Soothsay Your Risk Register

William lives and works as an IT project manager in South Florida, and is a member of the South Florida chapter of PMI. He created StatisticalPERT.com.

  Estimating   Risk Management  

If you could look at your project’s risk register, then peer into a crystal ball and foretell which risks will occur sometime during your project’s execution phase, would that be helpful? And if you could tell your project sponsor, with 90% confidence, how much risk contingency you need to protect your project—would you be interested? You can—by becoming a risk soothsayer.

This doesn’t have anything to do with divination. Let me show you how to soothsay your risk register using a special Microsoft Excel® template to do risk analysis.

Before I do that, though, let’s consider how risk analysis is typically done. Usually, risks are simply put into an Excel template like this one, and if they’re given at all, risk probabilities and impacts are deterministically determined. A risk has a “low” or “medium” probability of occurrence, but there’s no definition for what that means (so there can be no alignment about that definition). And risk impacts are “medium,” “high” or “very high”—but what does that mean? Too often, deterministic risk analysis neither brings about stakeholder alignment, nor does it improve project decision making.

Wouldn’t it be better to know that, under existing conditions of uncertainty, you expect up to four of the 15 risks in your…

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