Here is the sequence of steps for risk prioritization
- Develop the risk register
- Define the probability and impact scales
- Assign probability and impact ratings to the risk
- Perform qualitative risk analysis by prioritizing the risks based on their Probability x Impact value
- Some of the other parameters used for risk prioritization are;
- Difficulty in detection of the risk
- Urgency – If certain risks are going to happen immediately, that must be factored into risk prioritization
- Define thresholds – These are triggers for action
- Project-wide thresholds could be established to involve senior management when product costs exceed 10 percent of the target cost or when cost performance indices (CPIs) fall below 0.95.
- Schedule thresholds could be established to involve senior management when schedule performance indices (SPIs) fall below 0.95.
- Performance thresholds could be established to involve senior management when specified key items (e.g., processor utilization, average response times) exceed 125 percent of the intended design.