PERFORM QUALITATIVE

RISK ANALYSIS
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Purpose and Objectives
� The Perform Qualitative Risk Analysis process assesses and
evaluates characteristics of individually identified project
risks and prioritizes risks based on agreed-upon
characteristics.

� One step in the analysis is to categorize risks according to

their sources or causes. If several risks arise from a common
source, sometimes called a root cause, risk responses may
be more effective when they focus on addressing this root
cause.
Purpose and Objectives
�Identification of the areas of greatest risk exposure
(e.g. to the project completion date, the budget, or a
particular deliverable’s scope)

�Risks that are assessed as high priority to either

threaten or to enhance the achievement of project
objectives will be an important focus in the Plan Risk
Responses process.
Critical Success Factors

A2.. . AD.. HQ INFO.. ITERATIVE

Use Agreed-Upon Approach
� The process is based on an agreed-upon approach to this
assessment that is applied across all of the identified risks in
any project.

� By the nature of project risk, all risks may be assessed

according to probability of occurrence and impact on
individual objectives should the risk occur.

� Other factors may be considered in determining the

importance of a risk can be
Use Agreed-Upon Definations
�The risk assessment should be based on agreed-upon
definitions of important terms, and those definitions
should be used consistently when assessing each risk.

�The use of definitions, for example, of levels of

probability and of impact on objectives, assists the
providers of the information in giving realistic
assessments for each risk, and facilitates the
communication of the results to management and other
stakeholders.
Collect High-Quality Information about
Risks
� Collection of high-quality information about risks is
required. Often this information is not available in any
historic database and should be gathered by interviews,
workshops, and other means using expert judgment.

� Data gathered from individuals may be subject to reporting

or intentional bias. When this occurs, the bias should be
identified and remedied where possible, or a different,
unbiased source of information should be found and used.
Perform Iterative Qualitative Risk
Analysis
� The success of qualitative risk analysis is enhanced if the
process is used periodically throughout the project.

� It is impossible to know in advance all the risks that may

occur in a project, therefore the Identify Risks and Perform
Qualitative Analysis processes should be repeated
periodically for individual risks.

� The frequency of this effort will be planned in the Plan Risk

Management process, but may also depend on events within
the project itself.
 QUALITATIVE RISK ANALYSIS

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category. Data represent. Meeting
PERFORM QUALITATIVE RISK
ANALYSIS: INPUTS
� PROJECT MANAGEMENT PLAN

� Roles and responsibilities for conducting risk management

� Budgets for risk management
� Schedule activities for risk management
� Risk categories (often defined in a risk breakdown structure)
� Definitions of probability and impact, the probability and impact matrix
� Stakeholders’ risk thresholds.

� These inputs are usually tailored to the project during the Plan Risk
Management process. If they are not available, they may be developed during
the Perform Qualitative Risk Analysis process and presented to the project
sponsor for approval before use.
PERFORM QUALITATIVE RISK
ANALYSIS: INPUTS
�PROJECT DOCUMENTS

�Assumption log

�The assumption log is used for identifying, managing,

and monitoring key assumptions and constraints that
may affect the project. These may inform the
assessment of the priority of individual project risks
PERFORM QUALITATIVE RISK
ANALYSIS: INPUTS
� PROJECT DOCUMENTS

� Risk register.

� The risk register contains details of each identified

individual project risk that will be assessed during the
Perform Qualitative Risk Analysis process

� Stakeholder register.

� This includes details of project stakeholders who may be

nominated as risk owners.
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and
TECHNIQUES
� EXPERT JUDGEMENT

� Expertise should be considered from individuals or groups

with specialized knowledge or training in the following
topics:

� Previous similar projects, and

� Qualitative risk analysis.

� Expert judgment is often obtained through facilitated risk

workshops or interviews. The possibility of expert views
being biased should be taken into account in this
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� DATA GATHERING

� Data-gathering techniques that can be used for this process

include but are not limited to interviews. Structured or semi-
structured interviews can be used to assess the probability
and impacts of individual project risks, as well as other
factors.

� The interviewer should promote an environment of trust and

confidentiality in the interview setting to encourage honest
and unbiased assessments
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
�DATA ANALYSIS

�Risk data quality assessment

�completeness, objectivity, relevancy, and timeliness.

C. O. R. T

�A weighted average of selected data quality

characteristics can then be generated to give an overall
quality score.
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� DATA ANALYSIS

� Risk probability and impact assessment. Risk probability assessment

considers the likelihood that a specific risk will occur. Risk impact
assessment considers the potential effect on one or more project
objectives such as schedule, cost, quality, or performance.

