The output of a risk workshop is a set of risks in priority order, generally with someone's name against each of the most severe. The severity of risks is assessed by evaluating their likelihood and impact and using a classification matrix similar to that illustrated here. Risks will usually then be reviewed at regular project meetings and subject to a major review every 6 to 12 months or at times of significant change and disruption. An assessment can be made of the overall risk associated with a project, generally in terms of its financial and schedule targets, given a defined scope and plans. Models can be used to represent individual uncertainties in terms of probabilities and distributions and link them to the uncertainty in the overall outcome of a project.
Models simplify target setting and the establishment of realistic contingency holdings.
The output of a risk model offers a sound basis for negotiating commitments between customers and suppliers or between business managers and project managers. The results can also be used to weigh the risk of a project against the general level of risk in an organisation's operations as a whole. A typical risk model output is illustrated schematically below. It shows the range of realistically likely outcomes for a measure that you would generally want to minimise, such as the cost or duration of a project, and the likelihood of exceeding a target set somewhere in that range. If you know what expectations already exist about a budget or completion date, you can use this to decide if they are realistic.