A risk is something that could harm a project. Due to the nature of projects being unique and bringing change, they are inherently uncertain, based on assumptions, and therefore attract risk. Risk management is, therefore, a continual and essential process throughout the project lifecycle and a pivotal process to assuring the project will achieve its objectives.
If a risk becomes a reality, then it is regarded and managed as an issue.
Solverboard provides a systematic approach to the identification, assessment, monitoring and controlling of risk, including:
- Identification and description of the risk
- Evaluation in the form of the likelihood of occurring and the size of the impact should it happen in the dimensions of time, cost and performance (project outcomes)
- Proximity – when is it likely to impact by
- Response strategies – fallback and mitigation actions
- Risk score based on Probability * Impact
- Risk budget – using the Expected Monetary Value technique based on probability x cost impact for all risk to create a risk budget contributing to the overall project budget.
- Click on the ‘Monitor’ tab.
- Click on the ‘Risk’ tab.
- Click the ‘Add a Risk’ button.
- Add a title for the risk.
- Describe your Risk. A clear and concise risk description will help ensure full team understanding and also ensure that any mitigation actions are focused on addressing the cause of the risk. To aid this, we recommend the following meta-language in describing a risk:
“There is a risk that [uncertain event] caused by [cause] resulting in [impact]”.
- Estimate the proximity date – this is the date the risk is likely to impact before.
- Set the probability of the risk occurring (0 to 100%). Please note that by definition a probability of 100% is no longer a risk, it is a reality, and should be treated as an issue.
- Assess the impact the risk will have on:
- Cost – this is expressed as a monetary value and will be used in the calculation of your risk budget. The cost impact should resemble the cost to enact the fallback strategy should the risk occur.
- Time – expressed in weeks this is the time impact the risk will have on the project
- Performance – showed as high, medium and low; this is the impact the risk will have on project performance, reputation or outcomes.
Using the P*I technique, Solverboard will calculate a risk score based on your organisation pre-determined risk calibration scales. Please refer to risk calibration for more information.
- Define your fallback strategy; this is should all other response plans fail, and the risk still impacts, what you plan of action will be.
- Set the appropriate status. ‘Open’ for a live risk. ‘Impacted’ for a risk that occurred and is now managed as an issue. ‘Averted’ for a risk that was either avoided or did not occur.
- Assign an owner – the person best placed to manage this successfully.
- (Optional) check ‘Create another Risk’ to repeat the process.
- Click ‘Save’ to save this risk and/or activate the creation of another one.
Depending on the risk score and your organisation's appetite to risk will determine your appropriate response plan. If the risk is tolerable, you may simply choose to accept it and keep a watch on it. If the risk cannot be transferred or absorbed by other means (such as insurance), then your course of action will be to reduce its likelihood of occurring or the impact, should it happen. This reduction response is enacted through mitigation actions.
To continually assess the risk, update the status and create actions to mitigate.
- Click on the Risk.
- Click the pencil icon to edit
- Make any amends to the text fields and change the owner if appropriate.
- Update the probability of occurrence and time, cost and performance impacts
- Update the status field as appropriate
- Click the 'Save’ button on the top bar to save your changes.
- Create any actions to further mitigate the risk (see action process).