Project Risk Management Software & Tools

Project Risk Management Software/Tools

A Resource Guide

This page provides basic information only, on Project Risk Management Software Tools, Solutions & Systems. For specific information on the Vue-Matrix Project Risk Management Software Tools, Solutions & Systems, please Click Here.

Why do you need a Risk Management process for your Project?

Being proactive and having a planned approach towards project risk management has many benefits.

Picture a typical Status Meeting or a meeting with Senior Management. The agenda often revolves around budget overruns, Schedule delays and Scope Creep. Although these are very valid conversations, they are reactive in nature, hence tend to occur after the fact. Each one of these above occurs because of issues. The need for the hour is proactive Risk Management. Risk Management addresses potential issues before they occur. Risks if not management proactively can turn into Issues.

Risk Management has its own life cycle and needs to be planned. According to the Project Management Institute (PMI)’S PMBOK (Project Management Book of Knowledge), Project Risk Management consists of the following Process Areas,

  • Plan Risk Management
  • Risk Identification
  • Qualitative Risk Analysis
  • Quantitative Risk Analysis
  • Perform Risk Response Planning
  • Risk Monitoring and Controlling

What is a Project Risk Management Software Solution/Tool? How does it help?

The success of a Project is based on 3 contributing factors. People, Process and Tools.

A project cannot succeed with any of these above factors working in a silo. They have to be working together coherently. You could have the best people and process in an organization or a project, but without the right tools, there is bound to be a loss of efficiency and productivity. Imagine going into a home improvement project with the best contractor in the country and the best possible blue-print drawn out but without the right tools! The overall project goals would never succeed.

The same applies in the field of Risk Management. Good Project Risk Management software tools, solutions & systems help businesses assess their risks visually and manage the Risk throughout the Risk and Project life cycles.

How does a good project risk management software tool, solution or system go about risk identification?

Risks could be negative (Threat) or positive (Opportunity) in nature. Risk has two key variables- Probability and Impact.

  1. Probability – A risk is an event that "may" occur. The probability of it occurring can range anywhere from 0 percent to 100 percent. It is recommended that for any Risk that has a Probability of above 80% should not be treated as a Risk but a FACT and management accordingly.
  2. Impact – A risk, by its very nature, may always have some impact. However, the size and effect of the impact could vary.

It is very convenient and meaningful to view these Risks in terms of their Probabilities and Impacts visually in a Matrix. This helps focus and decision making. And this is precisely what a good project risk management software tool, solution or system does.

This is very reflective of the old saying – A picture is worth a thousand words

Then we have to manage these Risks. A good Project Risk Management software tool, solution or system would help in

  • Prioritizing
  • Reporting
  • Risk Mitigation planning
  • Risk Contingency planning and
  • Assigning Risk Owners
  • Monitoring
  • Communicating Risks within all levels of the organization

How can project risk management software tools, solutions or systems be used in the Risk Life Cycle process areas?

Plan Risk Management- Plan Risk Management is the first step in the Project Risk Management process. It sets the tone for the rest of your Risk Management efforts. It involves deciding who should be involved, how to proceed, which and when Risk Management activities need to be done during the project life cycle, how frequently they need to be done and also which Project Risk Management software tools, solutions or systems to use. The primary objective is to create a plan for handling Risk Management for the project.

This is mainly a “Process” discussion with little to do from a software standpoint. However, if the plan itself includes usage of a Project Risk Management Software Tool like Vue-Matrix, a plan to how to use the software to complement the process.

Identify Risks – Risk Identification is the most critical step in the Project Risk Management process. Going back to the People-Process-Tools concept, Risk Identification by itself is mainly a people activity. It involves collaboration at all levels. However, project risk management software tools, solutions or systems if used appropriately will help. Input from project managers, team members and stakeholders must be taken and risks must be identified. These risks must then be recorded. This is where project risk management software tools, solutions or systems come into the picture. Microsoft Excel is an option but is static in nature and doesn’t help much beyond the Identification and recording. Collaboration opportunities between team members is also lacking in a spreadsheet. User friendly Project Risk Management software tools like Vue-Matrix can help you record the risks identified and manage them effectively moving forward. Vue-Matrix uses a simple form based interface to enter these Risks and is web-based hence extremely collaborative. Many Project Managers use the Vue-Matrix project risk management software tools during Risk Identification in the following manner

  • Conduct a Risk Identification exercise with the entire team and come up with a “long list” of identified Risks
  • Export the Microsoft Excel template and enter all the identified risks in the spreadsheet
  • Circulate this Spreadsheet (some call it Risk Register as well) to your team leads to ensure information is accurate
  • Import the entire spreadsheet into your project in Vue-Matrix Project Risk Management software with one click of a button

Analysis – Qualitative and Quantitative risk analysis

Qualitative Risk Analysis: There is no point in Planning Risk Responses for all Risks that have been identified because all Risks may not have the equal Probability or Impact. The overall objective of Perform Qualitative Risk Analysis of identified risks is to determine which risks warrant a response. Goal of this process is to “subjectively” evaluate the probability and impact of each risk and have a shorter list of prioritized risks that can move forward in your Risk Management process as planned. This includes evaluating each risk for its probability and impact using a numbered system (low, medium, high) or a scoring system. In a Vue-Matrix, Probability is any value between 1 percent and 100 percent. Risk Attributes can then be assigned to each risk. Some attributes in Vue-Matrix are Risk Area, Risk Response, Risk Type – Threat or Opportunity, Risk Impact. These values are all configuration in Vue-Matrix and hence this Project Risk Management software tool can be used in any industry. Once Qualified in Vue-Matrix, the Risks show up in Matrix form in the dashboard for focused viewing and decision making. It can be easily decided which risks will move forward in the process.

