11.1 Risk Management Planning | 11.2 Risk Identification | 11.3 Qualitative Risk Analysis | 11.4 Quantitative Risk Analysis | 11.5 Risk Response Planning | 11.6 Risk Monitoring and Control |
Integration | Scope | Time | Cost | Quality | Resource | Communications | Risk | Procurement |
Qualitative risk analysis is the process of assessing the impact and
likelihood of identified risks. This process prioritizes risk according to their potential effect
on project objectives. Qualitative risk analysis is one way to determine the importance of
addressing specific risks and guiding risk responses. The time-criticality of risk-related
actions may magnify the importance of a risk. An evaluation of the quality of the available
information also helps modify the assessment of the risk. Qualitative risk analysis requires that
the probability and consequences of the risks be evaluated using established qualitative-analysis
methods and tools. Trends in the results when qualitative analysis is repeated can indicate the
need for more or less risk-management action. Use of these tools helps correct biases that are
often present in a project plan. Qualitative risk analysis should be revisited during the
project´s life cycle to stay current with changes in the projects risks. This process can lead to
further analysis in
quantitative risk analysis (11.4)
or directly to
risk response planning (11.5).
11.3.1 Inputs to Qualitative Risk Analysis .1 Risk management plan. This plan is described in 11.1.3. .2 Identified risks. Risks discovered during the risk identification process are evaluated along with their potential impacts on the project. .3 Project status. The uncertainty of a risk often depends on the project´s progress through its life cycle. Early in the project, many risks have not surfaced, the design for the project in immature, and changes can occur, making it likely that more risks will be discovered. .4 Project type. Projects of a common or recurrent type tend to have better understood probability of occurrence of risk events and their consequences. Projects using state-of-the-art or first-of-its-kind technology—or highly complex projects—tend to have more uncertainty. .5 Data precision. Precision describes the extent to which a risk is known and understood. It measures the extend of data available, as well as the reliability of data. The source of the data that was used to identify the risk must be evaluated. .6 Scales of probability and impact. These scales, as described in Section 11.3.2.2, are to be used in assessing the two key dimensions of risk, described in Section 11.3.2.1. .7 Assumptions. Assumptions identified during the risk identification process are evaluated as potential risks (see Section 4.1.1.5 and Section 11.2.2.4). 11.3.2 Tools and Techniques for Qualitative Risk Analysis
.1 Risk probability and impact. Risk probability and risk consequences may be described
in quslitative terms such as very high, moderate, low, and very low.
.2 Probability/impact risk rating matrix.. A matrix may be constructed that assigns risk
ratings (very low, low, moderate, high, and very high) to risk or conditions based on combining
probability and impact scales. Risks with high probability and high impact are likely to require
futher analysis, including quantification, and aggressive risk management. The risk rating is
accomplished using a matrix and risk scales for each risk. .3 Project assumptions testing. Identified assumptions must be tested against two criteria: assumption stability and the consequences on the project if the assumption is false. Alternative assumptions that may be true should be identified and their consequences on the project objectives tested in the qualitative risk-analysis process. .4 Data precision ranking. Qualitative risk analysis requires accurate and unbiased data if it is to be helpful to project management. Data precision ranking is a technique to evaluate the degree to which the data about risks is useful for risk management. It involves examining:
Extent of understanding of the risk. The use of data of low precision—for instance, if a risk is not well understood—may lead to a qualitative risk analysis of little use to the project manager. If a ranking of data precision is unacceptable, it may be possible to gather better data. 11.3.3 Outputs from Qualitative Risk Analysis .1 Overall risk ranking for the project. Risk ranking may indicate the overall risk position of a project relative to other projects by comparing the risk scores. It can be used to assign personnel or other resources to projects with different risk rankings, to make a benefit-cost analysis decisison about the project, or to support a recommendation for project initiation, continuation, or cancellation. .2 List of prioritized risks. Risks and conditions can be prioritized by a number of criteria. These include rank (high, moderate, and low) or WBS level. Risks may also be grouped by those that require an immediate response and those that can be handled at a later date. Risks that affect, functionality, and quality may be assessed separately with different ratings. Significant risks should have a description of the basis for the assessed probability and impact. .3 List of risks for additional analysis and management. Risks classified as high or moderate would be prime candidates for more analysis, including quantitative risk analysis, and for risk management action. .4 Trends in qualitative risk analysis results. As the analysis is repeated, a trend of results may become apparent, and can make risk response or further analysis more or less urgent and important.
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