� Difference in opinion with regard to probability or Impact

� Watch List

� Assumptions testing
Risk Probability and Impact Matrix
 Risk Probability and Impact Matrix
This red and green means high and low priority
risk..
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
�Assumption Testing

Assumption Stability (1 to 10) Consequence if False (1

to 10)
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daily work.
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
�Assessment of other risk parameters.

�The project team may consider other characteristics of

risk (in addition to probability and impact) when
prioritizing individual project risks for further analysis
and action.

�These characteristics may include but are not limited

to:
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� Urgency. The period of time within which a response to the risk
is to be implemented in order to be effective. A short period
indicates high urgency.

�Proximity(closeness) . The period of time before the risk might

have an impact on one or more project objectives. A short period
indicates high proximity.

�Dormancy. The period of time that may elapse after a risk has
occurred before its impact is discovered. A short period indicates
low dormancy.

Urgent. Proxy..Dorm.. Manager. . Controls..Detects.. Connects..

Strategy..Properly
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� Manageability. The ease with which the risk owner (or owning
organization) can manage the occurrence or impact of a risk.
Where management is easy, manageability is high.

� Controllability. The degree to which the risk owner (or owning

organization) is able to control the risk’s outcome. Where the
outcome can be easily controlled, controllability is high.

� Detectability. The ease with which the results of the risk

occurring, or being about to occur, can be detected and
recognized. Where the risk occurrence can be detected easily,
detectability is high

Urgent. Proxy..Dorm.. Manager. . Controls..Detects.. Connects..

Strategize..Properly
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� Connectivity. The extent to which the risk is related to other
individual project risks. Where a risk is connected to many other
risks, connectivity is high.

� Strategic impact. The potential for the risk to have a positive or

negative effect on the organization’s strategic goals. Where the
risk has a major effect on strategic goals, strategic impact is high.

� Propinquity. The degree to which a risk is perceived to matter

by one or more stakeholders. Where a risk is perceived as very
significant, propinquity is high.

Urgent. Proxy..Dorm.. Manager. . Controls..Detects.. Connects..

Strategy..Properly
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� INTERPERSONAL AND TEAM SKILLS

� Facilitation improves the effectiveness of the qualitative

analysis of individual project risks.

� RISK CATEGORIZATION

� Grouping risks into categories can lead to the development

of more effective risk responses by focusing attention and
effort on the areas of highest risk exposure, or by
developing generic risk responses to address groups of
related risks.
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� Data Presentation Techniques
1. Pindi matrix
� Probability and impact matrix 2. 2. Hierarchical charts

� An organization can assess a risk separately for each objective

(e.g., cost, time, and scope) by having a separate probability and
impact matrix for each

� Hierarchical charts.

� Where risks have been categorized using more than two

parameters, the probability and impact matrix cannot be used and
other graphical representations are required
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
�Hierarchical charts.
PERFORM QUALITATIVE RISK
ANALYSIS: TOOLS and TECHNIQUES
� MEETINGS

� To undertake qualitative risk analysis, the project team may conduct a

specialized meeting (often called a risk workshop) dedicated to the discussion
of identified individual project risks.

� The goals of this meeting include the review of previously identified risks,
assessment of probability and impacts (and possibly other risk parameters),
categorization, and prioritization.

� A risk owner, who will be responsible for planning an appropriate risk response
and for reporting progress on managing the risk, will be allocated to each
individual project risk as part of the Perform Qualitative Risk Analysis process.
PERFORM QUALITATIVE RISK ANALYSIS:
OUTPUTS
� PROJECT DOCUMENTS UPDATES

� Risk register.

� The risk register is updated with new information generated

during the Perform Qualitative Risk Analysis process.
Updates to the risk register may include assessments of
probability and impacts for each individual project risk, its
priority level or risk score, the nominated risk owner, risk
urgency information or risk categorization, and a watch list
for low-priority risks or risks requiring further analysis
PERFORM QUALITATIVE RISK ANALYSIS:
OUTPUTS

�PROJECT DOCUMENTS UPDATES

�Risk report.

�The risk report is updated to reflect the most important

individual project risks (usually those with the highest
probability and impact), as well as a prioritized list of
all identified risks on the project and a summary
conclusion.
PERFORM QUALITATIVE RISK ANALYSIS:
OUTPUTS

�PROJECT DOCUMENTS UPDATES

�Assumption log.

�During the Perform Qualitative Risk Analysis process,

new assumptions may be made, new constraints may
be identified, and existing assumptions or constraints
may be revisited and changed. The assumption log
should be updated with this new information
PERFORM QUALITATIVE RISK ANALYSIS:
OUTPUTS

�PROJECT DOCUMENTS UPDATES

�Issue log.

�The issue log should be updated to capture any new

issues uncovered or changes in currently logged issues.