Project Risk Identification Process
Developing a Comprehensive List of Threats and Opportunities
Jul 1, 2009
Whenever a plan for a new project is in progress, many of the stakeholders (particularly the executive staff) want the project to have the least risk with the largest gain. They generally ask, "What are the possible risks for this project?" At this stage, a complete/ comprehensive list of risks and opportunities is desired.
Define the Risk Identification Process
Risk Identification is the process which seeks to understand the project, determine which risks are likely and document the characteristics of the risks. It is mostly concerned with opportunities and threats. Risk identification is never really completed until the project is also completed. It is a process which is undertaken throughout the life of the project.
The approach one must take is to gather as much relevant data as possible and schedule a risk management meeting with the core team members. Including the core team members is the surest way to secure support for a structured and thorough approach to identifying risks.
Tools and Techniques of Identifying Risks
The most common tools and techniques used for developing a list of project risks are brainstorming, nominal grouping technique, mind mapping, Delphi technique and lessons learned from similar projects.
1. Brainstorming
The steps involved are as follows:
- Chose a facilitator other than the project manager;
- Chose a scribe to capture the risks and opportunities;
- Use a category or categories to start the creativity flowing; Do not judge or analyze during this effort; and
- Focus on getting the universe of risks and opportunities for the project.
2. Nominal Grouping Technique
The steps involved are as follows:
- Gather the core team for a risk workshop;
- Use flip-chat paper or a white board the collect the information for the team;
- Begin by requesting that each person identify potential areas of risk;
- Request that each person write about three (3) to five (5) risk events for each area. Participants should not share lists;
- Request that the first person provide the first item on his/ her list then proceed to the next person and repeat the request for his/ her first item; and
- Repeat until everyone's items have been listed.
This helps to avoid duplicate listings of the same risk(s) and also saves time taken to perform this task.
3. Mind Mapping
The steps involved are as follows:
- Begin by drawing a circle that represents a risk category;
- Represent major risks for that category with lines connecting with the circle;
- For each major risk, identify smaller risks that are part of that risk;
- Do not judge or evaluate at this point; and
- Continue until no more risks can be identified.
At the end of this activity, there should be a fish bone diagram that shows the different relationships for each risk.
4. Delphi Technique
The steps involved are as follows:
- Identify a person to act as the facilitator;
- The facilitator identifies qualified experts to participate in the exercise;
- The facilitator poses questions to the experts individually;
- The facilitator then conducts a factor analysis on the data to identify common themes;
- This information is shared with the panel of experts for validation;
- The list of themes is refined and again shared with the panel; and
- The facilitator then creates a single results document.
5. Lessons Learned from Similar Projects
The steps involved are as follows:
- Identify comparable projects using the project characteristics;
- Locate the relevant post project review reports;
- Review the lessons learned documents for a list actual risk events that occurred, response(s) to the risk event, effectiveness of the risk event and any new risks identified during the project.
Additionally, categories such as cost, schedule, technology, resources, environmental, legal, economic and political can be used to group risk. Personal experience and intuition (thinking outside the box) are also quite useful in risk identification.
Involving the stakeholders early in the project opens communication and there is less risk of interpreting what the stakeholders want and/ or require.
Make sure that there is an adequate amount of the correct information. By applying more than one of these various tools and techniques appropriately, the list of risks and opportunities will be the most comprehensive.
At the end result of the risk identification process the project teams knows what may happen and what will be the impact. The team understands the source and can estimate when it may occur.
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