When you perform risk management the right way, the company experiences profits. It is a necessary task that all teams must diligently implement. In this article at Ten Six Consulting, use 7 metrics to check if you have implemented risk management the right way.
Metrics to Measure Risk Management
A team performs risk management specific to its project. Not many do for the entire company. Several teams within your organization might be struggling with the same issue. Below are the 7 metrics to help you assess:
The Number of Identified Risks: Track the number of risks every project or program is encountering. The number will be less for the projects you have done before. Risks will be more for those that are following new methodologies. To make risk management easier to handle, compare projects that have similar features like timeline, goals, and complexity.
Number of Issues: Discover how many risks later turned into issues. If you identify many, you are analyzing risks and implementing risk management the right way. If the teams have logged numerous risks but hardly any came up, they are looking in the wrong direction.
The Number of Repetitive Risks: Effective risk management will not allow the same risk to occur again. If this is happening in several projects, the teams are not learning from their past mistakes.
Predicted Risk Severity versus Actual Severity: When risks become issues, compare between their predicted and actual severity. You need an experienced eye for this task. If you are successful, you can figure out how well management plans are working.
The Number of Unidentified Risks: Teams can argue that they cannot respond to a situation that has not happened yet. To simplify the task, think of it as an issue that you should have flagged as a risk but did not. Check the issue log and understand how many you could have avoided at the risk assessment stage.
Cost of Managing Risks: The hours the teams spend on assessing and mitigating risks cost your project and company billions. Compare your predicted and actual cost estimate for improved future project estimation.
Number of Risks You Closed: Count the number of risks that did not affect your project and if you have proactively worked on avoiding them. If you successfully identified and closed several risks, effective risk management is in place.
To view the original article in full, click on the following link: https://tensix.com/2019/02/7-risk-management-metrics-to-track/