Building an Effective Project Risk Management Scoring Matrix
Learn how to build and structure an effective Project Risk Management Scoring Matrix around your own organizations risk scoring criteria
When implementing Project Management solutions I am often in discussion with project teams and managers on how best to control and identify risks within the projects at various levels. Commonly we have reliable methods to control scheduling and communications but don’t manage the project in relation to key objectives and associated risks. Using a Risk Score Matrix can easily and quickly highlight discussion points for the Project Review Board.
Defining Measures of Risk
There are many ways within project risk management that we can measure risk. Most commonly, this can be a simple metric to highlight the risk and could be input by the Project Manager. In addition it can be considered as a combination of factors. For example, the illustration below shows how a risk can be evaluated based on its impact (consequence) and its probability (likelihood).
Setting up the Project Risk Score Matrix
The scoring can be based on multiple levels and doesn’t have to be measured to 5 levels – 3 may suffice for most organizations.
Project Risk Scores Explained
However you score risk, the same principle applies.
- What is the likelihood of the risk occurring?
- What is the consequence of the risk occurring?
Give each element a score and you can indicate the risk measure.
Project Risk Management Benefits
Throughout my experience, there are a number of benefits that are easily realized by businesses through project risk management coupled with an effective Risk Scoring Matrix. Most commonly these include:
- Greater probability of achieving organizational objectives
- Provide a transparent and uniform process for the management of risk
- The information is recorded and audited
- Quick and effective means of formally recording risks
- Demonstrates your organization’s ability to manage risk
You can find out more on how KeyedIn Projects can help you to create your own Project Risk Scoring Matrix here, or watch our video about improving risk management., or watch our video about improving risk management.