Thursday, November 28, 2019

Practical RMP: How To Create A Butterfly PI Matrix Report in Risk Management



The butterfly probability and impact (PI) matrix report is a highly effective report in risk management. The reasons are:
  • You can see both threats and opportunities together in one matrix. It will be for both pre- and post-mitigated risks. 
  • It’s quickly communicated as it doesn’t have too much content, rather just the content one needs to know on what is happening to the risks in a project. 
  • It’s visual and appealing. Hence, it is quickly understood by stakeholders, who don't want an in-depth risk reporting. 
In this post, I’ll outline 5 steps to generate the butterfly matrix report. 

These steps are taken from “Practical RMP with Primavera Risk Analysis” course. This course comes with full money back guarantee.

Note: If you are preparing for the Risk Management Professional (RMP®) exam, you may get questions on interpreting a butterfly matrix. Some successful RMPs have informed that they have received such questions. 

I’ve seen butterfly matrix for a long time and the PMBOK® guide has this report from its 3rd edition onward. The below figure is taken from PMBOK, 6th edition. The PMBOK Guide calls it a probability and impact matrix (or PI matrix).


Image Credit - PMI-PMBOK Guide, 6th edition
As shown above, both threats (or negative risks) and opportunities (or positive risks) are shown in the matrix. You can plot the risks of your project on this matrix in order to show the current status of risks in your project. The probability scale is on the Y-axis, whereas the impact – positive or negative – are shown on the X-axis.

Why Called Butterfly PI Matrix? 
The PI matrix is named as butterfly matrix because of its shape. It has one wing on either side – threats (or negative risks) on one side and opportunities (or positive risks) on another. This, in turn, takes the shape of a butterfly and hence, the name.
Image Credit: clipart-library.com

Next, let’s see how to create this report.

Step – 1: Define your Probability and Impact Scales
You must define your probability and impact scales before you can create this report. This is done in the “Plan Risk Management” process of Risk Management. After their creation, they will be documented in the Risk Management Plan.

Taking a real example for Practical RMP course, it will come as shown below. This I’ve listed as one of the benefits in using Practical RMP course.


As shown above, the probability scales used are from “Very Low (<=15%)” to “Very High (>70%)” and Impact scales and types used are for Schedule, Cost, Quality etc. This in turn creates the Probability and Impacting Scoring matrix with color coded information on the overall score of the risk. This is depicted in the below figure.


As shown above, if the risk score (multiplied value of P and I) falls between 1 to 5, it’s in green color, whereas if it falls between 24 to 72, it’s in red color. Similarly, it’s for the yellow color coding.

Step – 2: Populate the Risk Register
The next step involves creating and populating the risk registers with actual risks identified in your project. An actual risk register taken from a real project is shown below.


Analyzing the risk register, we have:
  • Total 8 risks from Risk 001 to Risk 008.
  • There are 7 negative risks and 1 positive risk.
  • Risk 006 is an opportunity whereas rest are threats.
This happens in the “Identify Risks” process of Risk Management and the above image is taken again from the Practical RMP course.

Step – 3: Qualify the Risks 
As you qualify the risks, the actual risk scores will now be entered into the risk register. This are basically the pre-mitigated risk scores for the individual project risks. The above figure (in Step - 2) has a risk score for every risk. 

Qualification of risk is done in the “Perform Qualitative Risk Analysis” process of Risk Management.

Step – 4: Develop and Implement Risk Responses 
In this step, you are developing the risk responses for both positive and negative risks. You can apply various mitigation strategies such a reduce (mitigate), accept, transfer (for threats) or exploit, enhance, accept (for opportunities). With that, you will have the post-mitigated risk scores for the individual project risks. 

This happens in the “Plan Risk Responses” process of Risk Management. The response actions developed are subsequently implemented in “Implement Risk Responses” process.


As shown above, now you have both pre- and post-mitigation details for the individual project risks. However, in a risk register containing many risks, you can’t quickly decipher what is the current risk status and whether you should act upon or just monitor the risks. 

This is where the Butterfly PI Matrix report comes in. 

Step – 5: Generate Butterfly PI Matrix Report
You can generate this report in under one minute with Primavera Risk Analysis (PRA) software tool.

To do so, go to Risk Register:
Reports – Report Manager…, which launches the below window.

To generate the report, select the “ButterflyMatrix.xrb” file and then just click on the “Publish” button. If the report is not generated, ensure that you have “ButterflyMatrix.xls” loaded for this report. This will be the stylesheet for this report.

When the report is generated, it will have the following summary information.

It clearly lists out the total risks (proposed and open) and the number of high, medium, and low risks, along with the number of threats and opportunities.

Just below the report summary, you will have the pre-mitigation details of the risks in the Butterfly PI Matrix for both opportunities and threats. This is shown below.


As shown above, Risk 006 is an opportunity and it’s a high risk. On the other hand, Risk 003 is a low risk, Risk 007 is a medium risk and these are threats. Similarly, you have Risk 005 and Risk 008 noted as high risks. All these risks are highlighted in blue elliptical circles in the matrix.

Below the pre-mitigation details of the individual risks, you will have the post-mitigation details of the risks in the Butterfly PI Matrix report. This again will be for both opportunities and threats. This is shown below.


As shown above, post mitigation, Risk 005 has been brought down to a very low zone, so also Risk 008 (it's a proposed one, but I've used it to show the functionality). Similarly, many other high or very high risks have been brought down to low or very low zones. All these risks are highlighted in blue. Risk 006 is no longer shown in the post-mitigated matrix because the risk score didn't cross the risk threshold. You can customize the report further to see the details on the profiles of the risks, or you can take that information from the generated summary risk report.

As you can see, with this report you can quickly find out what's happening to the risks in a project, the current status of individual project risks in a visual way. It's also effective and elegant.


You may also like:

No comments:

Post a Comment

Sign- or Log-in and put your name while asking queries in comments. Any comment is welcome - comments, review or criticism. But off-topic, abusive, defamatory comments will be moderated or may be removed.