General access • Existing utilities
• Inhouse design
• Site access • Force majeure
• Consultant design
• Land for temporary • Dewatering
• Client design
use • Ground conditions
• New construction method

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Sample Risk Register for the Project

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Review of Risk Register

Review at Corporate Level/HO by Review at site level by project team

Tendering Department & Risk Team and joint review with Risk Team at HO

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Updating the Risk Register
1. The risk register need to be reviewed and updated at regular intervals (monthly & quarterly) to update the status
of the listed risks in the register and also adding new risks (Ex: COVID-19 pandemic) as and when necessary
2. The below flowchart shows the brief procedure of adding new risks in the risk register:

Choose the
Describe new risk in Describe mitigation
Identify new risk appropriate response
detail measures in detail
strategy

Calculate the
Mention the
monetary impact due
responsible party or
to the risk occurring or
person
for mitigation

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References
1. [Link]
2. [Link]
3. [Link]
4. [Link]

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