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The impact of a risk
is a measurement of the effect the risk will have on your objectives
if it occurs.
Before you can measure effects on your objectives you must be aware of your Risk Context. If you are running a project, for example, for which the completion date is not a very significant factor, then risks affecting only schedule are not going to be very important. On the other hand, if completion date is critical, then schedule-related risks are obviously going to be significant. Most programs or projects can identify up to about half a dozen significant objectives. (If you have much more than this number you are probably defining your objectives too finely.) For a typical program or project the objectives might be cost, schedule and scope, or it might be such things as client satisfaction or health & safety. In order to assess the impact of a risk in a consistent and objective manner, we need to set up a predetermined scale for each significant objective. If the objective is cost control, for example, a typical scale might look like this: 
If the objective is health & safety, a typical scale might look like this: 
Combining Individual Impacts
A simple way to do this is to take the highest rated impact of all the objectives and call that the overall impact. This, of course, assumes that the scales for different impacts are equivalent to each other. For example, would a level 5 cost impact be the same as a level 5 health & safety impact? One way to do this would be to carefully craft each scale so they are equivalent. A better way to do it is to use standard scales and apply a weighting factor to each to scale so that the weighted impact values are indeed equivalent. The overall risk impact is then the highest of the individual weighted impact values. |
