A risk breakdown structure is a hierarchical chart that breaks down project risks starting with higher-level categories and continuing down into sub-levels of risk.

Risk breakdown structure provides a framework for categorizing and ranking the risks associated with any given project, making it easier for PMs to effectively plan for and mitigate the impacts of those risks.

The point of the risk breakdown structure is help project managers to brainstorm and document a project’s risk exposure everything that might affect the proper progression of a project. This planning tool can help a company or project team be better prepared for the likeliest to the unlikeliest of risks, so the project deliverables will be close to the original expectations as possible.

RBS is the written documentation of all risks in an organized manner. There are different levels in RBS such as Level 0, 1, 2, 3, and 4. A Project manager can create an RBS from level 2 up to level 4 based on the requirement. Just like WBS, RBS gives a medium to the risk manager and project manager to organize the risks that are needed to be addressed and tracked.

A risk breakdown structure can help give a more complete and ordered view of the risks involved with a given project, while helping PMs more appropriately assign resources and plan for the positive or negative impacts of identified risks.

Benefits of using Risk Breakdown Structure (RBS):

• Leads to the discovery of New Risks: When a project manager would show such representation of the risks to the project team, it is possible that they may also come up with the risks that they see in the project. In this manner, it would be helpful in the discovery of potential risks in the project.
• Categorizes the Project Risks: Risk Breakdown Structure plays an important role in listing risks by levels to recognize risk dependencies. By categorizing, it becomes simple to find out the risk dependencies.
• Easier to Understand: A breakdown structure representation of the risks makes it easier to understand and also makes further detailing of the risks much easier.