Project Risk Assessment: Guide With Templates & Examples

How to do effective project risk assessment?
To do a project risk assessment you have to perform its four key elements: identifying risks, analyzing risks, determining risk response and documenting risks. Then there are factors to consider, such as making risk assessment as part of your project management, getting all stakeholders involved and clarifying task ownership. Dozens of free templates and tools are available to get your project risk assessment off the ground.

You are organizing a product rollout, the premier milestone of your company this year. You have invited a thousand guests, expecting to witness a big gala event. Everything seems to be perfect before the event begins until you get two phone calls.

Your keynote speaker didn’t make it to her flight, and your caterer won’t be arriving due to some kitchen situation.

What do you do?

Just like life, your projects often throw some unexpected crises at you. These are what we call risks. And you should never allow yourself to ask what to do when risks happen because, by then, it’s too late and the damage will be significant. What you can and should do is to conduct a project risk assessment to anticipate such scenarios. 

Don’t worry, even if you lack formal training in project management, risk assessment is quite straightforward. In this article, we’ll show you how with a few project risk assessment templates to help you follow the process.

project risk assessment

As the Project Management Institute (PMI) defines it, risk is an unexpected event that can have an effect on your project, including its stakeholders, processes, and resources. Risk can affect your project positively or negatively. Take note that risk assessment is just one aspect of your life as the project leader. But it is a critical part of your strategy whatever project management methodology you’re using.

As a manager, you have your fair share of exposure to risks at varying levels. 

Sometimes, risks are mistaken as issues, but there is a significant difference. Issues are events or problems that are already currently happening. Examples of issues include lack of manpower to work on a project, insufficient funding, and an immensely tight timeline.

Meanwhile, risks are problems that may happen in the future. The last-minute no-show of the performers and the caterer in the scenario above is an example of risk. We can also consider the immediate mass resignation of significant staff members a risk. Here are more examples of risks vs. issues in project management.

The purpose of preparing for project risk assessment is to acquire an awareness of the kinds of risks your project may encounter and the degree of damage they may bring. The following tips below will walk you through the important parts of this endeavor, including properly framing the project risk assessment definition.

To help you make a more accurate risk assessment and streamline its tedious process, you can turn to project management software with risk management; for example, what you’ll find in features.

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Project Risk Assesment Guide

1. Identify risks

Identifying of risk should be done as early as possible in the project and carried out throughout the project timeline, as risks affect significant project milestones. Throughout the years, you or your predecessors might have created a catalog of risks in the company server that the business have encountered in completed projects.

However, risks can also be identified during brainstorming with seasoned project members and other stakeholders. You can use the Crawford Slip method, where during a meeting, an attendee writes one suggestion per each piece of paper. This is a very simple yet effective way of gathering and collating suggestions and ideas. Just a note, you’ll need the cooperation of teams from other departments to get the best ideas. If you’re getting less-than-ideal attention from them, a shrug of the shoulder here and there, that’s one of the signs you need project management software or upgrade to a better one to optimize collaboration across the board.

In identifying risks, a risk category document is very useful in determining areas that are prone to risks. Risks may fall under the following categories:

  • Technical
  • External
  • Organizational
  • Project management.

Your project risk assessment checklist should include the relevant stakeholder accountable to action for each.

Here’s a sample risk category checklist:


2. Analyze risks

This step entails examining the probability of a risk, how a risk event may impact project objectives and outcomes, and the appropriate steps that can be taken to mitigate the negative effects of risk. Here are the two things to consider at this stage:

  • Likelihood. How probable will a certain risk occur in your project? PMI identifies the likelihood of risk occurrence as high, medium-high, medium-low, and low.  Knowing the likelihood a certain risk will occur will help your team to prepare for it. For example, it is more probable for the bank to reject your loan application for funding than for that same bank to be set on fire by a lightning.
  • Impact. An effective project planning will have a project risk assessment matrix of the various levels of impacts of a risk (categorized as catastrophic, critical, and marginal) on cost, schedule, scope, and quality of outcome. This will allow your team to identify which area of the project will bear the brunt of the risk with the biggest impact. This, in turn, will enable you to allocate manpower, budget, or technology for prevention or solution. An example of a catastrophic risk is the last-minute cancellation of a venue, which will greatly affect the whole event.

