I use one of two formulas (more like one formula with different numerical definitions).
The first assigns a ranking to both probability and impact and multiplies the two:
PROBABILITY * IMPACT = RISK
CHAPTER 11 n DISASTER RECOVERY PLANNING 271
The result is the numerical, overall risk of the disaster, which you can use to rank
your activities. Pretty simple, isn??™t it? Well, it has a few drawbacks. First, if you select a
wide range of numbers to represent probability, it will take more time and thought to
choose the appropriate risk level. I never use a scale of more than 1??“10 for either, and
usually I try to keep it to 1??“5, with the highest number being the greatest probability or
impact. Trust me, if you move to a scale greater than 10, you??™ll spend far too much time
on risk identification.
The other drawback to the arbitrary weighting technique is that if you use a narrow
scale, as I??™ve advocated, you??™ll have numerous ties, which again will require you to make
a judgment call. If you do have numerous high-level ties, this tells you two things: 1) you
have a lot of work to do, and 2) you aren??™t working iteratively.
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