Determining Value and Risk Ratings

Lifecycle entities (proposals/projects/assets) can be evaluated and ranked by numerical values of cost, resource requirement, and benefit. They can also be evaluated and ranked by Risk Rating, Value Rating, and Total Score.

• Risk Rating

  Risk Rating is a numerical value that helps evaluate the risk of a lifecycle entity. It depends on the selection for each field in the Risk Ratings section of the lifecycle entity. Each field (served as criterion) has a weight associated; each drop-down text of a field has a numerical value associated.

  Risk Rating = Sum (Weight for each field * Numerical value for each drop-down text)

• Value Rating

  Value Rating is a numerical value that helps evaluate the business value of a lifecycle entity. It depends on the selection of each field in the Value Ratings section of the lifecycle entity. Each field (served as criterion) has a weight associated; each drop-down text of a field has a numerical value associated.

  Value Rating = Sum (Weight for each field * Numerical value for each drop-down text)

• Total Score

  Total Score = Value Rating - Risk Rating + Score Adjustment

  where Score Adjustment is a field provided with each lifecycle entity to allow automatic adjustment of Risk Rating and Value Rating.

  Example: A confident project sponsor might enter 10 in the Score Adjustment field, raising the Total Score by 10 points. Someone who thinks the project is riskier than the calculations indicate might enter -5, lowering the Total Score by 5 points.

For information about changing or adding scoring criteria and their values, see the Portfolio Management Configuration Guide.