For example, in the scenario below (screenshot from Vue-Matrix), a particular Project team has decided that only the Risks that have been circled in the picture will move forward and constitute a “Short List”. All the other risks will constitute a “Watch List” and will be monitored for a change in Probability or Impact. The risks in the “Watch List” are deemed accepted.

Risk Categorization can further be done within the Vue-Matrix project risk management software tool and taken to any Status Meeting. These Categories are configurable to cater to any industry.

Quantitative risk analysis: Perform Quantitative Risk Analysis is not a very important/necessary process in Project Risk Management. Project teams very often skip this step as it sometimes adds little value. However it is a recommended process for large, complex projects with complex risks. This process looks at Project Risks quantitatively. Numbers such as Impact estimates are put on each risk that is now being planned for. In the Vue-Matrix project risk management software tools, solutions & systems, these cost impact estimates can be entered for each project risk. Based on a PERT estimate of these impacts and Probability, each Risk has an Expected Monetary Value (EMV). This is then rolled up on the dashboard to reflect numbers for the entire project and if applicable, the portfolio/program.

This is quantitative, while the exposure below is qualitative (color).

Plan Risk Responses: The main objective of the Plan Risk Response process is figure out what can be done to reduce the overall project risk by lessening Probability and Impact of Project Threats. Conversely, another objective is to increase the overall project opportunity by increasing the probability and Impact of Project Opportunities. The challenge here is to creatively come up with ways to make the chances of your project success go up. Planning of Risk Responses can be executed in smaller projects by conducting team meetings for corresponding stakeholders virtually or face to face. In Larger projects, the larger team can be broken down by the Risk Categories identified. These categories can be easily set up or configured in project risk management software tools, solutions or systems like Vue-Matrix and now smaller discussions can be held within those categories. A representative or lead could be designated for each category and a higher level meeting could bring those leads together for further discussions. The meetings constitute coming up with Risk Response Strategies for Threats and Opportunities.

Common Risk Response Strategies for Threats are:

  • Accept: Acceptance indicates not doing anything active with the risk and accepting it. This can be used for both Threats and Opportunities. Sometimes it is possible that the risk itself is not high enough to justify other Risk Response strategies.
  • Avoid: Here, the cause of Risk is eliminated thus eliminating the threat itself.
  • Transfer: When a Risk is transferred, it is assigned to another party thus transferring the liability.
  • Mitigate: Very often it is mistaken that Mitigation is the ONLY Risk Response strategy. This is not true. Mitigation is ONE of the possible Risk Response strategies. Here, the impact or probability of occurrence of the Risk is reduced by taking planned action.

Let us consider an example where Bob has to drive to work taking Freeway 1 every morning. One day, the road has repairs. Bob has a few options if he has to make it to work on time.

  1. Bob does nothing different and takes Freeway 1 as usual. Here he is accepting the risk and he may or may not reach work on time as desired depending on factors that are not entirely under his control. This is Risk Acceptance.
  2. Bob takes an alternate route, thus bypassing Freeway 1. Here is risk involved in taking Freeway 1 is totally avoided. The Alternate route could potentially have other different Risks (Secondary Risks) – This is Risk Avoidance.
  3. Bob could try to have another colleague show up to work for him (how we wish this could happen in reality). Here he is transferring the entire risk of showing up to work on time to someone else. This is Risk Transference. Insurance purchase is the most common Risk Transference technique used.
  4. Bob could try various things to reduce the impact and cause of the Risk as well. He could take the bus on the same route. He could hire a faster driver (at a cost of a potential speeding ticket of course - another Secondary Risk) or maybe even talk to his supervisor and inform him about the issue and potential of late attendance, thus possibly reducing the impact of the Risk. All these are forms of Risk Mitigation.

Likewise, common Risk Response Strategies for Opportunities are:

  • Accept: Acceptance indicates not doing anything active with the risk and accepting it. This can be used for both Threats and Opportunities. Sometimes it is possible that the risk itself is not high enough to justify other Risk Response strategies.
  • Enhance: Here, you try to increase the chances of the Risk to occur.
  • Share: Here you share the risk with someone else.
  • Exploit: This is like Mitigation with Threats. Only difference is that Probability and Impact of Opportunities can be made higher to enable the Risk to occur.

An example could be where the project duration could be shortened if software is purchased. Note this has a price, but if it works out could be a great opportunity that needs to be managed. This opportunity also needs to be planned for and the plans need proper execution.

Opportunities are NOT Mitigated. They are Aggravated.

What is the difference between Mitigation and Contingency plans?

