Risk Register – How to Prepare and Update a Risk Action Plan?
The risk register is often discussed in the context of IT projects. However, the truth is that such a register can be used in projects of any type and size, and it is even recommended. Based on risk analysis, a document is created that facilitates risk management and helps prepare for unforeseen situations. A well-prepared risk register can protect a business from failure.
Risk management involves a series of actions aimed at facilitating project oversight in relation to risks. The key element here is risk identification – it allows for the assessment and classification of events based on their impact on the project or business. These identified threats are then placed in the risk register. Moreover, this is not a final document. While basic risks are included during the preparatory phase of the project, the document must allow for updates and modifications to accurately reflect the current situation.
Let’s start with the basics. What exactly is a risk register?
What is a risk register?
This term appears in reference to PRINCE2, a project management methodology based on products. Another name used by some organizations and businesses is the risk log. Formally, it is a document containing information about threats as well as ways to counteract them.
A risk register should be:
clear and understandable
specific and in a simple format
easy to modify and update
indicating best practices
written in simple language
In short, a risk register is an extremely helpful tool in minimizing the impact of threats on the course of a project and its schedule. Through risk analysis, you can prepare for unforeseen situations that arise during the execution of tasks and plan how you will manage each risk. This way, you will increase your chances of successfully completing a project phase.
How to Prepare a Risk Register?
A properly prepared risk register enables the identification and monitoring of all threats that may impact a project. With this tool, you can track risks and respond to or resolve them appropriately. It is crucial that the risk register includes only specific and understandable information and focuses on what is most important at any given moment.
It is important to emphasize that the risk register is not created in isolation but involves the entire team associated with the risk area. At PBSG, we first focus on planning the overall work and establishing a list of individuals collaborating within the project. In addition to typical documentation analysis by auditors and consultants from PBSG, we organize workshops with client-side individuals linked to specific processes. This is a very important step because the risk register is based on the input and knowledge of the project manager, team members, and even end-users of the project. Thanks to their engagement and brainstorming, a list of potential threats is created, for which an action plan needs to be developed. These meetings are also an excellent opportunity to address any concerns and point out other potential risks that may arise.
Preparing a risk register requires experience and expertise. It is essential to understand the project itself as well as the specifics and needs of the organization. Thanks to our long-standing collaboration with organizations, local governments, institutions, and Polish entrepreneurs, we are able to identify areas and risks that the client may not even be aware of. The role of PBSG (and similar entities) is to support the client and prepare the risk register in such a way that it becomes a transparent, understandable, and easy-to-apply document in practice.
How does a risk register look?
A standard example of a risk register is an Excel spreadsheet. In addition to this, it can take the form of a simple document or a database system, but the table format is the most common for a risk register. This is because a table allows for placing a large amount of information in an organized and clear manner, all on a small number of pages.
There is another solution. There are more specialized tools on the market that help manage risks more efficiently. An example is the erisk software, which enables the integration of processes and planning of team activities in accordance with an established methodology. Furthermore, the tool provides full control over risks, as well as the ability to update the risk register while maintaining its history, allowing for easy comparison and monitoring of changes over time.
Regardless of the solution used, there are several elements typical for every risk register. The key components are defining and describing the risk, its status, the probability of its occurrence, and its impact on the project. For probability, a scale of 1-5 is commonly used.
What does a risk register contain:
- Unique Risk ID: Helps quickly locate the risk in the document.
- Date of Entry: The date when the risk was recorded in the risk register.
- Risk Description: A detailed description of the risk, specifying what could cause it.
- Risk Status: Whether the risk is open and active (requiring review) or closed.
- Impact on the Project: An assessment of how the risk could affect the success of the project.
- Risk Weight (Priority): The impact multiplied by the probability of occurrence.
- Risk Owner: The person or group responsible for managing the risk.
- Action Plan: The actions that will be taken to eliminate or minimize the likelihood of the risk materializing.
- Risk Mitigation Plan: Actions to limit the impact of the risk after it occurs.
In most projects, the project manager is responsible for creating and updating the risk register. Although they oversee the document, the identification and assessment of risks are carried out by the entire project team.
How to prepare a risk register step by step
Let’s use the description of our offering here, as it reflects step-by-step how a risk register is created, regardless of the industry and the organization’s specifics. The first step is to define the scope of work. The schedule and actions depend on whether you want to update the risk register or are creating it from scratch. Regardless of the situation, the most important step is the needs analysis – and that’s where we start.
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How a risk register is created:
Step 1. We assess the processes in your organization. We look not only at the format of the documents but also at how they have been communicated to employees, including whether they are aware that such registers and procedures exist.
Step 2. Next, we create a summary report. We identify any discrepancies and provide recommendations on how they can be addressed. The document will be prepared in a clear, understandable, and specific manner.
Step 3. We assist in implementing the necessary actions and filling in the identified gaps. We create documentation (new or additional), such as regulations, templates, and forms, depending on the needs.
PBSG’s tasks are not limited to auditing the risk register or designing a new risk log. We offer support at every stage of a project related to risk management. Therefore, we assist companies not only in updating the risk register but also in automating it by implementing the erisk tool, of which we are the exclusive distributor.
Why should the risk register be updated?
When creating a risk register, it’s important to ensure that it is easily modifiable. Updates should be possible at any stage of the project. A re-evaluation allows for assessing whether a particular risk has increased or decreased due to the actions taken. Importantly, the update of the risk register should be a subprocess and is recommended at the end of each phase of the project. This way, management control gains valuable data that can be used for further planning.
A risk register is typically created in the early stages of a project. Even the preparation for the project and needs analysis lays the foundation for creating such a document. However, this doesn’t mean the risk register should only be prepared once and then forgotten about. On the contrary! The risk register requires regular updates throughout the entire duration of the project. Only in this way will you maintain full control over events that may change over time.
Remember: risk evolves over time, and new threats may emerge. Regular review and updating of the document in terms of identifying and assessing risks during the project is essential.
The project manager can update the risk register, or you can use the services of a company specializing in this – this is what we do at PBSG. By using the help of our experts, you can be sure of a personalized approach, extensive knowledge, and transparency. We focus on clear and understandable language, which is why we can provide recommendations covering not only the risk register but also its format.
A full description of the offer can be found here: Do you want to have an up-to-date risk register?
The advantage of creating a single, always up-to-date document that includes identified risks and their assessment is that you get information about threats in one place. Risk identification (and, consequently, the risk register) should be created with the organization’s established goals and tasks in mind. Only a well-prepared risk register guarantees that your team will fully understand the threats and their real impact on the business.
