Risk Breakdown Structure

A risk breakdown structure (RBS), in form, is much like a work breakdown structure (WBS). Both are organized as hierarchical breakdowns and each contain descending levels with increased detail. Both the WBS and the RBS seek to decompose items to actionable levels.

With the risk breakdown structure, risks are organized according to risk categories. The highest level of the RBS would include the project name. In a construction project, examples of next highest level risks might include: project management, material supply and the weather.

When we further decompose the risk category of project management, we might list: inexperienced project manager and relatively young project management office. Beneath young project management office we might find risks like: lacking in established procedures, little to no documented lessons learned.

The risk breakdown structure can be constructed in several formats. Sometimes they appear in the form of a flow chart and sometimes in the form of an outline or list. The free template below uses an outline or list-style presentation.

The risk breakdown structure is created by the project manager with enormous input from members of the project management team. Like many of the project management documents, it may need revised several times during the life of the project.

Inputs to creating the risk breakdown structure include the project management plan, organizational process assets and enterprise environmental factors.

A risk breakdown structure provides a way to group potential causes of risk. In the example of the construction project above, multiple risks were identified under the category of project management. The RBS is useful in the Identify Risks process because it helps the project team examine the sources from which risk arise.