TIPS  to  Monitor   RISK

Risk: an uncertain event that, if it occurs, has positive or negative consequences on one or more project goals (or objectives)

Monitor Risks: The process of monitoring the implementation of Risk Response Plans, tracking identified risks, identifying and analyzing new risks, and evaluating risk process effectiveness.

Why do we need to monitor risks? We need to know if:

  • the responses we enact are effective and appropriate

  • the level of overall project risk has changed

  • status of individual identified risks has changed

  • the time for the risk to occur has passed

  • new project risks have arisen

  • our risk management approach is still valid

  • current risk assumptions are still valid

  • risk policies and procedures are being followed

  • contingency reserves, set aside for risk responses, need adjustment

 

In planning Risk Management after identifying risks, and analyzing the identified risks, we planned risk responses  and implemented those responses which fell into these types:

 

  • Avoid

  • Mitigate

  • Transfer

  • Accept

For risks we wanted to "Actively accept," we developed Contingent Risk Responses to be enacted if and when the risk arose to a predetermined level called the trigger. We also considered having a Fallback Plan which is the plan you will use if your Contingent Response strategy fails to provide the needed result. We entered risk information on a Risk Register. This initial Risk Register is below.

It is now Day 8 and we have the following updated information:

  • The float passed the safety test, so Risk 1 has passed by with no added cost.

  • One of the bands charged $300 more than we planned (Risk 2)

  • Joan spent $100 to print a back up plan

  • We put the volunteers on stand by at no additional cost

How to MONITOR (INSPECT) RISK:

At this point it is handy to look back at your Gantt chart, found here. 

     1.    Compare plans to actual outcomes. How is quality tracking? Is your project

            slipping in time? Are the resources arriving as planned. Are you still on

            budget? Answers to these questions can be early indicators of a pending

            risk.

     2.    Watch your contingency reserve. Is this fund going down faster than

            expected? What has happened to require spending from the contingency

            fund? Knowing the reason for excessive contingency spending is also an

            early indicator of a pending risk, that extends beyond cost.

     3.    Has the risk probability passed? Risks are often associated with project

            activities. After an activity has been completed, any risks associated with

            doing that activity will not occur (the probability is zero).

 

 

ANALYSIS:

  • Risk 1 did not take any money at all from the contingency reserve fund.

  • Band quotations are still coming in. We already spent $300 on this risk (Risk 2).

  • We spent all the contingency reserve set aside for Risk 3, but that risk will not cost more because Joan completed the back up plan.

  • Risk 4 was a no-cost risk.

CONCLUSIONS:

  1. Only Risk 2 is of concern for possible additional cost at this time. We should consider getting alternate bands, having fewer bands, or getting an increased approval to the budget.

​   2. We likely will likely spend the total $900 contingency reserve fund and may 

       even come up short.

 

NOTE: In instances where you do not expect to spend all of the contingency reserve fund, you should consider releasing some of the fund back into the organization for other uses.

How to CONTROL (CORRECT) RISK:

Controlling Risk is done by enacting your pre-planned Risk Responses. You will then want to monitor carefully to ensure that:

  • the response properly addresses the Risk

  • the response does not create a new issue or risk

  • the Risk does not return

FINAL NOTES:

   1.  The Risk data gathered in the course of doing a project becomes valuable

         information for new projects. It is also needed when responding to an audit so

         document well!

   2.  When the risk response does not properly address the risk, you should

        escalate the conversation to your supervisor, sponsor, and key stakeholders.

        They should be made aware that the planned response did not work, and they

        should be involved in helping you plan the next step.

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