When authorized, administrative users clicking on the "Set-up" menu option, will see a list of items to set-up or configure. Select "Risk Policy" from the menu (highlighted below). You will see a list of all the risk, issue and opportunity policies in use in your company.

Double-click on the risk policy which you want to edit, or click on the toolbar + button (not shown below) to create a brand new risk policy.

Once you open a risk policy, aside from the policy code (non-changeable) and policy description (editable), you will see the different scales used for:

1. Converting the cost impact from a monetary amount to a more generic score
2. Converting the schedule impact from a number of days lead-time to a more generic score
3. The options and scores to select for the performance impact
4. The overall impact score, which adopts the highest or worst-case of cost, schedule or performance impact by default
5. The radio buttons options (and their associated % scores) to select for the probability of the risk occurring
6. Work with your consultant to select or create the most appropriate scale. You can create a new score-scale or view/edit an existing one in the table below or by clicking on the button "Add New/Edit Rating Scale" at the bottom of the list of rating scales to choose from. In this popup you must maintain the scores as a code, description, color (for cell shading or color banding) and as a score (being consistent between cost, schedule, performance and overall impact)
7. The checkbox at the top called "Severity score" or "Consider overall severity in weighted cost impact" is important. It changes how the risk's weighted impact is calculated, multiplying cost by probability by overall severity score if checked vs. simply cost times probability if not checked. There is also a checkbox to indicate whether users can manually overrule the overall impact computed for risks under this policy.

The best way to view and edit the rating scale scores for an impact or probability is to simply select or highlight it. The table below shows the specific scales for that one selected row, cost impact in our example.

1. The scores for the highlighted row (cost impact in this example) are displayed. Highlight another row to see their scores
2. Each impact has a "code" as well as a description, since the description can be translated into multiple languages. It is normally recommended to make the code and description the same or the code a simple abbreviation of the description
3. In the case of cost or schedule impact you must edit the min/max values for each score, being careful to ensure max for a row is the same as the minimum for the next row, and vice-versa. The min/max values are the monetary user inputs for cost impact, or the numbers of days input for schedule impacts
   • For example in our case the cost impact is "Minimal" if the cost impact is less than $50,000; "Minor" if the cost impact is from $50-$100,000 and "Moderate" is the cost impact is up to $250,000, and so on
   • Note: the cost impact min/max amounts are without currency, since the currency the cost impact is maintained in is assumed. If you maintain risks in different currencies it might be helpful to have several risk policies each one with min/max values in the cost impact score maintained with the expectation of impacts in that specific currency
4. Maintain a score for each rating, in our example "Minimal" has a score of 10, "Minor" a score of 30 and "Moderate" a score of 50. There is no absolute rule for scaling but a 0-100 % scale is recommended. These scores are an effective way to normalize the difference scales for example a cost impact of $250,000 to $500,000 has a score of 70%, might have the same score as a schedule impact of 320-600 days (1-2 years) also which is 70%
   • Note: it is important to make the scores consistent between the cost, schedule and performance impact scales, and to use the same scores for the overall impact scale. This is because the overall impact score is automatically set to the higher of cost, schedule or performance impact scores
   • Scores are also important in the probability scale as they are used to compute the heat-map band, explained below.

The last section of this set-up screen is the definition of the risk-policy heat-map, as shown in the screen shot below.

The heat-map comprises a series of colored "bands" where each band represents a combination of probability and severity or overall impact, based on the risk's weighted cost impact calculation. The min and max score for each colored "band" is the result of multiplying the probability score (from the rating scale scores for probability, above) times the overall impact score.

For example if the overall score is 10% and the probability score is 30% then the heat-map score is 10% of 30%, or 3%. Likewise an overall score of 30% and a probability of 10% also yields a heat-map score of 3%. Both options fall into the "minimal" or dark green band since it is less than the max-score of 4% of this band. Overall severity of 10% times probability of 10% (result: 1%) is also less than 4% so it too falls into the same band.

Note: while cost impact amounts and probability %'s are used to calculate weighted cost impact, the overall impact and probability scores are used to plot the risk in its heat-map. This way different cost and probability scales can be aligned.

As you define heat-map bands bear in mind that:

1. Each band needs to have a code as well as a description. While not shown in the application it is stored in the database and used in reporting. It is recommended to use "color names" as band descriptions and codes
2. Each band needs to have its specific color code, using html color coding conventions. Since counters and text are displayed in black font on top of the shaded cell it is strongly recommended to always stick to lighter toned colors and avoid dark colors where the text on top will be hard to read
3. The min and max score for each heat-map band is critical in order to plot or assign each risk to the correct heat-map based on the combination of overall impact score and the probability score. Check out the example immediately above for more info
4. As well as defining each band, a view-only heat-map chart is displayed below the list of bands where you can see the same heat-map as you see in RISK tab of proposal, project or estimate, or in the ASSESSMENT tab of each risk
5. This chart is organized by ascending probability as rows and ascending overall impact as columns with the heat-map band colors in each cell or combination. For example you can see the three dark green cells where probability and overall impact are both equal to or less than 30% and at least one of them is 10%, resulting in a heat-map of less than 4% or "minimal" band.