Risk Management Software: Action Assessment
Now we have a couple of candidate or alternative actions that may help to mitigate probability and/or impact of risks. The next step is to select the best action(s). What are the best candidate actions? We call those cost-effective which have the most positive effect on our uncertainties at the lowest possible costs.
To facilitate the selection of the best candidate actions RiskDecision provides a Decision Support Map which shows Candidate Actions displaying the underlying Risk Factor (or Risk Cost) and the Action Cost. To explain this further let us first take a look at the Decision Support Map. (We will not compare qualitative and quantitative again as their principles are the same)
We see three candidate actions for an uncertainty with a risk factor of about 40K$. Preferably, we will select the candidate action with the low cost of about 2K$. Depending on our estimation of effectiveness we will select one or more candidate actions.
The Action Edit Box
The Action Edit Box helps us to edit the Action.
The Action Edit Box displays the required minimum effectiveness to get a Return-on-Investment larger than 1, i.e. break even for an action becoming cost-effective. In the example above this minimum effectiveness is 5%.
When we now decide for implementing this action we turn on the button 'Implemented'. This opens the trial assessment in which we can re-assess the uncertainty after implementing the action.
The Decision Support Worksheet shows three rows:
The first row is the 'Baseline' displaying the assessment before taking any action.
The 'Previous' row shows the assessment for all actions taken for this uncertainty. We see that the Risk Factor decreased from 12.25 to 7.00. Including the Action Costs the ROI of the actions taken so far is 1.05. This is slightly cost-effective, but needs improvement.
Our latest action taken was able to decrease the probability to 10%. The resulting Risk Factor is 3.50. The ROI now is 1.75 which is a much better result. When being satisfied we accept the changes. If we prefer another solution we reject the changes and start with another action or keep the status we have achieved so far.
Uncertainties - Before and After Actions
You can view the effect of your actions graphically, too. The After Actions graph below shows both the current (after action) assessment and the position of the uncertainty before action.