Exploring the What-If Scenario Simulation

The risk management team has the option of defining scenarios to describe plausible risks and the impacts. The following are the four scenario case processes possible in SAP Risk Management.

A scenario helps the risk team to address complex risk conditions and options. The risk team can create different cross-organizational scenarios and analyze them. A scenario is a story used to describe plausible future risks and associated negative (or positive) impacts. It provides a basis for communicating complex risk conditions and options. A scenario is an event that links risks in a logical way, and then shows the effect of changes on these events. With SAP Risk Management, you can create different scenarios and analyze them individually.

This lesson breaks down a scenario case based on the four processes in the preceding graphic.

For more information on how to perform Scenario Management, visit the SAP Help Portal: Scenario Management | SAP Help Portal

1) In the Component tab, enter the following:

• Name: Short name of the case.
• Description: Description of the scenario.
• Cause: The drivers behind the scenario.
• Rational for Likelihood: Why you believe the scenario could materialize.
• Likelihood: The likelihood that the scenario could occur.
• Currency: Used for analysis of the scenario.

In the Risks table at the bottom of the window, you can assign the primary risk events that can occur in the scenario. The system automatically retrieves all related influence factors (which you can delete if you do not want them in the scenario). To assign risks to the scenario, follow these steps:

1. Choose Assign. This opens a popup window where you can select the risks that are to be assigned to the scenario.
2. Optional: Select the Organization Unit, Activity, Risk Category, and/or risk Name.
3. Choose Go.
4. Select the risks and choose OK.
5. Choose Save.

1) Enter the following values for the scenario:

• Overall Change on Probability: Enter a percentage for the overall change in probability of the risks occurring under the scenario.
• Overall Change on Impact: Enter a percentage for the overall change in the risk impacts under the scenario.
• Overall Benefit from Scenario: If applicable, enter the estimated benefit in monetary terms that result under the scenario.

2) Choose Apply Overall Changes to apply the preceding assumptions for the scenario. This applies the assumptions to the risks linked to the scenario. Choose Reset to reset the values.

3) Choose Save to save the assumptions.

You can Create or Assign risk response and simulate the probability and impact reduction. This can help for Risk evaluation by considering the Risk Appetite boundary and lands at decision-making.

Results are displayed in the form of Total Impact and Expected Impact (Probability) category with the following four indications:

1. Without adjustment: Initial Impact value before adjustment applied.
2. With adjustment: Impact value after adjustment applied.
3. Without adjustment including Response: Initial Impact value after Response reduction.
4. With adjustment including Response: Adjusted impact value after Response reduction.