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Risk Category Description

 
Risk Category Description provides the ratings used to quantify and compare risks. Typically there are five levels of rating for each category, but if your organization will use a different matrix (e.g., 3x4 or 1x5), you will only need to define the ratings applicable to your chosen scale.
 
Records from this node populate the Likelihood Rating and Consequence Rating pull-down menus on the Risk Mitigation form in RAM. Name and Sequence provide the pull-down option, while Description gives the hover hint for each. For the RAM user interface to function properly, each record must contain a sequence value, the associated Likelihood or Consequence Category, a name, and a description.
 
 
Completion of this node is necessary for the ability to quantify risks and compare multiple risks to support risk-based decision making. The ratings across categories must be equivalent so that a risk rated as a 4 consequence in one category is equivalent to a 4 consequence rating in another category. It is often helpful to create a rating scale and have stakeholders weigh in on the ratings prior to completing this node.
 
The ratings should be spread equally over the number of intersections you will have on the Risk Matrix. In a risk tolerant organization, likelihood is often spread evenly, such that on a 1–5 scale, each range would be 20%. Risk averse organizations, such as government entities, tend to skew the percentage ratings as seen in the SAR example architecture. If consequence is expressed from no impact to catastrophic, then on a scale of 1–5, a schedule consequence might range from “Within Schedule Margin (minimal impact)” to “Increases Schedule by more than Six Months (project cancellation)”. Intermediary steps would then be similar to “Increases Schedule by less than a Month”, “Increases Schedule by One to Three Months”, and “Increases Schedule by Three to Six Months”.
 
The record values set in this node define the labels of the axes in the Risk Matrix tab. The Category is displayed in the darkest blue label, the Description in the medium blue, and the Name in the lightest blue. The sequence values increase from bottom to top on the Y-axis and from left to right on the X-axis.
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