A Practical Guide

How to Manage Project Risks

Every project has risks.

A deadline can move. A supplier can be delayed. Requirements can change. A key team member can become unavailable. Costs can increase.

The problem is not that risks exist. The problem is when teams do not identify, assess and manage them early enough.

Project risk management gives teams a structured way to identify what could go wrong, understand the potential impact and decide what action should be taken.

In this guide, we'll explain how to manage project risks, how to assess them, what a risk register should include and how project management software can help keep risks visible throughout the project.

What Is Project Risk Management?

Project risk management is the process of identifying, assessing and managing events or conditions that could affect a project's objectives.

A risk is something that could happen and affect the project.

An issue is different. An issue is something that has already happened and is affecting the project.

For example:

• Risk: A supplier may miss the delivery deadline.
• Issue: The supplier has missed the delivery deadline.

Understanding this difference is important because risks can often be managed before they become issues.

Why Is Project Risk Management Important?

Unmanaged risks can affect almost every part of a project.

They can contribute to:

• Missed deadlines
• Budget overruns
• Scope changes
• Resource problems
• Quality issues
• Project delays
• Customer dissatisfaction
• Missed objectives

Effective risk management gives teams an opportunity to act before a potential problem becomes a real one.

It also gives stakeholders greater visibility of uncertainty within the project.

This is particularly important when projects are complex or involve multiple teams, suppliers, systems or dependencies.

What Are Common Project Risks?

Project risks can vary significantly depending on the type of project and organisation.

However, common categories include:

Schedule Risks

These are risks that could cause the project to miss its deadlines.

Examples include:

• Tasks taking longer than expected
• Dependencies being delayed
• Approvals taking too long
• Unrealistic timelines
• Resource availability changing

Budget Risks

Budget risks can cause a project to cost more than expected.

Examples include:

• Unexpected costs
• Supplier price increases
• Additional resources being required
• Scope changes
• Incorrect initial estimates

If budget control is a concern, read our guide on how to keep a project on budget.

Resource Risks

Projects rely on people, skills and other resources.

Potential risks include:

• Key team members leaving
• Staff absence
• Lack of specialist skills
• Competing priorities
• Insufficient capacity

Scope Risks

Scope risks occur when the work required by a project changes or becomes unclear.

This can lead to scope creep, where additional requirements gradually increase the amount of work involved.

Clear project planning and regular scope reviews can help teams identify these changes early.

Our guide to project planning explains how defining objectives, tasks, resources and deliverables can create a stronger foundation for project delivery.

Technical Risks

Technical projects can face risks relating to systems, technology, integrations, security, performance or implementation.

These risks can be difficult to predict, particularly when teams are working with new technology or complex systems.

External Risks

Some risks sit outside the direct control of the project team.

These could include:

• Supplier problems
• Regulatory changes
• Market changes
• Economic conditions
• Customer behaviour
• Third-party system changes

Although teams cannot always prevent external risks, they can consider how they would respond if those risks occurred.

How to Manage Project Risks

Risk management should not be something you do once at the beginning of a project.

Risks can change throughout the project lifecycle, so they should be reviewed regularly.

A practical project risk management process can be broken into several steps.

1. Identify the Risks

Start by asking what could prevent the project from achieving its objectives.

Think about:

• People
• Budget
• Timeline
• Scope
• Technology
• Suppliers
• Dependencies
• Stakeholders
• Quality

Do not only focus on obvious risks.

Ask the project team what they are concerned about. People working directly on the project may identify risks that are not immediately visible to senior stakeholders.

2. Assess the Risk

Once risks have been identified, assess how serious they could be.

Two simple factors are particularly useful:

• Probability: How likely is the risk to happen?
• Impact: What would happen if it did?

A risk that is unlikely but would have a major impact may still require significant attention.

Likewise, a risk that is highly likely but has a relatively small impact may need monitoring rather than immediate action.

3. Prioritise the Risks

Not every risk needs the same level of attention.

Prioritise risks based on their likelihood, potential impact and the amount of control the team has over them.

This helps project managers focus resources on the risks that matter most.

4. Decide How to Respond

Once a risk has been assessed, decide what action should be taken.

Common risk responses include:

Avoid

Change the project approach so the risk no longer applies.

Reduce

Take action to reduce the likelihood or impact of the risk.

Transfer

Move responsibility for managing the risk to another party where appropriate, such as through a contract or insurance arrangement.

Accept

Recognise the risk and decide that no preventative action is currently required, while continuing to monitor it where appropriate.

5. Assign an Owner

Every significant risk should have someone responsible for monitoring and managing it.

Without an owner, risks can easily become everyone's responsibility and therefore nobody's responsibility.

A risk owner should understand:

• What the risk is
• Why it matters
• What action is required
• When it should be reviewed
• What would trigger further action

6. Create a Contingency Plan

For important risks, think about what you will do if the risk actually happens.

For example:

Risk: A key supplier may miss a delivery deadline.

Mitigation: Confirm delivery dates earlier and monitor progress.

Contingency: Identify an alternative supplier if the deadline becomes at risk.

This gives the team a response ready to go rather than forcing them to start planning after the problem occurs.

7. Monitor the Risks

Risk management does not end when the risk register is created.

Review risks throughout the project and update them when circumstances change.

A risk that was low priority at the beginning of a project could become critical later.

What Is a Project Risk Register?

A project risk register is a central record of the risks identified within a project.

