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Oil & Gas

What Metrics to Look for When Evaluating Risks

Risk Management
Posted: January 26, 2022 at 2:09 pm   /   by   /   comments (0)

Risk management is essential when it comes to any kind of project or program. Risk management will allow you to identify, manage and mitigate the associated risks that could derail your project and impact the overall success. In today’s data-driven age, there are a number of metrics to look out for when evaluating risks that will be key to the success of your projects. Risk management metrics can provide a greater insight into risk exposure and whether or not there is any action that needs to be taken. So, if you want your projects to be more successful, then read on to discover the key metrics that you need to look out for.

The Number of Risks

First, you will want to identify the number of risks that a particular project has. Knowledge is power and key to success when it comes to risk management, so before you start work, you need to identify exactly how many risks there are. Risk management software providers Sword GRC have a range of white papers on risk assessment that could be useful in helping you to tally up the risks involved and how they can be managed. Similarly, during or after the project, you need to analyse how many of these risks became real-life issues.

Percentage of Process Areas Involved in Risk Management

A business is the sum of its parts, which means that a risk in one area can impact many other areas of the business. This is why risk management needs to be broad and look into various different process areas for a more complete overview. This is a metric known as the percentage of process areas involved in risk management and it is another key area of risk management.

Reoccurring Risks

Sometimes, a business will find that there are risks that reoccur in each project and become issues to manage. This is an important risk metric because it clearly communicates that there is a fault in the risk management stage and/or your teams are not learning from previous mistakes on projects.

Risks Not Identified

Following on from this, you also need to reflect and analyse any risks that occurred that were not previously identified. Even with robust risk management, there are sometimes unforeseen risks that can slip through the cracks and cause disruption. You can look at the issue log and try to pick out any risks that were not identified but perhaps should have been.

Cost of Risk Management

The cost of risk management will be another important metric that needs to be analysed. You can track the money actually spent compared to forecasted spending and this will be key when making estimates when managing risk on any project in the future.

These are a few of the key metrics that you need to look out for when it comes to evaluating risk. Risk management is an important process to go through when planning projects, and these metrics should help you to make sensible decisions to improve your outcomes.