logical sequence of systematically
executed events. Developing a procurement risk analysis is
"Once we've identified the risk, then we assign a level to that
risk," Lindstrom explains. "You can use 1 through 10, ABC, or
any other ranking system."
The final piece of the procurement risk analysis is the plan.
"The risk plan includes the steps necessary to avoid the risk or
mitigate the fallout from the risk if it does happen," she says.
"By knowing the risks, understanding how likely each one is to
occur, and having a plan in place to deal with it, we're able to
successfully complete projects."
Using a risk plan can help a procurement department
demonstrate its value to the organization. "Most internal
understand why procurement needs to follow all the steps
that are laid out by the company. And they don't care,"
"So, using a
risk plan becomes an educational tool. It teaches
folks what happens if the procurement steps are
It shows them in black and white what can happen -
the risk - and how procurement professionals deal
with it - the plan. It shows them that procurement
wants to help them do business in a less risky
So, in summary, identify risks, assign levels to those risks,
determine the steps to avoid or mitigate the risks, and share
the plan with stakeholders.