  • Mitigation plans are laid out to try and ensure the Risk does not occur.
  • Contingency plans are laid out so planned action steps could be executed after the risk occurs so that damage could be controlled and limited.

Vue-Matrix Project Risk Management project risk management software tools, solutions & systems can differentiate between Threats and Opportunities dynamically. The values for the different Risk Responses could be configured easily and Mitigation (or Aggravation) and Contingency Steps could be seamlessly entered within a Risk record.

Monitoring and Tracking Risks: Monitoring and Tracking Risks mainly involves ensuring the plans laid out are executed. Some Risks need to be watch or monitored closely while others may need Risk Response Plans to be implemented. Reserve Management from a budgeting standpoint is also done in this process. Contingency Reserves (Known Unknowns) and Management Reserves (Unknown Reserves) are set up and used as the Risk Response Plans are executed. Project Risk Management and creation and management of Reserves using Risk Management is a vast topic which needs separate attention.

To support proactive risk management, Vue-Matrix software tools, send email alerts reminding you to complete your actions and review your risks regularly; minimizing the chance of costly risks occurring.

Risks can be assigned to users designated as “Risk Owners”. Controlling unassigned Risks can be monitored directly from the Project Manager or Portfolio Manager Dashboard similar to an exception report for resolution. They can be clicked on and modified directly from the dashboard without having to navigate through the application.

Communicating – In today’s world when teams are spread across the globe, making team collaboration easy and faster is very important. Project Risk Management software tools, solutions & systems like Vue-Matrix encourages team collaboration. Project Managers and Portfolio Managers can add and assign risks to team members. Team members can view their risk logs and the risks assigned to them. Users can set their time zone to receive timely emails and notifications as well.

Reporting: As befitting one of the best project risk management software tools, solutions & systems, Vue-Matrix has several in built powerful reports that can cater to a variety of audience such as the Project team to Senior Management in the Steering Committee to your Business Sponsors. Enterprise Reports are at your fingertips that Rank Enterprise wide Risks based on their Probability and Impact.

Reports can be generated to view Risks on the Critical Path of the Project, by Risk Owner, etc. Or take your detailed Report for top risks with you to your meetings.

All Vue-Matrix’s Reports can be exported to Microsoft Excel, Microsoft Word or Adobe PDF. Best of all, the formatting is maintained reducing the admin overhead substantially

Common Problems in implementing a Project Risk Management Software Tool, Solution or System and how can these be resolved.

Commonly used spreadsheets. Spreadsheets are the most commonly used tool for recording risks and for risks assessment. However, we all know that spreadsheets are not very scalable for evaluating large volumes of data. They are also not very well designed for collaborative work. If your team is spread across the globe, planning, forecasting, budgeting becomes difficult with spreadsheets which can be exchanged only via email.

A good project risk management software tool, solution or system with features like reporting, communication can help in tasks like consolidation of data and reporting can be easier.

Costly Project Risk Management software tools– Many project risk management software come at a very high cost. They also charge by the user. This makes including all team members in the project risk management process expensive. Project Risk Management also becomes unaffordable for small businesses and startups. Compare the project risk management software’s available and do an in-depth analysis to pick one that suits your projects needs and budget.

Complicated Project Risk Management Software tools – The project risk management software and process can sometimes be difficult to understand and requires training. Some dashboards on the software may look too confusing and may not include a quick set up guide or good training videos or tutorials to get started. Training is an integral part of the project risk management process and implementing project risk management software.

Team Motivation and Implementing Change – The project risk management process is beneficial for the project or the organization but also to the project manager and the teams.

Project and Portfolio Managers should understand the advantages of implementing a project risk management process and new software. This should be conveyed positively to their team members via good and effective training methodologies. Get team members excited about the implementation of the new project risk management software and its benefits. Team members can be motivated as they can focus on those important risks that they see on the top and being able to identify important risks and recommend responses can lead to a sense of ownership

Team members who actively participated in the risk identification and assessment steps can also be rewarded.

Vue-Matrix™ Project Risk Management project risk management software tools, solutions & systems help you take the right actions at the right time to deal with the risks that you identify. Vue-Matrix™ helps you make decisions about which actions to take, showing you the most effective ways to invest your resources and budget. The budget allocated to approve actions is automatically rolled up through the hierarchy, allowing budget holders to see at a glance how much risk management reserve is still in play.


 

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About Us - Vue-Matrix™ is a leading web-based project risk management software solution & tool for effectively managing project risks
Comprehensive Project Risk Management Software Solutions & Tools:
We offer comprehensive project portfolio risk management software solutions & tools such as Project Risk Probability-Impact Matrix, Risk Identification, Monitoring & Tracking software including dashboard, matrix & other tools for software/IT projects, Engineering, Mining, Aerospace & Aviation, Healthcare & Construction domains.
  Minimize Project Risk & Maximize Profitability with Vue-Matrix™ Project Risk Management Software Solutions & Tools:
Vue-Matrix™ helps companies understand their Risk impacts in a tangible form so mitigation or contingency action can be recorded and implemented, thus dramatically increasing the chances of project success and saving the company money.
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