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Calculating Potential Risk Cost

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The Potential Risk Cost of a project is the sum of all Potential Costs associated with a risk multiplied by the Probability with which the risk might occur. The Planned Risk Cost of a project is identical to the Potential Risk Cost. 

The Potential Risk Cost is not incorporated into the Planned Cost of a project. It is instead used to determine its Net Value. The Potential Risk Cost may be identified in the project itself in the Risks tab or in as part of the Business Case.

You can find the Risks for a project and their Potential Cost in the following areas in Workfront:

  • In the Risks tab of the project.
  • In the Business Case Summary. 
    For more information about the Business Case of a project, see "Creating a Business Case."
  • In a project report when you add the Planned Risk Cost field to the columns of the report. 
    For more information about building reports in Workfront, see "Creating a Report."
  • In the Portfolio Optimizer, when the project is associated with a Portfolio, in the Risk column. 
    The sum of all Potential Risk Costs of all projects in the portfolio adds up to the Risk of the Portfolio. 
    For more information about the Portfolio Optimizer, see "Understanding the Portfolio Optimizer."

For more information about creating Risks on a project, see "Creating and Editing Risks on a Project."
For more information about the Business Case of a project, see "Creating a Business Case."

The Potential Risk Cost of a project is calculated by the following formula:

Potential Risk Cost = SUM(Risk Probability * Potential Cost of Risk)

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Linked to Understanding the Portfolio Optimizer.