Risk Management Software: Risk Matrix
A matrix is a two-dimensional array; an array made of rows and columns. In risk management the risk matrix is a mean to visualise these two dimensions in order to display the ranking of a risk. It is made of the consequence of a risk when occurring and the likelihood of a risk to occur.
The number of columns and rows in a risk matrix can be different depending on how much refined the risk assessment shall be. Very common are 5x5 or 9x9 risk matrices. To build the risk matrix you will divide likelihood and consequences into steps. For a 5x5 matrix the likelihood could range from 'very unlikely' and 'unlikely', via 'occasional' to 'likely' and 'very likely'. Consequences of a risk could range from 'negligible' and 'minor' via 'moderate' to 'major' and 'extreme'.
Within such a risk matrix you can display all your risks and see the risk ranking class it belongs to. Give it some colours like a traffic light and you easily can set priorities for your risk in order to take action. What is displayed qualitatively in a risk matrix can be understand quantitatively as risk costs defined as calculation of likelihood and consequence.
The Risk Matrix - Benefits
This display of a risk rating in form of a risk matrix helps to:
The risk matrix is a tool that can assist you in risk management. However, it is not guaranteed that the risk matrix is always the best practice.
Risk Matrix in Risk Register
In Risk Register you can select the type of risk matrix you wish to use. A 9x9 risk matrix provides you with the most granularity and flexibility. A 5x5 risk matrix is simpler. In the health industry you can find the triage style risk matrix in use.