All projects involve some risk. The earlier these are identified, the sooner they can be evaluated and countermeasures, where necessary, put in place. For this reason, risk identification in project management needs to begin during the start-up phase. Typical threats to projects might include:
A change in management policy or strategy
Changes in legislation
A failure or delays to the implementation of new technology
Withdrawal of a partner
A suppliers failure to deliver
Greater than anticipated resistance to the project
Budget cuts
Loss of project personnel
Loss of public support or adverse public opinion
Failure or delays to an interfacing project
Poor estimation of time or cost.

Risk Responses
In deciding what countermeasures are appropriate, a number of factors need to be taken into account:
The magnitude of the risk in terms of its probability of occurrence and the impact it would have
When the risk might occur
The practicality/cost of any response to the risk.
Risk responses can be defined in five broad areas:
Prevention taking action to stop the threat occurring or preventing it from impacting on the project
Reduction taking action to reduce the likelihood of the threat occurring or limiting the impact it has on the project
Transference passing responsibility for the risk to a third party, for example, by taking out insurance cover
Acceptance tolerating the risk either because nothing can be done at reasonable cost, or the magnitude of the risk is at an acceptable level
Contingency planning actions to take in response to the risk occurring.
In practice, we usually give consideration to both mitigating and contingent action when determining our response.
Although the Project Board has ultimate responsibility for risk, the Project Manager is responsible for ensuring risks are identified, evaluated, recorded and regularly reviewed. Ownership for each risk should be allocated to an individual who becomes responsible for monitoring the risk. Risk owners may include members of the Project Board.
Risk Rating
As mentioned above, our response to any risk is partly influenced by the magnitude of the risk. We calculate this by multiplying the probability of the risk materialising by a factor that indicates the seriousness of the impact. In practice, unless you have a lot of data to draw on, the risk rating will be subjective, based on assumptions of the likelihood of something happening and the probable consequence. However, it is still a useful exercise as it allows us to compare risks against each other and gauge whether or not we should be making a positive response or simply accepting the risk as being too low not to cause concern.
The Risk Register
Information about risks should be recorded in a risk log or risk register. This is a dynamic document that is updated and added to throughout the project and subject to periodic review. It is usually presented in a spreadsheet format and includes:
Risk Reference
Description of the risk
The impact (H/M/L)
The likelihood (H/M/L)
The date the risk was identified/defined
Countermeasures
The risk owner
Status/Comment

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