Risk Assessment Matrix - Manager's Resource Handbook

1 Risk Assessment Matrix All rights reserved. The Managers Resource Handbook by MHX Global LLP v1 An Example for Project Managers All rights reserved. The Managers Resource Handbook by MHX Global LLP v1 What is A Risk Assessment Matrix ? A Risk Assessment Matrix is a tool. Helps organize concerns and risks you foresee with a given project Includes potential impacts to the project Identifies the person(s) responsible for managing each risk item Computes the cost associated with each risk States the likelihood a risk will occur Sums the total potential risk for a project as a function of cost A Risk Assessment Matrix helps Project Teams plan for problems, manage risk, prioritize action, and communicate to others.

2 The potential cost of risk value you calculate can be factored into your financial model to build a stronger business case. All rights reserved. The Managers Resource Handbook by MHX Global LLP v1 Key Steps in Building a Risk Assessment Matrix the Risk the Impacts of Each Risk Ways to Mitigate Each Item the Total Cost of Each Risk the Probability of Each Item the Total Potential Risk Value of a Project For Step-By-Step Instructions and to Download The Template: All rights reserved. The Managers Resource Handbook by MHX Global LLP v1 Watkins Smith CorporationRF-30 UpgradeJessica AbramsMay 1, 2016 October 1, 2018 CCostAugust 12, 2018 SScheduleDecember 3, 2017 RResourcesOn TrackOOtherNumberRisk DescriptionImpact of Risk CSROM itigation StrategyRisk OwnerTotal Risk Value Probability of OccurrencePredicted Risk Value1 Customer delays release of end product into market-Delay in investment recovery-Reduced Sales next yearXX-Add customer-driven delays to penalties clause of contract-Add milestone payments for Initial Concept and Design Acceptance to shorten time between paymentsT.

3 Franklin$45,00060%$27,0002 Customer seeks to renegotiate price based on final design-Reduction in total projected revenue-Business case may not be as strong-Sales contribution from project may need to be reduced-Cost reduction may be neededXX-Track detailed cost changes throughout design evolution to show cost adjustments-Seek funding for changes to help absorb non-recurring costs impactsG. DuBois$33,05050%$16,5253 Specialize software is needed based on current project requirements-Purchase of additional software necessary-Employees will need training-Efficiency loss due to learning curveXXX-Negotiate with customer to use 'industry standard' software-Charge customer for added cost of special software under scope change Nelson$77,00025%$19,2504 Produce Validation Testing must be performed by 3rd party-Need to identify potential suppliers-Added cost of paying 3rd party-Schedule impact due to logisticsXXX-Setup test program to use only internal equipment-Work with customer to see what tests they can perform on our behalfC.

4 Jenkins$113,00020%$22,6005 Product Parts List exceeds estimated value by more than 10%-Recurring Cost in excess of business case-Reduced profit margin if price remains unchanged-Potential loss on effortX-Negotiate component costs with suppliers-Renegotiate contract price with customer based on customer-driven Hart$8,40030%$2,5206 Customer IT system/formats cannot receive project deliverables-Will need to convert formats internally -May require specialize conversion software-Schedule impact if formatting issues cannot be resolvedXX-Test software export abilities within first 90 days-Have customer provide list of formats to evaluate import capabilitiesR. Nelson$18,50070%$12,950$294,950$100,845 Risk ValuesProject Financial Summary:42%41%$100,845$119,64375%68%$ $ DateRisk Category DefinitionProjectProject ManagerCurrent ROS:Estimated % Complete:Initial Risk Value:Current Risk Value:Total Potential Risk (Unweighted)Total Estimated Impact (Weighted)Estimated Completion Date% Budget SpendPlanned Completion DateCategoryProject Status CustomerInitial ROS:Estimated Investment:Current Investment:Project Start DateProject Information All rights reserved.

5 The Managers Resource Handbook by MHX Global LLP v1 Watkins Smith CorporationRF-30 UpgradeJessica AbramsMay 1, 2016 October 1, 2018 CCostAugust 12, 2018 SScheduleDecember 3, 2017 RResourcesOn TrackOOtherNumberRisk DescriptionImpact of Risk CSROM itigation StrategyRisk OwnerTotal Risk Value Probability of OccurrencePredicted Risk Value1 Customer delays release of end product into market-Delay in investment recovery-Reduced Sales next yearXX-Add customer-driven delays to penalties clause of contract-Add milestone payments for Initial Concept and Design Acceptance to shorten time between paymentsT. Franklin$45,00060%$27,0002 Customer seeks to renegotiate price based on final design-Reduction in total projected revenue-Business case may not be as strong-Sales contribution from project may need to be reduced-Cost reduction may be neededXX-Track detailed cost changes throughout design evolution to show cost adjustments-Seek funding for changes to help absorb non-recurring costs impactsG.

