A risk indicator is a tool used in project management to identify potential risks and their associated impacts. It is used to assess the likelihood of a risk occurring, as well as its potential impact on the project. Risk indicators can be used to help prioritize risks and develop strategies for mitigating them.
Risk indicators can be divided into two main categories: quantitative and qualitative. Quantitative risk indicators are based on numerical data, such as cost estimates or time frames. Qualitative risk indicators are based on subjective assessments, such as opinions or expert judgment. Both types of risk indicators can be used to identify potential risks and their associated impacts.
Using risk indicators can help project managers identify potential risks before they become problems. By assessing the likelihood of a risk occurring and its potential impact, project managers can develop strategies for mitigating those risks. This can help reduce the overall cost and timeline of a project, as well as improve its chances of success.