What is a risk register and how to create one
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In today’s competitive environment, businesses must deliver products faster and more frequently to maintain an advantage. Executing multiple projects at once can increase risk factors, and identifying, monitoring, and mitigating these risks is critical to meeting your project goals and maintaining customer satisfaction.
Managing risks, from identifying their potential impact to planning your response, can help keep projects moving forward rather than derailing progress. Successful businesses often rely on a risk register to identify, document, and address risks throughout the project lifecycle. This guide discusses what a risk register is, its basic components, and how to create one.
Get started with a free Confluence risk assessment matrix template.
What is a risk register for project management?
A risk register is a project management tool for evaluating, prioritizing, and addressing risks to projects across your business. It serves as a central repository for identifying risks so project managers and teams can effectively track and mitigate them. Understanding risks and their implications and priorities can help streamline workflows and ensure you keep your projects on track.
Tools that provide a connected workspace are the foundation for implementing an effective risk register. Confluence allows teams to create, edit, and share information in a central repository for an updated, single source of truth. With a risk register template, teams can get started quickly, develop mitigation plans, and track risks throughout the project lifecycle.
Key components of a risk register
Risks come in many forms, including data security, legal compliance, and supply chain issues. A risk register should consider all the potential risks your project may face, no matter what category they fall under.
There are four key components of a risk register:
- Risk identification: Assigning an ID number and name helps track the risk throughout the project timeline. Adding a brief description of the risk keeps everyone on the same page when referencing or working on it.
- Risk assessment: This includes analyzing the risk and assigning it to a category based on schedule, budget, or scope. Identify the likelihood of the risk and its outcome using qualitative impacts, such as customer satisfaction, or quantitative impacts, such as cost. These factors will help you prioritize the risk.
- Risk response: Determine your response to the risk and document it in a risk response plan. Using a central repository such as Confluence for the response plan allows everyone to access and respond according to the plan.
Risk ownership: Assign a knowledgeable owner responsible for the overall risk, including the response plan.
When to use a risk register
It’s never too early to begin using a risk register. Teams often identify risks in the project planning and product discovery phases, which is an excellent time to start tracking, assessing, and strategizing how to address risks. Continue using the risk register throughout the project lifecycle.
Project changes are common, and reassessing risks and looking for new ones should be part of managing change. You should also include the risk register in standard project reviews with stakeholders to keep them informed.
Benefits of using risk registers
Understanding risks early, analyzing their impact, and creating a plan for addressing them can help keep your project on schedule and within budget. The following are some of the benefits of using a risk register.
Proactive risk management
Identifying every risk early might not be possible, but you can identify a large percentage through project collaboration. Teams that include risk identification in each phase of the product and project management lifecycles identify solutions early that they can build into the project plan.
Improved communication
A proactive risk management approach allows teams to coordinate early, understand the goal, and work together to mitigate risks. That way, when new risks arise, teams have a standard process for capturing, analyzing, assigning, and planning the response. Using collaborative tools such as Confluence provides a current source of truth about any risk at any time.
Enhanced decision making
The risk register provides project managers and stakeholders with clear information about each risk and its impact. It reduces or eliminates the guesswork.
For example, a risk may seem like a high priority when you first identify it, but analysis may reveal that you can mitigate it quickly or easily. On the other hand, a risk that seems fairly low priority when you first identify it may become priority number one after the analysis. The risk register helps focus attention on the most important risks first.
Documentation
Tools such as Confluence help teams collect and maintain all information related to the risk, such as severity, impacts, response plan, and the person responsible, in a single repository. This single source of truth ensures that teams work from the same understanding of the risk, no matter where they’re located or what team they’re on.
Accountability
Assigning an owner to each risk in the register improves productivity by ensuring that the right people are working on the response plan. Scheduling, reviewing, and updating the risk register during project review meetings and throughout the project life cycle maintains a real-time snapshot of progress. It allows you to change priorities or adjust schedules as you resolve risks or new risks arise.
Task management software such as Jira can help track the progress of the work from identification to resolution.
Limitations of risk registers
A clear and easy-to-follow process can help overcome many of a risk register's limitations. However, identifying some risks, such as equipment malfunction, may be difficult, leading to gaps in the risk register.
Risks can evolve, and keeping the register current is important to ensure it reflects the latest information. Training team members on risk assessment, scoring or prioritizing, and providing complete and accurate data helps ensure the effectiveness of the risk register.
How to create a risk register
To create an effective risk register, use a standard process and provide training to the entire team. The following are steps to create and maintain the risk register.
Identify risks
Begin with a brainstorming session that involves the entire team. Different people bring varying perspectives and knowledge to areas others may not have insight into.
For example, a developer may recognize compatibility issues that require additional software purchases, and finance may see budgetary risks associated with unexpected purchases. External partners may also have first-hand experience and can detail the risks they’ve encountered. During this step, collect as many different perspectives as possible.
Assess risks
Assess the risks using a standard scoring process. Apply the same standard to each risk, whether financial, technical, security, quality or another kind.
- First, determine the probability of the risk occurring using a number scale for high, medium, and low.
- Then, assess the potential impact on the project using the same number scale for high, medium, and low.
- Finally, calculate the risk score by multiplying the probability by the impact.
You can quickly identify high probability/high impact risks by their score and prioritize them first.
Plan risk responses
Develop strategies to reduce the likelihood and impact of each risk. A collaborative team environment can help, as team members bring unique experiences and insights. Plan the specific actions to take if the risk materializes.
Having an action plan in place allows the team to respond and resolve issues immediately if they materialize, allowing the project to continue. It also provides information for other team members, such as finance, early in the project.
Include high probability/high impact risks in your roadmap software tool to ensure all stakeholders are aware.
Assign risk ownership
Assign an owner who understands the risk's nature and impact in detail. This may be a developer with experience in cybersecurity or a partner relationship manager possessing experience working with suppliers. The owner is responsible for researching additional information or solutions, updating the risk register with new or changing information, and requesting additional resources if necessary.
Monitor and review risks
Keep the risk register updated regularly to ensure it correctly reflects changes to existing risks and progress on the planned actions and captures new risks. The project review meeting should include reviewing the risk register, but having a separate and regular risk register meeting is good practice.
New risks arise and identified risks change throughout the project. Making the risk register meeting a standard part of the project management lifecycle, including updating Gantt charts and timelines, can reduce surprises and keep the project on track.
Using risk register templates
Using a risk register template allows teams to get started quickly identifying and tracking risks. Confluence risk register template helps teams collect the necessary information, determine the severity and impact, and document the mitigation plan in case the risk becomes a reality. The template you choose should allow you to collaborate in a connected environment and provide the basic building blocks for tracking risks throughout the project lifecycle. With shared information, when risks require action, everyone on the team is aware of the plan and can immediately get to work.
Assess your risk with Confluence for a smoother project journey
What you don’t know, can hurt you. Understanding your project risks and preparing mitigation plans before they arise can make the difference in keeping your project on schedule, ensuring product quality, and maintaining your budget.
Confluence organizes knowledge across teams, projects, and goals, bringing order to chaos. It allows you to find what you want, and discover what you need. With company-wide and project-related knowledge in a centralized place, surfacing important information has never been easier. Collaboration through real-time editing and inline comments allows the entire team to maintain velocity and move the business forward, as well as easily share information with the broader organization.
The Confluence risk assessment matrix template helps fast-track the process. It walks you through identifying and assessing risks, developing a planned approach, documenting ownership, and tracking changes. Get started for free.