6 DuBois$33,05050%$16,5253 Specialize software is needed based on current project requirements-Purchase of additional software necessary-Employees will need training-Efficiency loss due to learning curveXXX-Negotiate with customer to use 'industry standard' software-Charge customer for added cost of special software under scope change Nelson$77,00025%$19,2504 Produce Validation Testing must be performed by 3rd party-Need to identify potential suppliers-Added cost of paying 3rd party-Schedule impact due to logisticsXXX-Setup test program to use only internal equipment-Work with customer to see what tests they can perform on our behalfC. Jenkins$113,00020%$22,6005 Product Parts List exceeds estimated value by more than 10%-Recurring Cost in excess of business case-Reduced profit margin if price remains unchanged-Potential loss on effortX-Negotiate component costs with suppliers-Renegotiate contract price with customer based on customer-driven Hart$8,40030%$2,5206 Customer IT system/formats cannot receive project deliverables-Will need to convert formats internally -May require specialize conversion software-Schedule impact if formatting issues cannot be resolvedXX-Test software export abilities within first 90 days-Have customer provide list of formats to evaluate import capabilitiesR.

7 Nelson$18,50070%$12,950$294,950$100,845 Risk ValuesProject Financial Summary:42%41%$100,845$119,64375%68%$ $ DateRisk Category DefinitionProjectProject ManagerCurrent ROS:Estimated % Complete:Initial Risk Value:Current Risk Value:Total Potential Risk (Unweighted)Total Estimated Impact (Weighted)Estimated Completion Date% Budget SpendPlanned Completion DateCategoryProject Status CustomerInitial ROS:Estimated Investment:Current Investment:Project Start DateProject Information Create a Header Since a Risk Assessment Matrix is used by a project team and as a reporting tool, create a header of key information about the project. You may want to include: Project Name Customer Program Manager Key Dates Watkins Smith CorporationRF-30 UpgradeJessica AbramsMay 1, 2016 October 1, 2018 CCostAugust 12, 2018 SScheduleDecember 3, 2017 RResourcesOn TrackOOtherNumberRisk DescriptionImpact of Risk CSROM itigation StrategyRisk OwnerTotal Risk Value Probability of OccurrencePredicted Risk Value1 Customer delays release of end product into market-Delay in investment recovery-Reduced Sales next yearXX-Add customer-driven delays to penalties clause of contract-Add milestone payments for Initial Concept and Design Acceptance to shorten time between paymentsT.

8 Franklin$45,00060%$27,0002 Customer seeks to renegotiate price based on final design-Reduction in total projected revenue-Business case may not be as strong-Sales contribution from project may need to be reduced-Cost reduction may be neededXX-Track detailed cost changes throughout design evolution to show cost adjustments-Seek funding for changes to help absorb non-recurring costs impactsG. DuBois$33,05050%$16,5253 Specialize software is needed based on current project requirements-Purchase of additional software necessary-Employees will need training-Efficiency loss due to learning curveXXX-Negotiate with customer to use 'industry standard' software-Charge customer for added cost of special software under scope change Nelson$77,00025%$19,2504 Produce Validation Testing must be performed by 3rd party-Need to identify potential suppliers-Added cost of paying 3rd party-Schedule impact due to logisticsXXX-Setup test program to use only internal equipment-Work with customer to see what tests they can perform on our behalfC.

9 Jenkins$113,00020%$22,6005 Product Parts List exceeds estimated value by more than 10%-Recurring Cost in excess of business case-Reduced profit margin if price remains unchanged-Potential loss on effortX-Negotiate component costs with suppliers-Renegotiate contract price with customer based on customer-driven Hart$8,40030%$2,5206 Customer IT system/formats cannot receive project deliverables-Will need to convert formats internally -May require specialize conversion software-Schedule impact if formatting issues cannot be resolvedXX-Test software export abilities within first 90 days-Have customer provide list of formats to evaluate import capabilitiesR. Nelson$18,50070%$12,950$294,950$100,845 Risk ValuesProject Financial Summary:42%41%$100,845$119,64375%68%$ $ DateRisk Category DefinitionProjectProject ManagerCurrent ROS:Estimated % Complete:Initial Risk Value:Current Risk Value:Total Potential Risk (Unweighted)Total Estimated Impact (Weighted)Estimated Completion Date% Budget SpendPlanned Completion DateCategoryProject Status CustomerInitial ROS:Estimated Investment:Current Investment:Project Start DateProject Information All rights reserved.

10 The Managers Resource Handbook by MHX Global LLP v1 Watkins Smith CorporationRF-30 UpgradeJessica AbramsMay 1, 2016 October 1, 2018 CCostAugust 12, 2018 SScheduleDecember 3, 2017 RResourcesOn TrackOOtherNumberRisk DescriptionImpact of Risk CSROM itigation StrategyRisk OwnerTotal Risk Value Probability of OccurrencePredicted Risk Value1 Customer delays release of end product into market-Delay in investment recovery-Reduced Sales next yearXX-Add customer-driven delays to penalties clause of contract-Add milestone payments for Initial Concept and Design Acceptance to shorten time between paymentsT. Franklin$45,00060%$27,0002 Customer seeks to renegotiate price based on final design-Reduction in total projected revenue-Business case may not be as strong-Sales contribution from project may need to be reduced-Cost reduction may be neededXX-Track detailed cost changes throughout design evolution to show cost adjustments-Seek funding for changes to help absorb non-recurring costs impactsG.