How do you evaluate and prioritize project risks?
Risk Analyzer helps project managers and teams to identify, analyze, and manage project risks.
- Magnitude of potential impacts
- Probability and advanced warning
- Prioritize for planning and tracking
Risk Analyzer helps project managers identify and manage project risks more proactively. This tool is an important part of every project manager’s toolbox.
Risk Analysis Tool Guide
Advisicon’s Risk Analysis Tool focuses attention on two questions:
- “What could go wrong with our project/program?” and
- “Which risks need to be managed most closely?” (Have highest priority)
The Risk Analysis tool assesses three risk attributes and suggests the relative priority of each risk. This tool can be used to analyze risks at both the project and program levels.
Each potential risk identified is rated by the following attributes:
- Probability – the likelihood of it becoming an actual issue
- Lack of Advanced Notice before each risk becomes an issue indicates of how much time will there be to respond if it looks like it is going to become an issue
- Magnitude of the damage caused if the risk should occur.
- Severity is a calculated weighting of the Probability, Magnitude, and Lack of Advanced Notice, which helps prioritize the risks.
Risk Prioritization and Mitigate
The Project Risk Analysis charts provide you with insights into which risks are higher priority for active management to reduce risks to the project or program.
- Risks plotted lower on the bubble chart are the highest priority and need more active monitoring and management to reduce the probability of risks turning into issues
- Risks plotted to the left need better early warning systems or closer monitoring to provide more warning of negative events and conditions
- Larger plots need plans to reduce the impact of a risk
Using the Tool
- Enter a risk into the list table at the upper left.
- Assign values (1 to 5) for each of the three risk attributes: Magnitude, Probability, and Lack of Advanced Notice. Note: Severity is a calculation of the three categories (and is not editable) which indicates the relative priority of each risk.
- The results will be plotted in the Severity Ranking chart to the right of the risk table as well as in the bubble chart below the Severity Ranking chart.
- Identify the top three risks by severity.
- Develop a risk management plan for each of the top three risks.
- Transfer risk to a vendor or another organization?
- Mitigate (prevent) the risk proactively?
- Minimize (reduce) the impact by reducing the elements of the project associated with that risk?
- Accept the risk and budget time and money accordingly?
- Develop contingency plans to direct your response if the risk does turn into an issue.
- In the case of a positive risk, how can you ensure or increase the likelihood of it occurring?
- Evaluate what it would take to mitigate (prevent) each of the rest of the risks, and decide on action items for each.
- Update your risk analysis at regular checkpoints throughout the project to ensure that you are monitoring and evaluating the risk impact of changing circumstances.