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Friday, July 6, 2012

Influence Diagrams

In the previous chapters we took a look at Cause and Effect diagrams as well as Flowcharts. In this chapter we are going to cover the third diagramming method which is “Influence Diagrams”

Influence diagrams are diagrams that show potential influences that elements or situations in our project can have on one another. An influence diagram can show:
a. Causal influences
b. Time ordering of events &
c. Other relationships among variables and outcomes

Within our existing project decisions, we can determine where uncertainties exist based on the potential scenarios. You can compare these influence diagrams to a decision tree but they are slightly different. Using influence diagrams we can look at a situation and how a decision can be arrived. It can be used to identify the uncertainty in the potential paths as well as to identify potential risks.

Look at the image below which is a sample influence diagram

There are multiple boxes with arrows going from-to one another. An arrow starting at Economy and ending at Education signifies the fact that economy has an impact on education. So, more number of arrows arriving at a box means that it is impacted/influenced by many factors. Similarly, more number of arrows starting from a box means that it impacts/influences many factors.

If there is a problem in the Economy it can impact almost every aspect in this influence diagram. So, a hiccup in the economy may cause uncertainties in every aspect of this situation which is a potential risk which we can identify based on this diagram.

An important point here is that, the example above is just a general one and does not deal with any specific project or its risk. The influence diagrams we may end up creating/using for our project will all be concerned with risk management only. After all, that is the whole purpose of this RMP certification isn’t it?

To Summarize – Influence Diagrams:

• Are diagrams that show potential influences that elements or situations can have on one another
• Reflect relationships among variables and their outcomes
• Can be used to view the order of potential events
• Help to spot uncertainty and therefore potential risks
• Are used to make decisions

Prev: Flowcharts

Next: SWOT Analysis

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