Risks, Issues, Change Requests, and Action Items › Manage Project Risks › Create a Risk

Create a Risk

A risk is a potential future event that has a positive or negative impact on a project objective. Identify the risks early in a project to become aware of potential effects on the project scope, schedule, budget and other factors. In this scenario, the team decides to mitigate the limited resources risk by employing external resources. The project manager creates a detailed risk providing all the information and selects Resource Availability from the Category drop-down list.

If the overall score for a detailed risk differs from the rating you assigned to it, the two risk management components interact. The score of the detailed risk overrides the rate you assigned. If you create a detailed risk without assigning rates, scores from the risk entries color the appropriate factor in the list. Deleting a detailed risk changes the project overall risk score and the combined risk score for that particular risk category.

Follow these steps:

1. Open the project and click Risks/Issues/Changes.
2. Click New.
3. Complete the fields in the General section. The following fields require explanation:

   Category

   Defines the category to which the risk belongs.

   Values:

   • Flexibility - The project is not adaptable.
   • Funding - The project funding is not allocated or is available with constraints.
   • Human Interface - The user interface (UI) is poorly defined.
   • Implementation - Uncertainties exist in the implementation effort and user acceptance
   • Interdependencies - The project is dependent on other projects.
   • Objectives - The requirements, objectives, scope, and benefits are unreasonable, unclear, not measurable, and not verifiable.
   • Organizational Culture - The project requires changes to the organization culture, business processes, procedures, or policies.
   • Resource Availability - The internal resource availability is uncertain and external resources are required.
   • Sponsorship - The sponsorship is not clearly identified and committed.
   • Supportability - It is not easy to support the project in the future and requires major updating.
   • Technical - The project technology is unproven and new internal or external expertise is required.

   Note: When you specify a risk category, the overall risk score overrides any differing status selection you make for the risk category or factor.

   Owner

   Defines the name of the resource who is managing the risk. This resource is responsible for verifying that the risk is managed and tracked appropriately through its life cycle.

   Default: The resource currently logged in.

4. Complete the fields in the Details section. The following fields require explanation:

   Impact Date

   Defines the date by which repercussions from this risk could affect the project. If you identify an impact date, enter a date in the Target Resolution Date field.

   Default: Current date

   Assumptions

   Defines the assumptions that determine that this item could be a risk. You can verify these assumptions to help ensure that they continue to be valid through the duration of the risk life. If the assumptions change, the impact or probability of the risk can also change.

   Associated Risks

   Defines the risks within the project that are associated with this risk. You can only link this risk to risks within this project.

   Associated Issues

   Defines the issues within the project that are associated with this risk. You can only link this risk to issues within this project.

   Response Type

   Defines the type of response you want to make with this risk.

   Values:

   • Watch. You do not want to respond to a risk. This type is typically assigned for any risk whose calculated risk score is low. Though the risk probability or impact is not sufficient to warrant an action, you still want to keep the risk open and monitor it.
   • Accept. The risk exposure is accepted, and in some cases, there is no intent to pursue the risk.
   • Transfer. You want to transfer the risk to a different project. Once transferred, you can close the risk.
   • Mitigate. You want to apply a risk response strategy to resolve the risk.

   Default: Watch

   Note: In this scenario, select Mitigate.

5. Complete the fields in the Quantify Risk section. The following fields require explanation:

   Probability

   Defines the probability that the risk can occur. The risk probability is used to calculate the risk exposure.

   Values: Low (1), Medium (2), or High (3)

   Default: Low

   Calculated Risk

   Displays the score calculated based on the selections you make in the Probability and Impact fields.

   Values:

   • 1 - 3 (Green). The calculated risk is low.
   • 4 - 6 (Yellow). The calculated risk is medium.
   • 7 - 9 (Red). The calculated risk is high.

   Impact

   Defines the effect of the risk on the project. The effect of the risk on the project performance, supportability, cost, and schedule determines the impact. This value is used to calculate the risk exposure.

   Default: Low

6. Attach a document which provides valuable background on the risk, its mitigation or effect on the project, if any in the Attachments section.
7. Complete the following fields in the Resolution section. The following fields require explanation:

   Resolution

   Defines the final resolution of this risk once the risk is mitigated. The resolution data is useful for recalling the outcome of a risk response strategy when planning or approaching future project risk plans.

   Note: You can define a resolution while creating the risk, or before closing it.

   Residual Risks

   Specifies the risks encountered or created within the project as a result of the mitigation that is taken to resolve the risk. Unlike associated risks, residual risks do not share similar outcomes, but result from an action you take in resolving a risk.

8. Save your changes.