Qualitative risk analysis
Qualitative risk analysis is a project management technique concerned with discovering the probability of a risk event occurring and the impact the risk will have if it does occur. All risks have both probability and impact. Probability is the likelihood that a risk event will occur, and impact is the significance of the consequences of the risk event. Impact typically affects the following project elements: schedule, budget, resources, deliverables, costs, quality, scope, performance.
There are several techniques when performing qualitative risk analysis to determine the probability and impact of risks, including the following:
- Brainstorming, interviewing, Delphi technique
- Historical data
- Strength, weakness, opportunity, and threats analysis (SWOT analysis)
- Risk rating scales
Developing rating scales
Assigning probability and impacts to risks is a subjective exercise. Some of the subjectivity can be eliminated by developing rating scales that are agreed upon by the sponsor, project manager, and key team members. Some organizations, particularly those that have project management offices responsible for overseeing all projects, have scales already developed.
- Kim Heldman, PMP, Project Manager's Spotlight on Risk Management,p125,126