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113 cating response strategies. The arrow indicates where the risk When to use it? was previously ranked and how the mitigation strategy moved the risk to have lower likelihood or impact. A risk breakdown structure is appropriate for use on proj- ects with scope in all or most elements of the total project cost, or on complex projects. The risk breakdown structure is Resources used to facilitate risk identification, and assist in the other National Highway Institute (2006). Risk Management Instructor steps of the risk management process. Guide, NHI Course 134065, National Highway Institute, Wash- ington, D.C. How to use it? We use the risk breakdown structure to help categorize risks. R3.11 Risk Breakdown Structure The use of an RBS helps us handle risks systematically, rather A Risk Breakdown Structure (RBS) is conceptually similar to than individually. Similar risks, as classified by their RBS can a Work Breakdown Structure, used to illustrate interrelation- utilize similar management strategies. ships between manageable components of a larger project or program. Tips Ensure that the risk breakdown structure reflects the most What is it? useful categorizations for the project team. A common prin- A risk breakdown structure is an extension of a risk regis- ciple is that the categorization should focus on risk cause ter that is typically used to document, evaluate, and allocate rather than risk effect. It is helpful to try and standardize the risks. It is used to illustrate the interrelationships between risk breakdown structure across several projects, or through- risks pertaining to different aspects of a project. out the agency. This can aid in the use of other tools that rely on a historical database of risks. Why use it? Example For a comprehensive and consistent understanding of proj- ect risks across the project team and among project stakehold- Figures R3.11-1 and R3.11-2 show example risk breakdown ers when appropriate, "a picture is worth a thousand words." structures. Figure R3.11-1 is a DOE example of a hazardous Although specifications and contracts address most risks, a risk waste remediation risk breakdown structure. Figure 3.11-2 breakdown structure can be very effective in preparing project is a Caltrans example for a generic program risk breakdown team members to successfully mitigate or resolve risks as the structure. project moves forward. R3.12 Risk Register What does it do? A risk register is a tool that project teams can use to address A risk breakdown structure shows the relationships be- and document project risks throughout project development. tween project components that may be difficult to explain The risk register should be maintained as part of the project using only words. file that also includes information related to the cost estimate. Project Name Project Risk Technical Risk Internal Risk External Risk Schedule Mechanical Management Change Regulatory Cost Electrical Procedure Change Funding Quality Nuclear Reorganization Political Figure R3.11-1. DOE sample risk breakdown structure.

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114 Figure R3.11-2. Caltrans sample risk breakdown structure. What is it? the criteria used to make those assessments, and the overall risk rating of each identified risk by objective (e.g., cost, time, The risk register is a living document throughout project scope, and quality). It includes the risk triggers, the response development that describes all identified risks, causes, prob- strategies for high-priority risks, and the assigned risk owner ability of occurrence, impact(s) on project/agency objectives, who will monitor the risk. team responses, individual(s) assigned to monitor the evolu- tion and the resolution of each risk, and current status. It is a comprehensive listing of risks and the manner in which they When to use it? are being addressed as part of the holistic risk management A risk register should be prepared in conjunction with the process. It is generally organized in the form of a spreadsheet first published cost and schedule estimate of a project. There- so that it can be easily categorized and updated throughout after, a full review and update of the risk register should be the project development process. undertaken at the beginning of each subsequent phase of the project and during each phase as deemed necessary by the Why use it? project team or the project approving authority. A new project team is formed for every project and dis- banded when the project is complete. Although not desirable, How to use it? project team members sometimes change, and the project it- A risk register is best used as a living document through- self experiences changes over the course of the project. Com- out project development to record the evolution of project munication between project team members about the proj- risks. There is no prescription for how extensive a project ect objectives, costs, risks, etc., is key. The risk register serves team's risk register should be. Based on the example, the the purpose of communicating project risks and helping the project team needs to decide upon the most beneficial use team members understand the status of the risks as a project of the risk register, with the objective of minimizing the risk moves from inception to completion. impact. What does it do? Example The risk register documents the identified risks, the assess- Figure 3.12-1 shows an example risk register from the Cal- ment of their root causes, the areas of the project affected trans Project Risk Management Handbook. Caltrans project (e.g., work breakdown structure elements), the analysis of teams use this tool per the formal guidance at http://www. their likelihood of occurring, their impact should they occur, dot.ca.gov/hq/projmgmt/guidance_prmhb.htm.

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Project Name: Project Manager: DIST- EA 06-12345 Co - Rte - PM: Telephone: Date Risk ITEM Threat / ID # Status Opport-unity Category Risk Discription Root Causes Primary Objective Overall Risk Rating Identified (a) (b) (c) (d) (e) (f) (g) (h) i) Probablility 4=High (40-59%) 1 06-12345-01 Active Threat CON 03/26/07 Risk Description Root Cause(s) TIME High Impact 8 =High Probablility 2 Impact Probablility 3 Impact Probablility 4 Impact Figure 3.12-1. Sample risk register (Caltrans). (continued on next page)

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Risks sorted by Date Created: Response Actions w / Adjusted Cost/Time Cost/Time Impact Value Risk Owner Risk Trigger Strategy WBS Item Pros & Cons Impact Value (j) (k) (l) (m) (n) (o) (p) Risk Owner 165 PERFORM ENVIRONMENTAL (545) 454-5454 STUDIES AND Adjusted Cost/Time Cost/Time Impact Value Risk Trigger(s) AVOID Response Actions Impact Value PREPARE DRAFT (212) 121-2121 ENVIRONMENTAL DOCUMENT dditional WBS Risk Owner@dot.ca.gov Figure 3.12-1. (Continued).