Risk Breakdown Structure – A Risk Management Tool


Risk Breakdown Structure (RBS) is defined as “A source-oriented grouping of project risks that organizes and defines the total risk exposure of the project. Each descending level represents an increasingly detailed definition of sources of risk to the project.” – David Hillson[1]

Instead of going through big spreadsheet with hundreds of verbose entries about risks, RBS provides – a pictorial representation of related items through tree structure as an excellent way of getting the whole picture in a single place for effective communication, management and governance.

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Organizations have common list of risk categories or even template with sample risks for each category and type of project. This can be used as starting point for risk identification. Though RBS has lot of advantages – here are few:

* RBS give structured approach to risk identification through which all risk areas are explored without fail

* Grouping risks by common root causes can lead to developing effective risk responses

* RBS helps in risk assessment by interviewing or meetings with participants selected for their familiarity with a specific risk category

* RBS give greater ability monitor and control risks identified classified under the same area or root

References:

1. Use a Risk Breakdown Structure (RBS) to Understand Your Risks, David Hillson, Proceedings of the Project Management Institute Annual Seminars & Symposium October 3–10, 2002, San Antonio, Texas, USA. Retrieved from http://www.risk-doctor.com/pdf-files/rbs1002.pdf