MANAGEMENT YOGI: A Practical Risk Breakdown Structure with MS Project and Primavera Risk Analysis (PRA)

Sunday, January 28, 2024

A Practical Risk Breakdown Structure with MS Project and Primavera Risk Analysis (PRA)

In the earlier article, I wrote about various Breakdown Structures and specifically, the Risk Breakdown Structure (RBS). As noted in the previous article, breakdown structures are progressively decomposed into greater levels of detail.

But then the following questions come-up?

How does that happen practically?
How does the RBS level (Level n) be associated with the identified risks?
What is its usage as you proceed with risk management?

To know these, one needs to know how an RBS is prepared in a practical manner with a hands-on software tool. In this article, I'm going to use the Primavera Risk Analysis (PRA) software.

The content of this article has been taken from this course: Practical RMP with Primavera Risk Analysis.

Now, let’s see the various steps and its role in risk management in a hands-on manner.

Step – 1: Create the Plan

I’ve a simple plan created with MS Project (MSP), which is shown below. It has a couple of work packages and associated activities.

Next, I’ll take this plan and import it into the Primavera Risk Analysis (PRA) software. After the import, it’ll look like the following one.

As you can see, this plan in the PRA is an exact reflection of the previous plan in MSP.

Step – 2: Build the First-Cut of RBS

Now for the above plan, we are going to create the first-cut risk breakdown structure (RBS).

To get to the Risk Breakdown Structure in the PRA software, first you have to open the Risk Register by going to PRA Menu and using Risk > Register… command. This will open the default risk register without any entry.

From there, execute the Edit > Risk Breakdown Structure … command.

As shown above, at this stage, the risk register doesn’t have any entry at all. Stay with me! We are going to add risk (s) and associate them,

Now, with the above command the RBS first view will come-up.

As shown, the current RBS:

Four entries – Organizational, Commercial, Environmental and Technical.
Each of this entry is at Level – 1. One can add as many entries as one wants. We will see that shortly.
There are commands on the right such as Insert (for insertion of new levels), Edit (to edit the names), and Delete (to delete any level).
Below the delete command there are left, right, top and bottom arrow marks, which are used to change the levels and indentation.

Step – 3: Add Risks into the Risk Register

Our next step will be to add a risk into the risk register. Click the OK button in the previous screen to close the above RBS window and go back to the risk register.

To add a risk, simply type the risk in the “Title” part/column of the risk register. The risk will be populated with ID, T/O (threat or opportunity), Probability scale and Impact scales such as schedule, cost, performance, score etc.

As shown above:

We have Risk ID – 001 and it’s a threat or negative risk.
The default probability value is Very High (VH).
The default impact scales are VH, VH and VH for schedule, cost and performance, respectively.
The scope has been calculated to be 72 internally with the help of PRA Risk Matrix.

The most important one to note for this article and at this stage is this:

RBS is shown in the bottom right half of the above view.
There is no level for the RBS. In other words, the risk is not associated with any RBS level.

Step – 4: Build A Refined RBS

Next, we will go back to the RBS and add a few more levels, e.g., Scope. I’m taking scope, because in the previous step we just added a scope related risk.

Do note that:

RBS Level – 0 is the project level.
RBS Level – 1 is Scope, Political, Environmental etc.
RBS Level – 2 will be another one. For our case, we will take two: Scope definition and Scope Change.

You can go to any level you want. However, do ensure that it’s reasonable and not too fine-grained. Many risk management practitioners get into very low levels, which can pose problems later.

After adding the levels, the refined RBS will look as shown below. This is again drawn with the PRA software.

I’ve used the Insert, Edit, Delete and arrow commands to create this structure. For example, to move the Technical (L1 of RBS), I’ve used the up-arrow mark. To add a new level of Scope (L2), I’ve used the Insert command. To add another level of Scope definition (L3), I’ve used the Insert command and right arrow mark.

You can click on the “OK” command to close the RBS and go back to the risk register.

Step – 5: Associate the Risk with the RBS

Next, we are going to associate the risk with Scope change (L3) of the RBS because the risk “Scope related risk” is due to the rapid scope change.

To associate with a risk, use the “…” command next to the RBS text box. This is shown below.

As you select the “…” command, the Select Risk Breakdown dialog box will be opened-up. Choose the Scope change (L2) and click on the “OK” command.

Next, the risk in the register will be associated with this level of RBS.

As shown in the above figure:

Risk ID – 001 of scope related risk is now associated with an RBS element.
The element is “Technical.Scope.Scope change”.
Technical is at L1, Scope is at L2 and Scope change is at L3.

That’s it! If you could follow these simple steps, a practical RBS can be created. And you can associate all the risks of the register with various levels of RBS.

Conclusion

As I just demonstrated, the risk breakdown structure can be a key artifact used in Risk Management used in conjunction with the risk register. Like WBS is important to know the required deliverables, the RBS can be crucial, if you're really doing risk management.

As WBS can be used as a communication tool, the RBS can also be used as a communication tool. The risk register with various levels of information can be exported to an excel sheet. This can be communicated with the stakeholders.