Risk Assessment – Future Risk Assessment
- amani imtiyas
- Paul Angelo (Unlicensed)
This article contains: |
1. Future Risk Assessment |
The Future Assessment functionality enables the recording of a projected risk rating. If it is a part of your organisation’s risk management process, you may use this area to calculate a Future risk rating similar to the Initial and Current ratings.
STEP 1: Select the Future Risk Assessment tab.
STEP 2: Specify the following detail.
Note: The visibility of some fields can be controlled by the Risk Manager from Framework > Risk Settings > Field Configuration area.
Field | Description/Instructions | Mandatory/Optional | Strategic | Operational | Project | Corporate |
Future Assessment | ||||||
Consequence | Select a consequence rating by clicking the Select button. This will allow a pop up window to show for you to select the consequences based on the category description. This is called the consequence table to help you identify ‘consequence of the risk’. Users can simply click the relevant cell to select a consequence. This grid is defined and maintained by the Risk Manager from within Risk Settings. | Mandatory | 
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Likelihood | Select a Likelihood by clicking on the Select button. This will allow a pop up window to show allowing you to select a likelihood based on a description to help you identify it. Note: The Likelihood list is defined by the Risk Manager within Risk Settings. Users can simply click the relevant cell to select a Likelihood. This grid is defined and maintained by the Risk Manager from within Risk Settings. | Mandatory |
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STEP 3: Click on the Save button once you have completed all required fields on the page.
After saving, an image will appear which shows the Calculated ‘Future’ Risk Rating.
1.1 Monte Carlo Analysis
The financial impact that is tied in with the risk can be captured and the predicated impact can be calculated using the Monte Carlo analysis feature. The related configurations to enable this feature in any/all of the three assessment tab scan be found in the 'Risk Settings' article.
Based on the configurations set up by your administrator, the Monte Carlo analysis area will be displayed as below:
The information available for input and shown here are as follows:
Field | Description |
|---|---|
Best Case Scenario ($) | Used to capture the best case scenario of any financial impact linked with the risk |
Most Likely Scenario ($) | Used to capture the most likely scenario of any financial impact linked with the risk |
Worst Case Scenario ($) | Used to capture the worst case scenario of any financial impact linked with the risk |
Show Quantitative Range Assumptions | Used to show the quantitative range assumption values for the risk. This is a text field where the end user can input details on the assumptions made for entering the figures for best/most likely and worst case scenarios. |
Likelihood (%) | Used to capture the likelihood percentage for the above best/most likely and worst case scenario predictions |
Information Icon | An information icon is available against a field if the 'Description' for the field had been entered by your administrator via the 'Risk Settings' area. If yes, upon clicking on it, a pop up with instructional text as entered via settings will be shown for the user. |
Based on the data inputs for the risk from the above fields, the 'Estimated Monetary value' for the risks as P10, P50 and P90 will be calculated and displayed.
An 'S curve' based on these P 10, P 50 and P 90 projections will also be drawn with Probability in Y axis and the estimated monetary value ($) for each risk as well. The graph will display the P value at any level when you hover along the lines and points on the line graph indicting the projects with correspondence to the monetary value and the probability.
Below standard calculations are used when determining the Estimated Monetary value for the P10, P50 and P90 values for each risk.
P10:
(Best case + SQRT (Intended probability of achieving project objectives* (Worst case – Best case) *(Most Likely - Best Case))) * Likelihood
Note: Intended probability of achieving project objectives = 10
P50:
(Worst Case – SQRT (Intended probability of achieving project objectives*(Worst Case-Best Case) *(Worst Case – Most Likely)) * Likelihood
If difference of Worst Case and Most Likely is lesser than difference of Most Likely and Best Case
Best Case + SQRT (Intended probability of achieving project objectives* (Worst Case – Best Case) *(Most Likely - Best Case))) * Likelihood
P90:
(Worst Case – SQRT (Intended probability of achieving project objective*(Worst Case - Best Case) *(Worst Case – Most Likely)) * Likelihood
When any of these fields are enabled in the risk registers via Camms.Risk > Framework > Risk Settings > Register Configurations, the same will be displayed in the registers as a project summary where each P value per each risk under a project is aggregated and summed up and show in a summary.