Usage of RBS
Once an organisation defines a Risk Breakdown Structure (RBS), then it can be used in a number of ways. These RBS is relevant across the project and helps in the management of risk.
Risk identification: Risk identification is the first step in the determining the project risks. It helps in documenting the characteristics of risk. The first level of RBS uses "sanity check" to make sure that the risks included in all the tasks of a project are covered during the risk identification process. RBS initiates the iterative process which runs throughout the project life-cycle and the frequency of this iterative process vary at each phase of the project life-cycle.
The risk identification checklist, which is in the form of levels, can help project managers and risk managers in their future projects. The risk identification further leads to quantitative risk analysis, which is also done by the project risk manager.
The risk identification also helps to find the proper response which is then entered in Risk Response Plan.
Risk analysis (Quantitative risk analysis): The risk analysis process helps to place the identified risks within the Risk Breakdown Structure (RBS), by categorising it into various levels. Risk analysis uses various techniques for determining risk probability, risk prioritising, and calculating risk impact. Based on the priority, probability and impact of each risk, project manager or the risk manager can generate a risk count for an RBS. This is basically done for each group of risks and for each level of the RBS.
With the help of Risk Breakdown Structure, a clear picture of analysis of the identified risks can be obtained. This analysis helps to determine
- Type of risk exposure
- Dependency between risks
- Relationship between different risks
- Reason for risks
- Importance of risks