One of the skills that project managers need to acquire is the competence to effectively track, monitor and control a certain project in order to ensure that it delivers on time, on budget and to the required scope – and any other quality measures that the project customer or sponsor has set.
Project managers who obtain this quality have a greater chance to complete the project successfully and without any major risks or issues.
The process of effectively tracking, monitoring and controlling a project is easier with a RAG reporting. Now comes the question below:
What Does RAG Status Mean?
In project management, RAG (RAG report, RAG status or Delivery Confidence Assessment) is an acronym that stands for Red Amber Green and relates to project status reporting which is utilized by project managers to indicate how well a certain project is performing.
In fact, the RAG reporting system is a popular project management method for rating status reports and it's based on the traffic light color designations. When using RAG reporting, project managers utilize the colors red, amber (yellow), and green to signify different scale ratings.
RAG is a shorthand for identifying the project status, but there has to be something substantive behind the shorthand. Many companies make up their own definitions and tolerances for what makes a project ‘Red’ so if you have these already, work within their boundaries. If you are setting up RAG for your project, or within your PMO, then think about what you want the statuses to mean for you.
What is Green Status?
The Green light of the RAG status is used to point out that the project is going well and is progressing as planned, and according to the designated time, budget, and scope.
What is Amber status?
The Amber color usually indicates that there may exist potential issues and that project would may need assistance in the future. In other words, the project is currently handled within the project team but the management team should be attentive.
What is Red status?
The Red light of the RAG status system suggests that problems are arising and the project team needs to resolve them in order to deliver the project successfully.
The definitions of all three so-called lights of the RAG status, however, can be modified according to the project managers’ needs. They can add more granularity to these rules, for example:
- Green: The project is within tolerance;
- Amber: The project budget or timescale is +/- 10% and the scope is within tolerance;
- Red: The project budget and timescale is +/- 10% or project budget or project timescale is +/- 15% or scope is carrying unplanned changes.
In fact, project managers can develop a categorization that they find suitable for their project. There can be very simple or more complicated matrices that specify targets, tolerances and breaches for different sizes and categories of project. The most important thing is that everyone agrees that Green means that everything is going according to the plan. When it comes to Red and Amber, project managers can define a categorization by themselves or use one of the many examples online.
In general, it doesn’t matters what definitions and categorizations you will use, as long as they determine them well and ensure that everyone on the team understands their meaning.
What Is RAG Used For?
The RAG status reporting is a very efficient method that is used for identifying the status of a project as it can help in more easily and quickly determining and addressing potential risks and issues.
RAG status can be applied to:
- The whole project
- A workstream or strand of the project
- A risk (or project risk exposure)
- An issue (or cumulative issues on the project)
- A change
The easiest way is to allocate a RAG status to the whole project, but on larger projects or in complex portfolios you might want to break it down and apply a RAG status to each element such as budget, scope, resourcing or timescale. These can then be aggregated up to give you a project-level status.
Working Out RAG
It’s actually quite easy to work out the RAG status of your project. Once your definitions are set, all you have to do is follow them.
Experienced project managers will also have a ‘gut feel’ for how things are going. Sometimes you just know that your project is going sideways and someone outside your immediate project team needs to know about it.
For timescales, check Schedule Reader to see how far adrift your original dates are from your actual dates. That will give you an idea of whether you are still in the tolerance stage for your project or not. Check your budget tracker spreadsheet for how much over budget you are forecast to be. You can also check, if you don’t already know, if there are unplanned changes or major risks or issues that would cause a problem and that your sponsor and management team ought to know about. All of this informs the status of your project.
Sometimes you might see the acronym BRAG. The 'B' stands for Blue.
The Blue color in RAG reporting represents a project (or task within a project) that is completed and handed over to another responsibility.
This can be handy when you are looking at a list of projects. It’s clearer to see what projects are in need of management attention if you can filter out the ones that are already completed.
The Risks With RAG
There is one major issue with RAG and it is that it has no clear call to action. In other words, marking a project with Red lights, doesn’t mean that your sponsor will leap immediately into action to resolve the problem. You’re going to have to spell out in more detail exactly what you expect from them, and then make sure they do it.
Of course, some project sponsors are totally engaged and will work all this out for themselves, but generally "raising awareness" isn’t enough: you need some action taking otherwise you can’t keep the project moving forward.
There’s another, smaller, concern and that’s the fact that RAG doesn’t translate particularly well to Agile environments.
You can use RAG if it suits you for project monitoring and control.
If it doesn’t, don’t use it as Agile methods have plenty of other ways to ensure project status is monitored accurately day by day, like standups and burn down charts.
Despite the limitations, RAG status reporting is a very useful status tool, quickly offering everyone a glimpse at where the project is at a particular moment.