The Qualitative Risk Analysis process is the 3rd process within the Project Risk Management Knowledge Area in the PMBOK Guide. This chapter is just an introduction to this topic. We will be covering this topic in great detail in the subsequent chapters.
We have completed Risk Identification and have created the risk register which contains all the information we know about the risks we have identified so far. At this point the risk register contains only the basic details like what the risk is plus any potential response that you think might be feasible. But, apart from this information the register is empty. So, in this stage, we are going to analyze these identified risks and add as much information as possible about those risks into the risk register.
Purpose of Qualitative Risk Analysis:
The purpose of this process is to prioritize risks in order to determine which risks require additional analysis. This helps the risk management team to focus on the higher priority risks.
The Qualitative Risk Analysis process asks questions like:
a. What is the probability of this risk occurring?
b. What is the impact to the project objectives, if this risk occurs?
c. How much time do we have, to respond to this risk?
d. Where should we spend our effort?
The Qualitative Risk Analysis process uses the definition of Probability & Impact we set in the Risk Management Plan. Also, we will be using the Risk Probability & Impact Matrix. The purpose of using these set values is to reduce bias on how risks are assessed and ensure a consistent analysis of all risks. We covered this in one of our earlier chapters titled “Contents of the Risk Management Plan”. You can revisit that chapter to refresh your memory about risk probability and impact.
At the end of qualitative risk analysis, we may feel the need to further analyze a few of the selected high priority risks. These risks will be further analyzed in the quantitative risk analysis process. The image below summarizes the steps in qualitative risk analysis:
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