The premise for this report is simple….To get the financial impact of risk in front of your senior management team. Sounds sensible doesn’t it? There is nowhere to hide and no excuses when you present impacts in real cost terms. You may stir up a hornet’s nest and people may challenge the impact estimates or probability but don’t get defensive of the numbers, just politely but firmly point out the process to re-estimate risks and ask for their contribution…once they realise they have a direct link into the process they will stop challenging the content and start focusing on effective risk treatment and exposure management.

The graph below is a straightforward manifestation of this principle. The example below shows ten risks plotted using exposure start and end dates, exposure severity (impact multiplied by probability) and plotted cumulatively over the length of the project.

So what analysis can we derive from this graph?

• Total estimated exposure at any point in time (useful for determining the potential level of contingency draw-down over the life of the project);
• Risk expiration over time. This will allow down-sizing of the contingency budget as the project progresses (this is especially useful over long projects or programmes when the contingency can run into the millions); and
• Risk peaks and troughs. This will help you prepare for times of higher probability peaks of activity (this can be driven by contingency plan implementation or execution of planned mitigation actions).