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KPIs and EMV in Risk Management

Key Performance Indicators (KPIs) are essential for tracking the success of risk management in infrastructure projects, including metrics such as Cost Variance and Schedule Performance Index. Expected Monetary Value (EMV) is a quantitative tool used to assess potential financial outcomes of risks, aiding in prioritization and decision-making. The absence of EMV analysis in the Telef Project hampers accurate cost-related risk planning.

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17 views1 page

KPIs and EMV in Risk Management

Key Performance Indicators (KPIs) are essential for tracking the success of risk management in infrastructure projects, including metrics such as Cost Variance and Schedule Performance Index. Expected Monetary Value (EMV) is a quantitative tool used to assess potential financial outcomes of risks, aiding in prioritization and decision-making. The absence of EMV analysis in the Telef Project hampers accurate cost-related risk planning.

Uploaded by

mikiyasdessie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Key Performance Indicators (KPIs) in Risk Monitoring

 KPIs are measurable values used to track and evaluate the success
of risk management over time.

Common KPIs for Infrastructure Projects:

 🔸 Cost Variance (CV): Measures deviation from the planned budget.

 🔸 Schedule Performance Index (SPI): Tracks how well the project is


sticking to its timeline.

 🔸 Risk Mitigation Progress: Percentage of identified risks with


implemented responses.

 🔸 Number of Open Risks: Total risks still unresolved.

 🔸 Frequency of Risk Review Meetings: Ensures continuous risk


oversight.

 🔸 Change Request Trends: Indicates scope instability or


unanticipated issues.

Why it matters: Without KPIs, risk monitoring becomes reactive rather than
proactive, making it harder to manage emerging threats effectively.

Expected Monetary Value (EMV) in Risk Management

 EMV is a quantitative risk analysis tool used to calculate the


average expected outcome of uncertain future events by
considering their probability and impact.

Formula:

EMV = Probability × Impact (Cost or Benefit)

Example:

If there's a 30% chance of a risk causing a $10,000 loss:


EMV = 0.3 × (-10,000) = -$3,000

 Helps in prioritizing risks and making informed decisions by


estimating potential financial exposure.

 Telef Project lacks this analysis, reducing the accuracy of cost-related


risk planning.

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