Tornado Diagram

Tornado diagrams can be helpful when evaluating risk in a project, as it provides an overall view of the different components that can cause variation and uncertainty in the outcome.

In fact, the tornado diagram was created specifically to aid risk analysis efforts by presenting each element of the quantitative risk analysis model that can influence the project outcome in simple graphic form. In this article, we will discuss what exactly tornado diagrams are and how they are used in projects. The diagram is useful for sensitive analysis by evaluating the relative significance of variables. It is so named by experts because the final chart appears like one-half of a full tornado or full tornado.

What is a Tornado diagram?

Tornado diagrams represent a sensitivity display of quantitative risk analysis models that presents not only which risk factors have an effect on the project, but also the magnitude of the effect. It provides a useful tool for deciding how to control risks. 

The tornado diagram, a representation of different risks associated with a project, helps us identify those risks that have no effect on the project's objective. Additionally, countermeasures and contingency plans can be created to address risks correlated with those factors by identifying what parts of our projects to focus on and mitigating these risks by adding pertinent action plans. 

This graphic displays an overview of the risk assessment process and the correlating action plans, such as dividing and distributing tasks. To be effective, a tornado diagram should list all potential factors for project failure. If any item that could impact the project's chances of success is left off your list, you'll have missed an opportunity to better your odds of success.

Tornado Diagrams are generally used for sensitivity analysis in the following performance domains;

Why should you use them?

With it, you're able to see what matters and what doesn't. You can examine the complete project risks, as well as the corresponding analysis. Instead of having to pore over a lengthy list of numbers, with sensitivity analysis you can get a clear understanding of the factors that most significantly affect your project's outcome and how they interact with each other (e.g., cost and time). 

The shape of the tornado diagram usually produces an identifiable pattern, making it possible for you to quickly identify bright spots or risk management priorities that should be considered in order to attain better outcomes than anticipated. 

Tornado diagrams are great because they combine your major driving factors on a single graph instead of having to sort through pages of documentation. 

If you want to create a tornado diagram:

  • Define and assign values to your risk variables. 
  • Decide whether the values are correlated with each other and pick one from each correlated pair or set. From these, calculate the corresponding y-axis values. 
  • Plot your points by entering these y-axis values and completing the visualization process with dedicated risk software. 
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