Project Management Central

Please login or join to subscribe to this thread

Topics: Risk Management
Do projects find value in capturing inherent risk rankings?
Network:1



My company currently requires all risk assessments to consider inherent risks (with no controls in place) in addition to residual (aka current risk). The reason for capturing inherent risk is to understand whether or not controls are effective and to be aware of the risk to the company if those controls erode over time.

We are currently looking at a risk management software solution for projects, and the tool advocates capturing only the current risk ranking. Any thoughts on what would drive the greatest value for project risk management? Does capturing inherent risk actually provide real value for project risk management?
Sort By:
Network:213



It can be valuable depending on how you use it. Our custom enterprise level risk management tool goes beyond that. When we add a risk to the tool, we assign it a risk level. That would be the inherent risk. A risk management plan can be more than one action at one time, so at each action in the plan a new risk level can be assigned, and you get a graph showing decreased risk over the course of the action plan.

The risk at sequential steps shows the relative effectiveness of each step, as well as the overall plan. You might see diminishing returns so depending on the risk appetite, a decision might be made to stop at step 3 because step 4 isn't cost effective.

I say the tool "can" do that, because depending on the risk, the added work may make nice charts but cost more than the benefit.
Network:17662



Knowing the risks regardless of their nature is important and can help.

Please login or join to reply

Content ID:
ADVERTISEMENTS

"The amount of money one needs is terrifying..."

- Ludwig Van Beethoven

ADVERTISEMENT

Sponsors