What is RAG status and why is it important in project management?

One of the most important elements of effective project management is to keep adequate control over each and every action taken in relation to the risks identified at the outset that may arise in the course of a project. There are four tactics for dealing with such risks: avoidance, transfer (e.g. by taking out insurance), mitigation and acceptance. To implement the chosen strategy for a given task in the project, a methodology that uses the RAG status can be helpful. In today’s blog post, we will explain what the acronym means and how to use this technique in practice. Read on.

RAG status – table of contents:

1. What is RAG status?
2. Red, amber, green – what are the differences?
3. Using RAG status – what is important?
4. When to use RAG statuses?
5. Summary

What is RAG status?

RAG stands for three colors: red, amber or green, which are traditionally used in traffic as traffic lights. The mentioned hues have found their application in categorizing projects – they indicate at what stage a given project is and what support it needs at a particular moment. Therefore, the colors are important to the company’s management team (owners, shareholders, stakeholders, etc.), to whom the project manager reports on the progress of work. Green usually indicates projects that are going smoothly, while red indicates those that currently need more support.

Red, amber, green – what are the differences?

The specific conditions that must be met for a project to get a certain color are determined individually by every company. However, it can be pointed out that the color red is assigned to projects which are delayed or went over budget. Such a situation may result from insufficient resources, bad project requirements, or the manager’s inability to handle the difficulties that may arise. What about the remaining colors?

• The color green means that the project is being carried out at the right time, within its scope and budget, which means that project managers have everything under control, and there is no need to involve the management team.
• The color amber indicates that the situation is stable at the moment, and the project team is working as planned, but there may be a delay in completing a particular task without affecting the final deadline. Therefore, the management team should expect some problems in the future that will require intervention.

Using RAG status – what is important?

When using the colors described above, it is extremely important to ensure that team leaders are properly trained and understand the definitions of each color, the conditions that must be met to assign a particular color, and what steps need to be taken next. This is the only way to ensure that the project is given the right status. You would certainly want to avoid the situation where a project with a green status needs support at the last minute, as it may be too late to take action. It may also turn out that the problems reported as red were not as serious as initially thought, and you wasted the resources.

When to use RAG statuses?

Color coding is critical for the management team, to whom, depending on a company’s policies, weekly or monthly reports are submitted. However, managers can also assign RAG statuses to the most important elements of the project, such as the budget, the project deadline, risks, and crucial tasks. Having such control over individual parts of the project increases the chance of reacting appropriately and promptly, depending on the indicated status. To this end, you can use color coding in Excel or reach for the proper software.

Summary

Using RAG statuses in project management is a way to have better control over projects and speed up the reporting process. However, it’s essential for the company to clearly specify the conditions that must be met for a project to get a green, amber, or red status. The common saying “better safe than sorry” suggests that it’s a good practice to assign a worse status when in doubt. However, you can’t always be sure that managers will comply with this, so it’s necessary to take care of it individually.

Read also: How to tackle major issues in project management?

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