# How RISK SCORE is Calculated in Oracle Primavera P6

# How RISK SCORE is Calculated in Oracle Primavera P6

# Qualitative Risk Analysis in Primavera P6

In Oracle Primavera P6, there is an option to do qualitative risk analysis. Using this option primavera p6 will generate 3 values

- Risk Score
- Pre-Response Exposure Cost
- Post-Response Exposure Cost

Out of these 3 values, in this article we will see how primavera is calculating RISK SCORE.

# Risk Score in Primavera P6

Before I explain risk score, let me explain about RISK TYPE

Risk type

There are 2 types of risk. opportunity and threat

Now let see what is risk score. According to PMBOK 6^{th} Edition, The **risk scores helps guide risk responses**. Risk scores are mentioned in **Probability and Impact Matrix** in PMBOK 6^{th} Edition .

## Probability and Impact Matrix

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## How to interpret Risk Score

Risk scores that are in threats and opportunities are divided into 3, they are

**Dark Grey Zone or High Risk Zone**– May require priority action and aggressive response strategies

**Medium Grey Zone or Low Risk Zone**– May not require proactive management action beyond being placed in the risk register as part of the watch list or adding a contingency reserve

**Light Grey Zone or Moderate Risk Score**– Risk between low and high

# How does Primavera P6 Calculates Risk Score

Oracle Primavera P6 calculates risk score from 3 factors

- Probability
- Impact on Schedule
- Impact on Cost

Lets see each in details

## Probability

Means what is the probability of occurrence of the risk, you have to choose any of the below values

**Very High (70%or Higher)**- High (50%-70%)
- Medium (30%-50%)
- Low (10%-30%)
- Very Low (upto 10%)
- For example, I am sure next week there will be high chances of rain, so I may choose Very High, means i believe there is
**Very High (70%or Higher)**chances to have rain.

## Impact on Schedule

Means If the risk occurs, then how it will impact on project schedule. You have to choose any of the below values

- Very High (20%or Higher)
- High (10%-20%)
**Medium (5%-10%)**- Low (1%-5%)
- Very Low (upto 1%)

For Example, as there are very high chances of rain next week, if it rains then its impact on project schedule would be Medium. Means, Rains effect on schedule would be between the range 5%-10%

## Impact on Cost

Means If the risk occurs, then how it will impact on project cost. You have to choose any of the below values

- Very High (40%or Higher)
- High (20%-40%)
- Medium (10%-20%)
**Low (1%-10%)**- Very Low (upto 1%)
- For Example, as there are Very high chances of rain next week, if it rains then its impact on project cost would be Low. Means, Rains effect on project cost would be between the range 1%-10%

## Let’s Summarize the example

- Next week most probably it will rain. Probability=
**Very High (70%or Higher)** - If it rains, then its impact on schedule would be =
**Medium (5%-10%)** - If it rains, then its impact on cost would be =
**Low (1%-10%)**

** **

## Primavera P6 Calculation

To analyze risk score, primavera p6 will take 2 values

PROBABILITY FACTOR AND HIGHER IMPACT (SCHEDULE OR COST)

PROBABILITY FACTOR = **Very High (70%or Higher)**

HERE HIGHER IMPACT IS ON SCHEDULE = **Medium (5%-10%)**

Now look at the table below for calculating risk score

According to our example Probability Very High X Medium Impact = 18

So **RISK SCORE=18**

Interpretation according to probability and impact matrix is, RISK SCORE 18 lies in dark grey zone or high risk zone of the matrix

**Dark Grey Zone or High Risk Zone** – May require priority action and aggressive response strategies

Hope you all understood well on how risk score is calculated in oracle primavera p6, I have done a video on this and its available in our premium course which you can find here

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