ABSTRACT
A common problem in project risk management processes is the need to determine the relative significance of different sources of risk so as to guide subsequent risk management effort and ensure it remains cost effective.
A common approach is to use some form of ‘probability impact grid’ to identify sources of risk which will receive the most attention. This paper examines the shortcomings of such techniques in identifying important sources of risk and considers the information needed for a proper assessment of importance. In particular it is desirable to distinguish between the size of impacts and probability of impacts occurring, the range of feasible responses, and the time available for responses. The paper offers some practical suggestions for dealing with this problem.
