PMI Risk Management Professional (PMI-RMP)

Develop risk register

Concepts

A crucial aspect of risk management is developing a risk register, particularly for the Project Management Institute Risk Management Professional (PMI-RMP) exam. The register helps keep a record of all the identified risks, their status, and plans for risk mitigation. By the end of this article, you should have a full understanding of how to develop an effective risk register and how it applies to the PMI-RMP exam.

Define Risk Register

Risk register, also known as risk log, is a risk management tool used to identify, assess and track project risks. Additionally, it aids in planning appropriate responses for each risk. It ensures transparency of information, aids in decision making, and increases awareness of potential issues to the project stakeholders.

Creating a Risk Register

In the PMI-RMP exam as well as in real-world projects, developing a risk register typically comprises four basic steps: Identify risks, analyze risks, prioritize risks, and plan responses.

Identify Risks: The risk register begins with identifying potential risks that may derail a project’s objectives. Team members and stakeholders should take part in risk identification to ensure different perspectives and experience levels. Risks should be described in such a manner that their source and potential impact are clearly understood.
Analyze Risks: After identifying risks, perform a qualitative and quantitative risk analysis. Qualitative risk analysis involves determining the probability and impact of each risk, often rated on a scale from low to high. Conversely, quantitative risk analysis estimates the potential impact on project objectives – typically expressed in terms of cost and time.
Prioritize Risks: After analyzing, the risks are prioritized based on their probability and impact. The highest priority is given to risks that have both a high probability of occurring and a significant negative impact on the project.

Plan Responses: For each identified risk, a risk response plan is prepared. This defines the steps to be taken in case the risk materializes. Risk response plans typically include four strategies: mitigate (reduce the possibility or impact), avoid (alter the project plan to eliminate the risk), transfer (shift the risk impact to a third party), or accept (take no action and deal with the risk if it occurs).

Below is an example of what a basic risk register might look like.

Risk ID	Risk Description	Probability	Impact	Risk Score	Priority	Response Plan
1	Delayed delivery of raw materials	High	High	12	1	Mitigate: Negotiate with multiple suppliers
2	Technical difficulties with new software	Medium	High	9	2	Transfer: Include a clause in the contract to cover software issues
3	Lack of skilled staff	Low	High	6	3	Avoid: Invest in staff training or recruit skilled staff

Paper PMI-RMP Exam Perspective

In the PMI-RMP exam, developing a risk register is a critical component in the risk management planning process. Understanding the key steps in creating a risk register—risk identification, risk analysis, risk prioritization, and risk response planning will play a significant role in your successful completion of the exam.

Remember, the goal of the risk register is not just to pass the exam, its practical application in real-world projects is far more significant. By maintaining a risk register, project managers can prevent minor issues from turning into big problems, thereby ensuring project success. As you approach the PMI-RMP exam and exercise risk management in your professional capacity, always bear in mind that a properly developed and managed risk register is a valuable tool for managing uncertainty.

Answer the Questions in Comment Section

True/False: A risk register is a document that is created during the project initiation phase.

Answer: False

Explanation: A risk register is typically created during the planning phase of a project, not during the initiation phase. It records information about identified risks, planned responses, and risk monitoring.

Multiple Select: What are the main components of a risk register?

a) Identified Risks
b) Root Causes of Risks
c) Risk Triggers

d) Company’s Financial Statements

Answer: a) Identified Risks, b) Root Causes of Risks, c) Risk Triggers

Explanation: The main components of a risk register include Identified Risks, Root Causes of Risks, and Risk Triggers, but not the Company’s Financial Statements.

Single Select: When should the risk register be updated?

a) Only during the planning phase
b) Only when there are changes in project scope
c) Throughout the life of the project

d) Only at the end of the project

Answer: c) Throughout the life of the project

Explanation: The risk register is a living document and should be updated throughout the life of the project as new risks emerge, and existing risks change or are resolved.

True/False: The risk register does not need to include planned responses to risk.

Answer: False

Explanation: A risk register should include planned responses to each identified risk. This helps in better control and mitigation of the risk.

Multiple Select: Who is responsible for maintaining and updating the risk register?

a) Project Manager

b) Risk Management Team
c) Project Team
d) Company CEO

Answer: a) Project Manager, b) Risk Management Team, c) Project Team

Explanation: The responsibility for maintaining the risk register falls to the Project Manager, Risk Management Team and Project Team, not the CEO.

Single Select: What is another name for a risk register?

a) Risk Matrix

b) Risk Log
c) Risk Chart
d) Risk Planner

Answer: b) Risk Log

Explanation: A risk register can also be commonly referred to as a Risk Log.

True/False: Identified risks and their planned responses in a risk register are based entirely on past experiences.

Answer: False

Explanation: While past experiences can greatly aid in identifying risks and planning responses, brainstorming, expert opinion and other forecasting tools are also used in risk identification and management.

Single Select: What is the key benefit of developing a risk register?

a) It provides a reference tool for future projects.
b) It assists stakeholders with allocating resources.

c) It increases the likelihood of project success by proactively managing contingencies.
d) It helps in maintaining a project schedule.

Answer: c) It increases the likelihood of project success by proactively managing contingencies.

Explanation: The key benefit of a risk register is that it enhances the likelihood of success by proactively handling potential problems.

Multiple Select: What other documents can be used in compliment with a risk register?

a) Risk Management Plan
b) Scope Statement

c) Project Schedule
d) Stakeholder Register

Answer: a) Risk Management Plan, b) Scope Statement, c) Project Schedule, d) Stakeholder Register

Explanation: All these documents can provide valuable information that can inform risk management, and hence work well in compliment with a risk register.

True/False: The risk register is only necessary for large-scale projects.

Answer: False

Explanation: A risk register is valuable for all projects, regardless of size. Even small projects may face significant unforeseen risks which need to be managed.

Single Select: Who should have access to the risk register?

a) Only the Project Manager
b) Only the Project Team
c) Only the Stakeholders

d) All project members and relevant stakeholders

Answer: d) All project members and relevant stakeholders

Explanation: The risk register should be accessible to all members of the project and relevant stakeholders to ensure open communication and risk awareness.