A project risk assessment matrix helps you analyze each risk based on the two factors above. You can vary the model, but essentially here’s how this template looks like (pay most attention to the red boxes):

Credits: The Program Manager

3. Determine risk response

Project risk assessment planning tools offered by some project management sites, such as, target to achieve the following results:  eliminate the risk, reduce the probability of the occurrence of risk, and weaken the impact of the risk on the project. However, while it is best to develop a workflow to avoid the risk, it is still a rational move to set up a risk response guide for every project. This may mean factoring the risk in the project plan and schedule, increasing the funding or budget, and adding manpower and resources to the project, among other things.

It is simply not possible to completely eliminate all of the risk in a project. Some risks will persist at lower levels with weaker effects. These are called residual risks. Despite the diminished impact, residual risks need to be identified and assessed as you do the big-impact risks.

Here’s a project risk assessment example with an action plan, illustrating clearly what to do per risk occurrence:


4. Document risks

It is not enough, that you as project manager are able to identify, plan for, and solve risks events. A project folder or file needs to be created at the end of each project to provide transparency and awareness of the project’s timeline, workflow, and risks. This document sums up the reports above, plus adds insights on and citation of best practices on how the risks were handled. It will help other managers get a glimpse of the ins and outs of a project similar to yours. Having a cloud-based project management software like helps you to collate these details in one place for future reference.

Factors to consider when creating a project risk assessment

Being a project manager is not all about fighting and putting out fires. Here are more tips to get your project moving despite the hiccups.

  1. Make risk assessment the mainstay of your projects. It is ignorance to assume that projects will never encounter risks.  An effective project risk assessment and management is essential in the success of any project. Although this will incur an additional step on your part, the benefit you will reap from embedding risk assessment and management can never be underestimated.
  2. Inform stakeholders about risks. In the “Attack by Stratagem” chapter of the Art of War, one of the best books for project managers, Sun Tzu declared that the source of an army’s strength is in unity, not size.  Risk managers can learn a nugget of wisdom here. Sometimes, upper management is unaware of the details of failed projects. And there are instances where the instrument to solve the problem is already available but wasn’t used because the team has not been informed of its availability nor existence.
    Remember to include communicating risks and mitigation plans to other stakeholders in your project. You can do this during project update meetings as a default part of the agenda. This way, you clearly communicate that risks are vital parts of the project and should be given sufficient attention.
  3. Clarify ownership. Most projects involve different departments and stakeholders. It is important that stakeholders are clear with their ownership of the project or phase of the project. And this should be done at the beginning of the project or before a risk occurs. This way, each stakeholder will carry out tasks to decrease occurrences of risks on their part and will not be surprised by any additional expenses incurred.

Get the right tool for project risk assessment

While some managers have a wealth of experiences under their belt that help them to instinctively carry out steps and processes in analyzing and managing risks in their projects, it does not hurt for new managers to do some research as well as to adopt and utilize project risk assessment tools, checklists, and templates from websites. An example is is an online project management software that empowers managers to drive projects and teams effectively. It offers project risk assessment tools and templates that will save you time on the paperwork and give you more time to keep your team focused on achieving project success.

Stephanie Seymour

By Stephanie Seymour

Stephanie Seymour is a senior business analyst and one of the crucial members of the FinancesOnline research team. She is a leading expert in the field of business intelligence and data science. She specializes in visual data discovery, cloud-based BI solutions, and big data analytics. She’s fascinated by how companies dealing with big data are increasingly embracing cloud business intelligence. In her software reviews, she always focuses on the aspects that let users share analytics and enhance findings with context.

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