Risk Identification

Chapter(2)Risk Identification

When and Where OccursRisk identification occurs through each of the four phases of project development:PlanningScopingDesign/Plans, Specifications and Estimate (Engineers Estimate)ConstructionAs projects evolve through project development so too the risk profile evolves project knowledge and understanding grows.Identified risks may change New risks identified throughout the life ofthe project.Risk Identification: Inputs, Tools and Techniques, Outputs

Risk Identification Inputs:Defined projectDefined ScopeDefined scheduleEstimateRisk Identification Tools and TechniquesTry to identify as many risks as possible that may affect project objectives.State the assumptions for risk identification and analysis and delineate thresholds for risks.Documentation ReviewsPeer level reviews of project documentation, studies, reports, preliminary plans, estimates and schedules are a common and early method to help identify risks that may affect project objectives.Information GatheringBrainstorming Formal and informal brainstorming sessions with project team members and extended project team members such as specialty groups, stakeholders and regulatory agency representatives is a technique for risk identification.This technique can be scaled for use on the simplest to the most complex projects. This technique can also be tailored to specific areas of interest for the project risk,Information GatheringLessons Learned Database Searching for lessons learned that are relevant to your project can provide an abundance of information on projects that may have faced similar risks.

Information GatheringOther methods: There are many techniques, some common techniques include: questionnaires and surveys interviewingChecklistsexamination of the Work Breakdown Structure for the project asking what-if questions, for example what-if the taxes were increased.

Risk Identification OutputsAn expected deliverable from Risk Identification includes a preliminary risk register which documents the following information:Identification # for each risk identifiedA unique number is assigned to each risk for tracking purposes. If available this can be done utilizing an established Risk Breakdown Structure (RBS).RBS - Example

Risk Identification OutputsDate and phase of project development when risk was identifiedDocument the date the risk was identified and which project development phase (planning, scoping, design/PS&E, construction).Risk Identification OutputsName of Risk (does the risk pose a threat or present an opportunity?)Each identified risk should have: an appropriate name, for example NEPA Delay or Reduction in Condemnationthe nature of the risk with respect to project objectives (threat or opportunity) should also be documented. This can be done using the Risk Breakdown Structure (RBS) for naming conventions.Risk Identification OutputsDetailed Description of Risk EventThe description must be provide information that is Specific, Measurable, Attributable (a cause is indicated), Relevant, and Time bound (SMART). The description must be clear enough and thorough enough so that others reading about the description of the risk will understand what it means.Risk Identification OutputsRisk TriggerEach identified risk must include the risk trigger(s). Risks rarely just suddenly occur; usually there is some warning of imminent threat or opportunity. These warning signs should be clearly described and information about the risk trigger should be documented. For example: NEPA Approval Date may be considered a risk trigger on a project that has a risk of a legal challenge, or other as appropriate.Risk Identification OutputsRisk TypeDoes the identified risk affect project schedule, cost, or both?Potential Responses to Identified RiskDocument, if known, possible response actions to the identified risk, responses for threats include:AvoidedTransferredMitigated AcceptedResponses for opportunities include: ExploitedShared orEnhancedRisk Identification OutputsComments about Risk IdentificationRisk Management is an iterative process.risks should be reviewed regularly as new risks are identified they should be documented and assessed. The resulting risk register should only be considered preliminary until the completion of additional and appropriate activities.How to Identify RiskDetermine risk thresholds for the project (establish a minimum dollar amount and time duration considered significant for the project under evaluation).Focus on identifying large significant risks which affect project objectives.Carefully document and describe risks in a risk register.HELPFUL HINTS FOR RISK IDENTIFICATION

Determine, for your project, what constitutes significant risk.Thoroughly describe the risk there is a form in the following pages to help with this or you may create your own.Include specialty groups and/or other persons who may have meaningful input regarding the challenges the project may face.Determine who owns the risk and who will develop a response.Risk IdentificationTable 2.1

Figure 2-1 Blank template for documenting identified risks (tailor to your needs).

Figure 2-2 Example of how template is used.

Figure 2-3 Risk Breakdown Structure for categorizing and organizing risks.

Figure 2-3 Risk Breakdown Structure for categorizing and organizing risks.

Figure 2-4 Example of risk identification using spreadsheet from Project Management