Qualitative Risk Analysis

(OBJ 5.2)

Qualitative Risk Analysis

• Primary method in risk management
• Assesses risks based on potential impact and likelihood of the occurrence
• Categorizes risks as high, medium, or low
• Subjective and relies on expertise and experience of the project team and stakeholders
• Avoids quantitative complexity

Key Components

• Likelihood/Probability

  • Chance of risk occurrence
  • Qualitatively expressed as low, medium, or high
  • Determined based on past experience, statistical analysis, or expert judgment

• Impact

  • Potential consequences if risk occurs
  • Qualitatively rated as low, medium, or high
  • Assess damage to project or business objectives
  • Impact Levels
    • Low Impact
      • Minor damage, essential functions operational
    • Medium Impact
      • A significant damage or loss to assets
    • High Impact
      • Major damage, essential functions impaired

• The project manager, using Qualitative Risk Analysis, might prioritize this risk and develop mitigation strategies based on their potential impact and the likelihood of their occurrence.