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What is a risk register, and why is it important?
Even the simplest task is bound to go awry when you hope for the best but don’t prepare for the worst. Therefore, conducting a thorough risk assessment is one of the fundamental aspects of the project’s launch preparation process. At Develtio, we’ve adopted a very meticulous and scientific-like approach to managing project risks. We dedicate a lot of time and resources to creating risk registers because we know the effort is worth the prize. Read on to learn about Develtio’s way of handling risky business.
The definition of risk
A risk can be defined as a problem or an obstacle that may (or may not) occur throughout the project. There are five main types of potential risks in software development projects:
- Schedule risk
- Cost risk
- Requirements risk
- Quality risk
- Operational risk
The risks above can be allocated to either of the following risk categories:
- Business
- Project
- Technical
The risks are assigned and classified during the risk assessment stage of the project. A separate meeting is held to discuss the specific risks and create a risk register. The meeting with the development team is owned and led by a Project Manager.
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It’s all in the register
A risk register is a document containing all identified risks, a description of their nature, and potential mitigation measures. The first step to creating a comprehensive risk register is drafting a risk matrix. At Develtio, we use the following risk assessment methods:
- Delphi Method (a.k.a. Expert Method) – when subject matter experts are present on the team, and we rely on their experience to determine and define the most probable and threatening risks.
- Brainstorming Method – our favorite one. All members of the development team participate in updating the risk matrix. During the brainstorming session, risks scope, potential impact, and likelihood are discussed. The most threatening and highly probable risks are then marked and defined.
- Probability estimation method – the Project Manager comes up with the list of potential risks and estimates the degree of likelihood for each event separately.
- Consequences estimation method – The PM estimates the scope of consequences for each listed risk and assigns the priorities accordingly.
- Pareto principle method (a.k.a. 80/20 rule) – the assumption is that 20% of all potential risks may affect 80% of the project’s outcome. That 20% remains the sole focus of the risk assessment process throughout the project’s lifecycle.
In reality, we use the hybrid of Delphi and Brainstorming methods more often than any other combination of risk assessment methods. Over the years, we found it to be the most effective approach.
Copy and paste? We don’t risk it
There are no shortcuts when it comes to building risk registers. Every single project we take on gets its own risk matrix built from scratch. Even though some projects may seem nearly identical at first glance, we know the devil is in the details. The risks are simply not interchangeable. A different team assigned to the project, a different budget set, or a different commercial environment – several aspects can generate varied risks for outwardly similar projects.
Define, assess, and ADDRESS
Once we have our risks defined and assessed, we always make sure to address them. We do it by assigning a person (or a team) responsible for the risk throughout the project. Every major and highly probable risk gets its own “guardian” to constantly monitor and counteract the threat if needed.
During every project sprint (which occurs on a bi-weekly basis), we discuss where we’re currently at with the risks. The “risk guardians” report the situation to the rest of the development team and other stakeholders. We consider performing routine risk control checks a vital element of the process, even with relatively simple and hassle-free projects. Furthermore, at the end of every project, we analyze the risks (both occurred and avoided) and draw conclusions for the future.
To sum it up
Creating a comprehensive risk register isn’t an option – it’s a must. And that statement rings true regardless of the size of the project. At Develtio, we know that cutting corners when it comes to risk assessment can be a recipe for disaster. Surely, many expected risks often do not materialize anyway. But when they do, we’re always there, locked and loaded. And that sense of security is what you get when you decide to work with us. Do you like the idea? Get in touch with us, and let’s talk about your project. You don’t risk anything, after all.
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