A simple risk register could include:

Risk	Probability	Impact	Owner	Response	Status
Supplier delay	Medium	High	Project Manager	Confirm delivery and identify alternative supplier	Monitoring
Resource shortage	Low	High	Team Lead	Review resource allocation	Open
Requirements change	Medium	Medium	Product Owner	Review scope and impact	Open

The exact structure can vary, but the important thing is that the information is easy to access and kept up to date.

Project Risk Management and Project Planning

Risk management should be built into the project from the beginning.

When creating a project plan, consider the risks that could affect the project's objectives, timeline, budget and deliverables.

This allows you to build appropriate actions into the plan rather than treating risk management as a separate activity.

Good planning should answer two questions:

• What are we planning to do?
• What could stop us from doing it?

Considering both creates a more realistic project plan.

How Project Reporting Supports Risk Management

Project risks should also appear in regular project reporting.

Reporting gives teams an opportunity to communicate which risks have changed, which actions are being taken and whether any new risks have appeared.

Our guide to project reporting explains how risks, issues, milestones, budgets and progress can be brought together into useful project reporting.

Keeping risks visible means stakeholders are less likely to be surprised by problems later in the project.

What Is the Difference Between a Risk and an Issue?

This distinction is simple but important.

A risk is a potential problem.

An issue is an existing problem.

For example:

• Risk: A key developer may become unavailable.
• Issue: The key developer is unavailable.

Once a risk becomes an issue, the response changes.

You are no longer preparing for something that might happen. You are managing something that is already affecting the project.

This is one reason early risk identification matters.

How to Manage Project Risks More Effectively

Good risk management is not about predicting every possible problem.

It is about creating enough visibility to make better decisions.

Some practical ways to improve your approach include:

• Discuss risks during project planning
• Review risks regularly
• Assign clear owners
• Prioritise risks based on likelihood and impact
• Connect risks to specific actions
• Create contingency plans for significant risks
• Include important risks in project reporting
• Keep risk information current
• Make risks visible to the people who need to act

Risk management works best when it becomes part of normal project management rather than a document that is created once and forgotten.

Common Project Risk Management Mistakes

Only Identifying Risks at the Start

Projects change.

New suppliers, requirements, people and dependencies can introduce new risks.

Risk management should continue throughout the project.

Listing Too Many Risks

A huge list of minor risks can make it difficult to see which risks actually matter.

Prioritisation is important.

Not Assigning Owners

A risk without an owner can easily be overlooked.

Make responsibility clear.

Failing to Take Action

Identifying a risk is only the first step.

If a risk requires action, record what needs to happen, who owns it and when it should be reviewed.

Keeping Risk Information Separate

If your risk register sits in a document that nobody checks, it is unlikely to support day-to-day decision-making.

Risk information should be visible alongside the rest of the project.

How Project Management Software Can Help With Risk Management

Managing risks manually across spreadsheets, documents and emails can become difficult as projects grow.

Project management software can help teams keep risks connected to the wider project.

Useful capabilities may include:

• Risk registers
• Task management
• Project dashboards
• Milestone tracking
• Dependencies
• Progress reporting
• Notifications
• Action tracking
• Project documentation
• Performance reporting

The value comes from keeping information connected.

A project manager should not have to check five different systems to understand whether a major risk is affecting a project.

If you're comparing platforms, our guide to project management tools covers the features teams should consider when choosing project management software.

How CombinedWork Supports Project Risk Management

Risk management works best when risks are connected to the work they could affect.

That is where CombinedWork's Project Management Operating System approach becomes important.

CombinedWork is designed to connect strategy, projects and execution, giving teams a central environment for managing the work behind their business objectives.

Instead of treating risk management as a separate spreadsheet or document, teams can keep project information connected so they can see what is happening and where attention is needed.

Make Risks Visible

A risk is only useful to the team if the right people can see it.

CombinedWork helps bring project information into one place, making it easier for teams to understand what is happening across their projects.

Connect Risks to Action

Identifying a risk is not enough.

Someone needs to take action.

By connecting project work, ownership and progress, CombinedWork helps teams move from simply recording risks to managing the work required to respond to them.

Connect Risk to the Bigger Picture

Not every project risk has the same business impact.

A small delay on one task may have little effect. A delay on a critical project milestone could affect a much larger business objective.

CombinedWork's approach is built around connecting day-to-day execution with the wider goals behind the work.

See the risk. Understand the impact. Assign the action. Keep the project moving.

Explore CombinedWork and see how a Project Management Operating System can help your team connect project management, execution and business objectives.

Project Risk Management Checklist

Use this checklist when reviewing risks on your next project:

• Have we identified the main risks?
• Have we considered people, budget, scope, schedule and technology?
• Have we assessed likelihood and impact?
• Have we prioritised the most important risks?
• Does each significant risk have an owner?
• Have we defined a response?
• Do we need a contingency plan?
• Are actions being tracked?
• Are risks reviewed regularly?
• Are important risks included in project reporting?
• Can the team easily see the current risk position?

Final Thoughts

Every project carries some level of risk.

The goal of project risk management is not to eliminate uncertainty completely. That is rarely possible.

The goal is to identify what could affect the project, understand the potential impact and take action early enough to give the team options.

Effective risk management combines planning, assessment, ownership, action and regular monitoring.

And when risk information is connected to project tasks, progress, reporting and business objectives, teams can make better-informed decisions throughout the project lifecycle.

Discover CombinedWork and bring project planning, risk management, reporting and execution together in one Project Management Operating System.