Clarity PPM - Risk Scores Calculation / determining the color of the Risk Score
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Clarity PPM - Risk Scores Calculation / determining the color of the Risk Score

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Article ID: 27099

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Updated On:

Products

Clarity PPM On Premise Clarity PPM SaaS

Issue/Introduction

How are Risk Scores calculated and what determines the color of the individual Contributing Factors and the Overall Risk Score?

Environment

All Clarity versions

Resolution

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

Project Risk Score:

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. 

Average Impact

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.

Average Probability

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:

  • Risk Impact: Low (1), Medium (2), High (3)
  • Risk Probability: Low (1), Medium (2), High (3)
  • Risk Rating: Low (0), Medium (50), High (100)

    A project has two risks of 'Funding' category type.
    1. Risk 1 with low impact and low probability ( calculated risk=1, risk rating=low)
    2. Risk 2 with high impact and medium probability ( calculated risk=6, risk rating=High)

Contributing Factor Risk Score

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 impact=(1+3)/2 = 2 ('Medium' Impact Rating)
Risk 1 = low impact (1)
Risk 2 = high impact (3)
There are two risks with the same category type

Average probability = SUM(Risk Probability values) / number of risks in the same category

Average probability=(1+1+2)/3=1.33 (this is less than 2, so it equates to 'Medium' Probability Rating)
Risk 1 = low probability (1)
Risk 2 = medium probability (2)
There are two risks with the same category type

Additional Information

Risk Categories Lookup - manage the list of values

Some Contributing Factor Risk fields are read-only