How are Risk Scores calculated and what determines the color of the individual Contributing Factors and the Overall Risk Score?
All Clarity versions
Risk impact and probability are used to calculate the risk score value (Calculated risk) for a particular risk. Risk impact and probability are lookup values in the system that have numeric values (LOOKUP_ENUM) assigned to them. The product of the impact and probability values gives the 'Calculated risk' value for a risk.
The Risk score matrix is used to determine the degree of risk (High, Medium, Low) based on the impact and probability factors of a risk. You can define this matrix in the Risk Settings page on the admin side by going to Administration -> Project Management: Risk Settings
Risk score at the project level is calculated using the building formula based on certain contributing factors (Category types). Projects that do not require detailed risks can set these contributing factor attributes on the Project Properties, Risk Rating page (Risk summary page or Settings page).
Projects that have detailed risks can create risks of particular category types(contributing factors). The system takes care of moving the average value of all the risks of a certain category type (contributing factor) to the contributing factor attribute of the project.
Project Risk Impact is determined by taking the average of the sum of all the risks impact value for a category type and then mapping it to the closest higher lookup_enum value of the impact.
The same is the case with Project Risk Probability.
Thus impact and probability for a certain category type are used to get the risk score from the risk score matrix. This value is assigned to the contributing factor attribute of the project that is one of the factors that drives the formula of the project risk score.
Note: The 'status' of a detailed Risk is considered in the overall Risk Score Average Weighted Formula, therefore, the calculation will NOT add in the detailed Risks with a status of 'Closed' or 'Resolved'.
Example: In the application, the default values for the Risk Settings are as follows:
The 'Funding' (category) contributing factor attribute will be determined from the Risk Score Matrix using the values from the impact and probability.
Average impact = SUM(Risk Impact values) / number of risks in same category
Average probability = SUM(Risk Probability values) / number of risks in the same category