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Questions and Answers
What does RRL stand for and what does it help you evaluate?
What does RRL stand for and what does it help you evaluate?
Risk Reduction Leverage; effectiveness of potential risk mitigation strategies
How is RRL calculated?
How is RRL calculated?
RRL = REbefore - REafter / C
What does an RRL greater than 1 suggest?
What does an RRL greater than 1 suggest?
Risk mitigation strategy is worthwhile
What does an RRL of less than 1 imply?
What does an RRL of less than 1 imply?
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In the example given, what is the probability of a security breach before mitigation?
In the example given, what is the probability of a security breach before mitigation?
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How much would it cost the project to implement the additional firewalls in the example?
How much would it cost the project to implement the additional firewalls in the example?
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Study Notes
Risk Reduction Leverage (RRL)
- RRL is a metric that evaluates the effectiveness of risk mitigation strategies by comparing the reduction in risk exposure to the cost of implementing a mitigation or risk reduction countermeasure.
- RRL is calculated as: RRL = REbefore - REafter / C
- REbefore is the risk exposure before (or without) mitigation.
- REafter is the risk exposure after (or with) mitigation.
- C is the cost of mitigation, which must be in the same units as the RE.
Interpreting RRL
- An RRL greater than 1 indicates that the risk mitigation strategy is worthwhile, as the risk exposure reduction is more than the cost of mitigation.
- An RRL of less than 1 suggests that the risk reduction might not justify the cost of mitigation.
Example of Risk Reduction Leverage
- A 20% chance (probability of occurrence) of a security breach in software could result in a R1 million loss (potential impact).
- Implementing additional firewalls could reduce the probability of occurrence to 10%.
- The cost of implementing firewalls is R50,000.
- The RRL metric helps evaluate whether the risk reduction justifies the cost of mitigation in this scenario.
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Description
Learn how to calculate Risk Reduction Leverage (RRL) to evaluate the effectiveness of potential risk mitigation strategies. Understand the formula RRL = (REbefore - REafter) / C and how it helps in measuring the reduction in risk exposure relative to the cost of implementation.
