Budget-based Risk Scoring

Preparations for Using Risk Budgets

Preparations start from a dashboard that includes the Administration Controls widget, which is available for an unrestricted administrative user.

Set the Application Settings to Budget-Based Risk Scoring

Steps to take:

  1. As an administrator, go to the Administration Controls section of the dashboard and select Environmental Settings.

  2. Select Risks in the left menu and activate the 5th toggle: Use Budget-Based Risk Scoring.

  3. Do not use the setting “Show Risk Quantitative Scoring Details” (this will display extra details, which might be confusing if budget-based risk scoring is used as well).

  4. Restart the application by pressing Ctrl + F5 or Ctrl + R.

Define Risk Scales Including Financial Impact and Likelihood

Steps to take:

  1. As an administrator, go to the Administration Controls section of the dashboard and select Standing Data. The menu shows a screen with this set up (without values):

  2. Go to Risk > Risk Scores > Risk Financial Impact.

    • Five score options are predefined.

    • Each option can contain an explanation via the field “Name”, e.g., "1. Very low (less than 5%)" or "3. Moderate (between 20%-30%)".

    • For each score, a range can be given in Min% and Max%.

    • Note: The financial impact score is calculated only for defined ranges. If there is overlap, the highest score is chosen. Ranges should be contiguous or slightly overlapping. The Min% of the lowest range and the Max% of the highest range can remain undefined.

  3. Go to Risk Likelihood: Define likelihood ranges in a similar manner (e.g., 1%-5%, 5%-10%, etc.). Ensure the complete range from 1%-100% is covered.

  4. Go to Risk Impact Scales: Define alternative impact scales such as Reputation or Quality.

    • Click + ADD.

    • Give the scale a name.

    • Enter the required scores.

    • Add a qualification to each score.

Define Budget per Organization

Defining a budget for an organization is a new functionality available only for administrative users.

Steps to take:

  1. As an administrator, go to the Administration Controls section of the dashboard and select Organizational Budget (after restart if settings have changed).

  2. Two columns are displayed:

    • The first contains an overview of the internal organization as defined in CERRIX (Admin Module > Standing Data).

    • The second column is used to define budgets per department.

  3. After defining the budgets, press Save.

Risk Budget-Based Scoring

Score the Risk Financial Impact

Steps to take:

  1. Choose a risk of an organization with a budget.

    1. In the risks, the budget that's shown is associated with the organization for which the risk is defined.

  2. Enter the Gross Likelihood.

  3. Enter the Gross Financial Impact in Euros.

The Financial Impact Scale will be automatically calculated based on the given budget.

Example:

  • Organization budget: €800.

  • Gross financial impact: €500 (60% of budget → Score 5: Catastrophic (>40%)).

  • Net financial impact: €300 (37.5% of budget → Score 4: Significant (20%-40%)).

  • Final Financial Impact Score: 4. Significant (20%-40%).

Potential Loss Calculation:

  • Gross financial impact: €500.

  • Min & max gross likelihood: 10% - 20%.

  • Potential Gross Minimum Loss: €50.

  • Potential Gross Maximum Loss: €100.

Score the Overall Risk Impact

The overall gross impact score can be entered manually.

  • The overall score is checked against leading impact scales.

  • If no leading impact scale is selected, it will be checked against all impact scales.

  • If the leading impact scale or the max impact scale do not match, a warning is displayed.

  • If the warning is clicked, the overall impact is adjusted.

Risk Workspace

If the budget-based risk scoring is active, in the workspace the Gross and Net financial impact is shown per risk.

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