Risk Identification Matrix

The Business Matrix: Thursday 23 June 2011

Cotton prices hit H&M profits

H&M underlined the challenges on the high street yesterday after high cotton prices and a drop in consumer spending power hit its profits. The Swedish chain, which has 2,297 stores worldwide including more than 180 in the UK, reported a 23 per cent drop in half-year profits £900m.

Decision day for HMV investors

HMV hopes to finalise the sale of its Waterstone’s book chain today in a £53m deal that should help the group secure its immediate future. Shareholders will gather in London to vote on the proposed sale of the 296 stores to Russian billionaire Alexander Mamut. Proceeds from the move will be used to help the group pay off debt.

AstraZeneca sells dental unit

The Anglo-Swedish pharmaceutical giant AstraZeneca has agreed to sell its Astra Tech business to the Surrey-based firm Dentsply for approximately $1.8bn (£1.1bn). Astra Tech, headquartered in Molndal, Sweden, has two main business divisions, a dental division and a healthcare division.

Princes denied in Fray Bentos bid

Premier Foods is searching for an alternative buyer for its Fray Bentos brand after the Office of Fair Trading said selling it to Princes would create a “near monopoly” in the canned pies market. Premier agreed earlier this year to sell its canned foods unit,which also includes Crosse & Blackwell brand, to Princes in a £182m deal.

Airbus secures $16bn A320 order

Airbus left arch-rival Boeing in its wake with an ever-expanding sales tally at the Paris Air Show yesterday by cementing a $16bn (£10bn) deal to sell 150 of its A320neo aeroplanes and 30 of the original A320 models to the Indian budget carrier IndiGo. By early afternoon, Boeing’s orders at the show stood at 141 planes; Airbus had orders for 550.

Shazam in $32m expansion

The UK music identification service Shazam has raised $32m (£20m) in funding as part of an expansion drive. Shazam, which allows people to identify music using mobile phones, has 150 million users. It is already offering a service in the US that lets users pick up offers or links on their phones from TV programmes or ads showing a Shazam logo.

Amec wins nuclear deal

Amec has won a contract from Magnox to provide nuclear consultancy services at its sites across the UK. The two-year contract, the value of which has not been announced, will see Amec provide both specialist nuclear and safety case services across the Nuclear Decommissioning Authority’s estate. Magnox operates 10 sites.

Standardize Risk Identification Process

Standardize Risk Identification Process

Posted by admin on May 3, 2011 in OPM3 Best Practices | 8 comments

Standardize Risk Identification Process

The process for understanding risk can be difficult to understand.  Risk is any change to the project plan the is either positive or negative.  Risks may be accepted, ignored, mitigated or transferred.  Transferring a risk is buying insurance or outsourcing the process to a contractor letting the carry the burden of the risk.  Mitigation of risks is developing a plan for what to do if the risk occurs, by understanding its impact, and what we would need to do if the risk were realized.  Ignoring a risk may occur when the risk will have limited impact of time, scope. Or budget. Accepting a risk when there is a high probability of it occurring allows the project manager to assume the risk will occur and include it in the project plan. 

One question that can occur in this process is asking at what level of risk do I need to wake up the executive at 3:00AM. This is risk impact.  A P&I matrix is a tool that allows one to compare the relative impact and the relative probability of a risk occurring.  This matrix assigns scores from one to ten for each attribute.  Multiplying the scores will arrive at a probability and impact composite.  After determining which risks are the most demanding of the project one can decide what course of action would be prudent.  Each organization has it’s own risk threshold for time, scope, and budget variances.  It is best to involve the project sponsor or an executive in determining what level of identified lists would be acceptable.

It is important for each work package listed in the WBS that there be an associated risk entry.  It should include it’s risk score, along with one of the categories of action for responding to a risk listed above.  The standardization of the process allows for the repeatability of many tasks that are shared among projects. That will most likely have the same or similar risk categories and responses that have had in previous projects.  Gathering information from lessons learned and from subject matter experts will allow for the best risk identification, remembering that we need to confirm our organization’s thresholds.  Creating a standardized form with checklist is advisable so that each WBS entry is examined for risk, and it’s identification.  Looking at the assumptions we have about how a process will proceed can be a paradigm shift when someone else who will actually be doing the work examines the risk assessment.

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