When creating a project charter, initial risks logging is a necessary component of getting a healthy jump-start on your project. Through creating an initial risks and issues log for your project charter, you can be sure that you are getting the project started on the right footing.
Project charter initial risks logs are growing in popularity. One of the major reason for this is that the sooner potential project risks are identified, the more educated a decision management can make with regards to project initiation and project budgeting. While your project is only on the ground floor, by adding a risks log to your project charter, you can ensure that your project will receive the funding it will need in order to be successful.
The project charter initial risks log can help companies to make better decisions about what projects they would like to initiate. If funds are limited, then, projects carrying a high probability of risk, or a high risk price tag can be deferred until a later time. Additionally, projects that have high risks, but higher returns can be added to the investment section of the project portfolio.
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What Goes Into the Project Charter Initial Risks Log?
Most likely, your project charter initial risks log will have three parts. First, you will list at least the three most pressing risks. Then, you will make note of the fact that any issues that come up during your project's lifecycle will be logged (and if you like, you can even make mention of how you will plan to track issues in your project). Finally, you will want to make alternative plans, and account for what will happen should any of the project risks actualize.
While many might tell you that you should only put the smallest risks, or the most general risks, in your project charter, this isn't a good idea. First, if your project contains a large risk, and you only raised the flag about small risks, and this risk should happen, you may get into trouble for not pointing it out at the offset. More than finding trouble through omission of large risks, your budget may not cover the funds to fix things when plans go awry and your project will fail. Moreover, if you do not practice honesty in your project charter initial risks log, then you will lose the trust of your colleagues.
Even the smallest risks should have a contingency plan accompanying them so that your stakeholders can see that you have thought out solutions to the risks. For every risk listed in your project charter, you should have an accompanying solution or two. This is just good sense. Not only will it show those who make decisions about what projects to pursue that you've thought out solutions, but it also will demonstrate just how many resources your project will require. Good project planning involves making a plan B - and a plan C. You never know where things might go wrong, and you definitely want to have backup plans for this.
Your project charter is more likely to be approved if you are both honest about the risks involved in the project and the plans you have to counter the effects of these risks. While you do not have to list every potential risk in your project on the project charter, it is a good practice to list the most pressing ones as well as their solutions.