What is risk in SAP (PPM-PFM - Portfolio Management)?

SAP Term: risk

• Component: PPM-PFM

• Component Name: Portfolio Management

• Description: Refers to the risk of a portfolio item. The formula for calculating the risk is the average of: [1- pts + 1 - pcs] where pts = probability of technical success and pcs = probability of commercial success &EXAMPLE& If pts = 80% and pcs = 50% Risk = [1 - 80% + 1 - 50%] / 2 Risk = 35%

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• Key Concepts: 
  Risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives. In SAP Portfolio and Project Management (PPM-PFM), risk management is the process of identifying, analyzing, and responding to project risks. It is an important part of project management and helps to ensure that projects are completed on time and within budget.
  
  How to use it: 
  In SAP PPM-PFM, risk management involves identifying potential risks, assessing their impact on the project, and developing strategies to mitigate or eliminate them. Risk identification should be done early in the project planning process and should include both internal and external risks. Risk assessment involves analyzing the probability of a risk occurring and its potential impact on the project. Finally, risk response strategies should be developed to address each identified risk.
  
  Tips & Tricks: 
  When identifying risks, it is important to consider both positive and negative risks. Positive risks can be used to the project’s advantage while negative risks should be addressed as soon as possible. Additionally, it is important to regularly review and update the risk management plan throughout the project’s life cycle.
  
  Related Information: 
  For more information on risk management in SAP PPM-PFM, please refer to the official SAP documentation at https://help.sap.com/viewer/product/SAP_PORTFOLIO_AND_PROJECT_MANAGEMENT/7.5/en-US