importance of long list of risks

Question

Can anybody explain the importance of having long list of risks in managing the project?

i know we should cover maximum of all possible one but what really significant importance to have a long list of risks?

Answer 1

As with everything else, documenting risks loses its value at a certain point when the benefits of doing so no longer exceed the costs and risks of not doing so. So if someone is teaching you to document everything without any consideration of costs and benefits, then you should find a new teacher.

Projects and all of its risks can be successfully delivered without one risk being captured. However, there are benefits of documenting them in some type of log and documenting the risks analytics and mitigation and contingency plans. Here are few:

1. Communications and escalation (this can include some CYA)
2. Lobbying for project resources to mitigate and recover
3. So sponsors and other stakeholders can validate the quality of the team's risk management
4. To monitor progress on a high exposure risk mitigation efforts
5. To prepare others on contingency plans

None of these is without its corresponding costs. So at some point in your risk log, if you have the mindset of ongoing evaluation of efficacy of what you're doing, you'll hit a zero and then negative return and that's when you stop.

Answer 2

The number of risks is not the most is not the most important factor regarding risk.

Recording the risks is useful, but unless there is an understanding of the likeliness of the risk coming to fruition & the impact of the risks if they do happen then there is no real 'value' to the risks.

In Prince2, for example, risks can be good (opportunity) or bad (threat) - so not every risk register item should automatically come with a downside.

If you can plot each risk on a simple chart according to probability/impact & also identify where you feel uncomfortable you can feed this back up the chain to say 'most of the risks are manageable, but should we go ahead considering risk a & risk b'. In that way the number of risks is less important.

Answer 3

A long list of risks is for risk awareness only. If you identified Abriss once, you might forget about it a week later. Nevertheless it still exists.

The (long) risk log assists you to not forget anything when you sweep over the log on a regular basis (e.g. 30min once a month) - in a fast way.

Because of that, you do a qualitative risk analysis tobfinish the initial risk documentation in less than a minute per risk: low/med/high propability & impact. Usually, the simple multiplication of impact and propability gives you awareness on the most important risks. Updating the list results in the adjustment of propability and impact while calculation and sorting could be automated.

For the most important risks, you might do a quantitative risk analysis by calculating cost, identify and track mitigations, etc.