Once you know the possible risks that could harm your project, you need to find out which ones you will spend your time and money on.
Risk analysis is the process in which we to prioritize the risks based on the probability of the risk occurring frequency and the impact that it would have on the complete project.
There are two possible methods of risk analysis which can be used on the project…
- Qualitative Risk Analysis
- Quantitative Risk Analysis
The main difference that you encounter between these two methods of risk analysis is that qualitative risk analysis uses a very relative or detailed scale to measure for the probability of occurrence where as a quantitative risk analysis is assessed completely on the basis of numerical scale.
Just for example, a qualitative risk analysis would be measured on a scale of “Low, Medium, High” to refer to the likelihood of a risk events happening.
A quantitative analysis will clear out the probability of each risk event happening. Just for example, Risk number one has an 80% chance of happening, Risk number two has a 27% chances of happening, and so on.
The rest of this article will focus only on using the qualitative analysis to finalize and decide which risks your project should be based on.
Qualitative Risk Assessment
Using your Rating Scales & RAM, you can then understand the likelihood of each possible risk event happening and its impact to identify what Risk Level it is currently at. This will give you the relevant information you need to prioritize your list of all possible project risks.
The qualitative risk assessment will also help you identify if there are any specific types or specific categories of risks that would need some special attention or any risk events that might need to be handled in the upcoming-term.
The toughest aspect of performing a qualitative risk analysis is finding details of your rating values. But once that has been taken care of, one can use them for the complete duration of the project to effectively manage their project’s risks in a very systematic manner.