However, please remember that there are SIX bullet points that need to be addressed. Most of them are self-explanatory, but I will provide an example of bullet points 2-4 for you.
Describe the major issue that occurred. (Whether or not the issue was previously identified as a risk, assume that it was for the purpose of this activity.)
Describe what it would have taken to prevent this risk from occurring, in dollars and time, and compare that to the cost it required, also in dollars and time, of fixing the problem after it occurred.
Analyze the trade-off of the costs required to prevent the risk from turning into an issue, and compare that to the cost of dealing with the issue once it did occur. Describe the results of your analysis, and define the variables and method that you used in making this determination.
Example Below:
Major Issue
My current company had a project that was far behind in its schedule. The project was estimated to take nine months but was now in its third year of implementation. They hired me to "recover" the project so that it could be completed by a compliance deadline, but they were pretty certain they were not going to make that deadline. The issue was that the project team had missed every deadline to date and the current leadership could not understand why and so they could not turn it around.
After being on the job less than one week the cause of the issue was obvious -- there was no leadership commitment to the project. The project team consisted of two people, with one coming from HR and one from IT. Neither had experience with the new system or the technology behind the system.
Cost to Prevent
The cost to prevent this problem would have been to build an appropriately sized project team from the start. By only having two people on the team the project was in a constant state of thrashing and would most likely never be completed. By having the correct sized team from the start, the project could have been completed in nine months instead of taking four years in total. Because we had a hard deadline, we had to add six people to the project team, putting less critical projects on hold, so that we could catch up on the backlog of work, correct the problems, and complete the project before the hard deadline. If we had put five people on the project from the start we believe we could have completed it in under a year. So, instead of spending 5 person years (5 people x 1 year) we spent 14 person years (2 people x 4 years and 6 people x 1 year) to complete the work.
Trade Off Costs
As noted above, the cost to complete the project with improper staffing was nearly three times as high as with a minimal team. Allocating the appropriate resources is difficult to do sometimes, but not doing so frequently results in spending much more money in the long run as well as burning out staff. It is challenging to get leadership to understand the long term costs unless a realistic timeline is built that is based on effort, and not time, and that has resource names assigned to each activity/task so that it becomes apparent that spending the money now is less expensive than dragging out the cost. The variables I would have used are resource hours, work effort, and deadlines to demonstrate that the three variables are tightly coupled and regardless of the amount of "hope" involved, you must consider all three when determining cost and schedules. If the original project team of two people had assigned themselves to each piece of work it would have been obvious that the project would take six to seven years to complete with just the two of them.