RAG Status in Project Management: Importance & Benefits

Key performance indicators (KPIs) provide projects with a lot of data. But to know whether those KPIs are on target requires more than just a gut feeling. You need a way to quickly and expertly evaluate whether project goals are being met. That’s what a RAG status does.

RAG status begins with understanding the acronym and how RAG status is used in project management. Then we’ll define RAG status tolerance and go into the various project professionals who use RAG status when evaluating a project. Finally, we’ll show what each of the RAG statuses means and how to respond to them to better understand a project.

What Is RAG Status in Project Management?

An RAG status is like a KPI traffic light. The RAG stands for red, amber and green. Just like a traffic light, red is an alert, amber (or yellow) signals caution and green means all’s clear. Sometimes another couple of colors are added to the RAG status. That’s blue and gray. Blue indicates that the activity has been completed and gray means there’s an information gap that prevents the status from being correctly assessed.

RAG status is a way to quickly and visually communicate the status of various aspects of a project or multiple projects. By color-coding the project data, the progress and performance of the project or portfolio are more intuitive and delivered with greater efficiency. It’s a great technique for project managers to get a quick overview of the project, but also serves stakeholders, who want to know the big picture and aren’t interested in the details.

Using a RAG status facilitates understanding quickly and, in so doing, helps managers and stakeholders to target areas that require attention according to the color that it’s assigned. The red, amber or green also makes it easy to see what is on track and where actions are needed to get the areas in red up to speed.

Project management software can incorporate the RAG status. ProjectManager is award-winning project and portfolio management software with multiple ways to get a quick overview of the project’s performance and progress. We’ll get to the RAG status later, but first let’s review the real-time project and portfolio dashboard, which makes it fast and easy to gauge project KPIs such as time, cost, workload and more. The easy-to-read color graphs and charts automatically update in real time to provide a status report whenever a manager wants one, without the long and complicated setup required by lightweight alternative tools. Get started with ProjectManager today for free.

ProjectManager's portfolio dashboard — ProjectManager’s real-time dashboards provide an instant status report. Learn more

What Is RAG Status Tolerance?

When using RAG status, it’s first important to know how to define each color so you can use it to track your projects. That is, what are the RAG status tolerance ranges? Usually, the RAG status tolerance follows this criteria.

Green: At or above the target for the project
Amber: With 10 percent of the target for the project
Red: Less than 10 percent of the target for the project

This is only a guideline. Sometimes, the RAG status tolerance range needs to be adjusted to better fit the project metrics and KPIs being measured. For example, the amber status could be only five percent of the project target if the results are highly predictable or it’s critical to act quickly if the project is off track.

However, the amber status could be up to 20 percent if there’s not a lot of volume for the activity or the project manager isn’t as familiar with the activity. Just like a project plan, the RAG status tolerance is a moving target and not set in stone. Keep that in mind when coming up with the RAG status tolerance.

Get your free

Status Report Template

Use this free Status Report Template for Excel to manage your projects better.

Who Uses RAG Statuses to Track Project KPIs?

We’ve been referring to project managers and stakeholders as the main users of RAG statuses, but there are many people involved in the project who will want to use this technique. Those people will have some responsibility for managing the project or making decisions about the project. They are as follows.

Project Managers
Program Managers
Project Portfolio Managers
Project Management Office (PMO)
Executives & Board of Directors
Department Managers
Business Decision Makers

Free Project Status Report Template

The RAG status is used when making a status or portfolio report. It’s a way to orient oneself to the details to come. Users can add it to this free status report template for Excel, which captures details about the project over a specific period. This reporting tool helps project managers and keeps stakeholders informed on the progress of the project.

The free status report template captures everything needed to get a well-rounded project overview. There’s a project summary with key accomplishments, completed and planned work, milestones, deliverables and action items. The section on the project health goes over budget, schedule, quality and scope. There’s even a risk management overview.

RAG Status Example

Let’s view a RAG status example to better understand the RAG status and how it would look on a project report. Below is a portfolio report generated from ProjectManager. At the top, is a small chart with a list of projects.

ProjectManager's portfolio report with RAG status

The list of projects is the first of four columns. The other three columns indicate the project time, workload and cost. For each of the projects listed in the portfolio, there’s a RAG status, both indicated in color and a percentage.

