Risk scoring: turn worries into a ranked, funded list
Risk scoring turns a long list of worries into a ranked list you can act on. Probability times impact gives each risk a score. The score decides how much attention and contingency it gets.
These are the eight planning threads the Krong course is built around. The highlighted ones are covered here. What are the planning threads?
The method
- Describe the risk as a cause, an event and an effect.
- Score probability from 1 to 10 and impact from 1 to 10.
- Multiply. The score runs from 1 to 100.
- Place the score in a band. In Sen, the starting bands are Low (1 to 20), Moderate (21 to 50), High (51 to 70) and Critical (71 and over). You can change them.
- Name an owner, a mitigation and a trigger: the signal that says the risk is turning real.
Caldera Freight: the top five of 13
| ID | Risk | P | I | Score | Band |
|---|---|---|---|---|---|
| R-07 | Resistance to automated recommendations | 8 | 9 | 72 | Critical |
| R-03 | Algorithms may not achieve expected efficiency | 6 | 10 | 60 | High |
| R-10 | Vendor delays for specialised components | 6 | 10 | 60 | High |
| R-12 | Benefits shortfall against the business case | 6 | 8 | 48 | Moderate |
| R-02 | Incomplete or inconsistent datasets | 5 | 8 | 40 | Moderate |
The highest risk is people, not technology: staff may not trust automated route advice. Training and change management carry USD 320,000 of the budget for that reason.
Common mistakes
- Scoring everything high. A list with no ranking helps nobody.
- Mixing up impact and probability. Give each its own conversation.
- Writing risks with no trigger. You then notice them too late.
- Filing the register and never opening it again.
Why it is an integrated planning tool
A stand-alone risk list is just a list. Linked to the plan, it becomes a control. Each risk points to a component of the work breakdown, so you see whether it sits on the critical path. Each risk has an owner from the RACI. Risk scores roll up by component, and the component score sets its share of the contingency. Caldera Freight holds USD 240,000, which is 10 per cent of the budget. It is spread by risk, not by habit.
How Sen helps
Sen scores each risk as you type, colours it by band and groups scores by work component. The Budget tab then shows contingency against the budget. Assumptions link to risks, so each shaky assumption is tied to the risk it feeds.
Questions people ask
How do you score a project risk?
Rate probability and impact on the same scale, then multiply them. Place the result in a priority band such as Low, Moderate, High or Critical.
What is a risk trigger?
A trigger is an early signal that a risk is becoming real, for example more than five unresolved requirements issues at a gate.
How is contingency decided?
Link each risk to the work it affects, add up scores by component, and share the contingency in proportion to that risk.
See it in a real plan
Open Sen and explore the Caldera Freight example. Every figure on this page comes from it. Copy it, change a task, and watch the plan move together.
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