Risk Burndown Chart: Example & Overview

Instructor: Lucinda Stanley

Lucinda has taught business and information technology and has a PhD in Education.

This lesson will discuss the need for a risk burn down chart. It will also show a step by step process for creating a risk burn down chart that can be used for risk management.

Project Management and the Risk Register

Whether your project is big or small, there are bound to be some risks involved. A key part of effective project management is to recognize the possible risks and determine how those risks could affect the completion of the project. Risk can be positive (opportunity) or negative (threat) but managers should know what they are and have a plan in place to mitigate or capitalize on these risks should they occur.

In the Agile project management process, it is a good idea to generate a risk register. This is a list of potential risks to project completion. The register should include a description of the risk, the date it was identified, the probability of the risk occurring, how severely the risk could impact the project, what action should take place, and the risk status; is it open or closed? Ongoing or past the point where it is still an issue? Once we have a risk register, we can create a risk burn down chart which will show the ongoing level of risk and how the risk diminishes over time until it is no longer a risk. Burn down charts can show, graphically, how risks can impact a project and are often used as a basis for getting additional funds for the project approved. Let's start by taking a look at a very simple risk register:

Risk Register
risk register

This risk register shows us the details for one potential risk to a software development project. This is great, but what we need is a way to show all the risks in relation to each other. Using the risk register, we can create a risk burn down table that we will eventually use to create a risk burn down chart.

Creating a Risk Burn Down Table

We need some information from the risk register to create the risk burn down table:

  • Description - A short statement of what the risk is.
  • Probability - How likely is it that this risk will become an issue?
  • Cost in time - How long will it take to mitigate the risk?
  • Exposure: The product of probability and cost in time (multiply the probability by the cost).

A simple table of risk would look like this:

Risk burn down tablecaption=

With this, we can now create a chart or graphical representation of the risk.

Creating a Risk Burn Down Chart

If an agile team is using sprints, meaning the project has been broken down into smaller segments to be completed, the risks are assessed at each sprint meeting, and a countdown can occur that shows the level of risk either increasing or decreasing. Using the data from the risk burn down table we created already, let's say the risk is decreasing for each item the further into the project we go, we could make a table showing the decreased risk exposure.

Risk Exposure
risk exposure

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