Project Management

Risk Breakdown Structure (RBS)

When doing Risk Management Planning, one input you need is a Risk Breakdown Structure. The model is similar to the Work Breakdown Structure. It may change during the Risk Management Planning Process. Here is an example Risk Management breakdown:

 

  • Technical
    • Requirements
    • Technology
    • Complexity
    • Quality
    • Performance
  • Management
    • Resources
    • Company Vision
    • Capital
  • Organizational
    • Dependencies
    • Budget
    • Prioritization
  • External
    • Contractors
    • Vendors
    • Customer
  • Project Management
    • Estimating
    • Planning
    • Controlling
    • Communication

 

Risk Breakdown Structures will vary between projects. One benefit of doing one is to remind those people engaged in the Risk Identification process of areas to think about. It will also be an input to Qualitative Risk Analysis where probabilities and impacts are assigned.  The impacts can be numerical or High, Medium, Low.

 

Risks are then prioritized according to their potential implications for affecting the Project’s success. Other things to take into account are stakeholder’s risk tolerance levels, reporting formats and how you will track the risks. The next step in the process will be Risk Identification.

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October 11, 2008 - Posted by | Project Management, Risk Management | ,

10 Comments »

  1. Risk management is a difficult thing to tackle since it’s hard to foresee actual versus potential risk. However, having a model is definitely the first step and this breakdown is pretty useful, thanks for posting!

    Alex
    Online project management tool

    Comment by SantexQ | March 23, 2009 | Reply

    • actually actual risk does not exist… actual risk is tantamount to certainty which makes the use of the term risk useless.
      other that that foreseeing risk is not hard once you know and use all 10 methods.(including this one)

      Comment by pink terror | May 30, 2011 | Reply

      • There is a lot of material available ftom PMI. You can also get good books from Amazon. Just search for PMP if you want a PMI sanctioned book.

        Donna

        Comment by Donna Ritter | June 18, 2011

  2. hi
    your identification was very useful for me
    thank you
    But why RBS comes to HRM in PM not in Risk Management????????

    Comment by parinaz | May 9, 2009 | Reply

  3. Your welcome!

    Comment by Donna | May 9, 2009 | Reply

  4. Yoour welcome

    Comment by Donna | May 9, 2009 | Reply

  5. The confusion that most have about a RBS is from the beginning definition by Dr. Hillson in 2002 which called the above outline a RBS (to compare it with a WBS); however, the two are entirely different.

    The Hillson definition should more correctly be called a risk classification system, and not a breakdown structure as the 1998 seminal DOD work which defined the WBS. Hillson’s RBS only classifies risk, it does not decomposition them into individually applicable units of measureable risk or risk events.

    In addition, well, you get my point. Thanks.

    PNanouk

    Comment by Paul Nanouk | October 23, 2010 | Reply

    • Excellent comment; it clarifies my confusion over how to use RBS.

      Hillson’s article cites four reasons to use RBS – (1) Identification (2) Assessment (3) Comparison and (4) reporting. Your comment seems to be directed at #1. In all the research I’ve done on the web #1 is the only one mentioned anywhere other than Dr. Hillson’s article. I think that #3 is a niche use and unlikely to occur anywhere that isn’t already using RBS extensively. #4 is a slightly broader niche.

      Can you comment on #2? Have you, or anyone else, used RBS effectively as an aid to Risk Assessment?

      Dr. Hillson’s article assumes that projection of a one dimensional list of risks into a two dimensional hierarchy is superior. There seems to be an unstated assumption that RBS is a way to capture related risk, but related risk doesn’t always fit neatly into a hierarchy – there are more complex relationships. I could imagine a risk relationship diagram as a directed graph with weighted lines connected the risk categories. I’m not sure that the complexity would be worth the cost of setting that up, but I’m not sure that the complexity of RBS is worth the investment.

      Comment by Mark C. Wallace | October 28, 2010 | Reply

      • I have – but you make a good point. The degree at which it will help varies widely between projects.
        Donna

        Comment by Donna Ritter | June 18, 2011


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