IT GovernanceRisk Management

Creating Risk Profile Graphs

GraphsSince as early as World War II, comic books have been found to be effective teaching tools due to their engaging visual nature. Graphics have a way of bringing abstract ideas into focus and making them more digestible for education. Mike Griffiths evidently recognizes this as well, as in a blog post he talks about creating risk profile graphics in order to visualize and identify risk trends that threaten your projects. He finds that too often, risks are acknowledged before a project begins, but then no effort to adjust the schedule around addressing these risks is made. Risk profile graphs can help correct this.

Risk is generally measured according to risk probability and risk impact, which are the likelihood of a risk occurring and the damage done should risk actually occur respectively. Risk probability multiplied by risk impact equates to total risk severity. Assigning approximated common values to these measures like 1 for “Low” or 3 for “High” is an easy way to do the calculations, but using techniques such as expected values for more precise measurements can also be useful if the situation calls for it. Once these values have been assigned to the various risks you have identified, you should then track and reassess these values over time, ideally watching these values decline as the project approaches completion. However, if the values are instead growing, that is a concern of which the team and stakeholders must be made aware, and that is why you should visualize the data as a graph:

Risk Profile Graphs are “stacked area graphs” of risk severity. The risk severity scores for each risk are plotted one on top of another to give a cumulative severity profile of the project. When risks and their history of severities are displayed like this it is much easier to interpret the overall risk status of the project.

Visit the blog to see a sample graph and download an Excel spreadsheet to help create your own risk profile graphs. Understanding when risks escalate or fade away will greatly improve your ability to plan projects around them.

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