Being at the top of the report, stakeholders can glance at the RAG status and get a quick understanding of whether the projects are on track in terms of their budget and schedule. Project managers also have this quick view of all the projects’ statuses, but can scroll further down to get more detailed information.

What Does Red RAG Status Mean?

As noted, red in the RAG status is an alert that KPIs aren’t meeting the project target. It’s an alert that attention is required and must be responded to quickly or suffer going off track even worse. The issue could be that the project is over budget, is behind schedule, has scope issues or all three. In other words, the project is in trouble.

How to Respond to a Red RAG Status

Don’t panic. Red status is a good thing in that the project manager and stakeholders are now aware of a problem and can start to address and resolve it. The immediate response is to dig into the data to find out what the issue is and then find out how to fix it, if possible.

Start with priority issues and be honest with the client. Nothing is served by hiding the fact that there’s an issue that must be promptly addressed. Create a recovery plan, which might mean more funding, extending the schedule or adding resources. However, the project may be beyond repair, in which case there’s no point in throwing time and money into it. Close the project down.

What Does Amber RAG Status Mean?

Amber is a RAG status that says the project needs attention. It’s not as dire as a red but still requires the project manager and team to investigate why the project isn’t meeting its target. The project can still be delivered within the currently approved tolerances. There might be costs exceeding the budget in certain areas, but it won’t negatively impact the overall budget. Or maybe there are delays, but they won’t affect the project’s deadline.

How to Respond to an Amber RAG Status

Amber status doesn’t necessarily mean taking immediate action. It’s more of a wait-and-see approach. The project sponsor should be more involved, checking in regularly and offering help as needed. The project manager will want to keep a close eye on the project status and stay in close contact with the project team, even more than usual, to catch any issues faster. The team should work on open issues to get the project back on track.

What Does Green Mean in a RAG Status?

Green means that the project is moving forward according to the project plan. There are no concerns that the project manager needs to address. In other words, the project is under control. That means the project is meeting budget targets, is on track to deliver as scheduled and there aren’t issues that need to be resolved.

How to Respond to a Green RAG Status

All is well with the project. The project manager will have to prove this to stakeholders, of course, by showing them reports and other evidence that the initiatives are going as planned. But don’t report the project as green unless it is. Any issues mean there’s an amber status. Nothing is gained by ignoring this.

Benefits of Using RAG Status in Project Management

RAG status is an effective way to measure a project against its plan, schedule and budget, including for program and portfolio managers. One of the main benefits outside of what has been related above is that the RAG status is a way to summarize all project reports to get a picture of whether the project, program or portfolio is on track.

Senior management often uses RAG status to quickly identify those projects that are in trouble and need more support to get them out of the red and into the green. But this only works when the RAG status tolerance has been set and the project manager is honest in assigning the proper status.

How ProjectManager Helps Implement the RAG Status In Your Organization

RAG status is part of the reporting process in project management. It’s simply a way to easily and quickly understand where a project should be at any point in the project’s life cycle. Therefore, it’s facilitated by project management software as one of its features is reporting on project metrics. ProjectManager is award-winning project and portfolio management software with powerful reporting capabilities that are easy to use and measure all aspects of the project.

Make Project Status Reports With RAG Status

Two of the most important project reports are the status report for managing one project or the portfolio report when managing multiple projects. Our reports can be created with a keystroke and the results filtered to show only what the project manager or stakeholders want to see. These reports, including variance, timesheets, workload and more, can also be easily shared with stakeholders to keep them informed. RAG status is embedded in the status and portfolio reports, including a blue status, which summarizes the report and helps to quickly capture whether the project is on track or in need of support.

Manage Resource Utilization and Track Costs

One area that can show up in the RAG status is the project resources. Being able to manage those resources is going to help keep the project on track. Whether managing one or multiple projects, project managers can turn to real-time dashboards or the color-coded workload chart to make sure their resources are optimally utilized. The team page provides an overview of all projects and team members, including their tasks and the percentage complete they are. The workload chart makes it easy to see who is overallocated so the team’s workload can be balanced to keep them productive and working at capacity.