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Friday, January 4, 2013

Section Summary – Qualitative Risk Analysis

In the previous few chapters in this section, we took a detailed look at what qualitative risk analysis is, the inputs that are required to perform this analysis and the tools & techniques that we will be using during this analysis. Let us now quickly summarize what we have learnt in this section so far:

• The purpose of qualitative risk analysis 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.
• There are 4 inputs to this process:
o Risk Register
o Risk Management Plan
o Project Scope Statement &
o Organizational Process Assets
• There are a total of 6 tools & techniques that we learnt in this section. They are:

1. Risk Probability & Impact Assessment
2. Probability & Impact Matrix
3. Risk Data Quality Assessment
4. Risk Categorization
5. Risk Urgency Assessment
6. Expert Judgment
• Risk Probability & Impact Assessment provides us with the initial risk rating for each of the risks that we have identified so far. To arrive at this risk rating, we will be using the definition of risk probability and impact that we defined when the Risk Management Plan was created
• The Risk Probability & Impact Matrix is used to assign a risk score to our risk and categorize it as “High-Medium-Low” priority
• Risk Data quality Assessment focuses on making sure that the information we are using to perform the risk analysis activities is unbiased and credible. This is because; conducting risk analysis using poor quality data may result in results that are useless. Frankly speaking, if we cannot trust our data or information, how can we trust the findings that were made based on that data or information?
• The idea of Risk Categorization is to uncover areas of risk concentration so that we can create effective responses to handle them. This is because; dealing with sources of risks is easier and cost effective than dealing with each risk individually. In fact, it can have a greater level of effectiveness as well
• The purpose of this risk urgency assessment technique is to identify near term risks. We are trying to determine which risks are to be considered urgent. In other words, we are trying to identify those risks that require our immediate attention
• Expert Judgment refers to the decisions or suggestions given by knowledgeable experts during the various activities in qualitative risk analysis. The individuals who provide us with their expert judgment are called as “Experts”

By now you should have a very good idea and understanding of the Qualitative Risk Analysis process. To wrap up this section you need to:
• Remember what tools are used in this process
• Remember what each tool does and produces
• Understand that not all tools are used in each process

Are you wondering that I haven’t touched upon the topic of what is the output of this whole Qualitative Risk Analysis process? If you did then you deserve a big pat on the back. Every process creates some sort of output and our Qualitative risk analysis is no different. But, I haven’t covered it in this section because; the whole of the next section is going to be dedicated just to cover that.

If you did not think about the output of this process, no worries. Just brush up your PMBOK basics and re-read some of the initial chapters to refresh your memory and you will be on your way to being a Risk Management Professional.

Prev: Expert Judgment

Next: Updates to Risk Register after Qualitative Analysis

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