Benefits Of The Standard Risk Model

The standard risk model is used by many different organizations. It is different than the simple risk model. In fact, I compared the standard risk model and simple risk model which I suggest you read. In this post, we will discuss six reasons why the standard risk model is preferred.

1. The Standard Risk Model is clear and concise.
2. It clearly separates risk events and their impact, thus, supporting cause and effect analysis [Smith and Merritt, 2002].
3. Separating risk and impact reinforces the notion of prevention or contingency planning for risks [Smith and Merritt, 2002].
4. The Standard Risk Model is supported by ISO 31000:2009 and it can be applied to any industry “regardless of its size, activity or sector” [ISO 31000, 2009].
5. By allocating the drivers relating to a risk event, the team can identify the project threats and deal with those that contribute the most to risk events.
6. Because this is a standard model widely used internationally, it will be easier to compare the project risks against known risks in other similar projects. This allows the team to address similar risks with less resources, improves the team’s learning curve, helps prioritize risks, and focuses the team on unresolved risks.

References
[1] P.G. Smith, G.M. Merritt, Proactive Risk Management (Boca Raton, FL: CRC Press, 2002).

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