Risk Analisys

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What Is Risk Analysis?
Risk analysis is the process that determines how likely it is that risk will arise in a project. It studies the uncertainty of potential risks and how they would impact the project in terms of schedule, quality and costs if, in fact, they were to show up. Two ways to analyze risk are quantitative and qualitative. But it’s important to know that risk analysis is not an exact science, so it’s important to track risks throughout the project life cycle.

There are many project risks that can affect your project and, as a project manager, you’re responsible for the risk analysis process. Risk analysis, or risk assessment is essential because it allows project managers to classify project risks and determine which of them should be tracked closely.
What Is Project Risk Analysis?
Risk analysis consists of using tools and techniques to determine the likelihood and impact of project risks that have been previously identified. Therefore, risk analysis helps project managers decipher the uncertainty of potential risks and how they would impact the project in terms of schedule, quality and costs if, in fact, they were to show up. Risk analysis isn’t exclusive to project management and it’s used in other disciplines such as business administration, construction or manufacturing.
How to Analyze Project Risks
At a basic level, there are three things you should consider when assessing project risks: risk probability, risk impact and risk exposure. These three things can be estimated through qualitative and quantitative risk analysis.
Risk Probability
All risks have a certain probability of occurrence, which means they might or might not happen. Estimating risk probability isn’t an exact science, but there are several techniques you can use, such as examining data from past projects. By analyzing similar projects from the past, you can better determine whether there’s a high or low chance of project risk.
Risk Impact
Risk Exposure
What Is Qualitative Risk Analysis?
Qualitative risk analysis refers to the risk analysis tools and techniques that rely on expert subject matter opinions, subjective and non-statistical means to assess the likelihood and impact of project risks. A risk matrix is a typical example of a qualitative risk analysis tool.
What Is Quantitative Risk Analysis?
By contrast, quantitative risk analysis is a statistical analysis of project risks. While it takes longer than qualitative analysis, quantitative risk analysis tends to be more accurate as it relies on data. Some examples of quantitative risk analysis tools are linear regression models or the Monte Carlo simulation, both statistical techniques that simulate scenarios and their different outcomes so that managers can better understand how risk can affect their business or project. Let’s take a closer look at some risk analysis tools and techniques you can use.