Chap 11.3 Perform Qualitative Risk Analysis

2. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) 11.3 Perform Qualitative Risk Analysis Perform Qualitative Risk Analysis - Definition What is Qualitative & Quantitative Risk Analysis? Why to do Qualitative Risk Analysis Perform Qualitative Risk Analysis: ITTO What is probability impact matrix? What is Risk score? Review

3. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Project Risk Management Processes Plan Risk management Identify Risk Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Response Implement Risk Monitor Risk P MC P P P P E

4. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) It is a process of prioritizing risks for further analysis by assessing & combining their probability of occurrence & impact. It enables PM to reduce the level of uncertainty and to focus on high-priority risks Perform Qualitative Risk Analysis-> Definition Identified Risks Qualitative Analysis Prioritized Risk Prioritizing Occurrence Impact.

5. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) • Prioritize Risks as High, Medium & Low. • Based on relative probability & likelihood of occurrence. Perform Qualitative Risk Analysis Identify the numerical values in terms of cost, timeline for each Risk. Perform Quantitative Risk Analysis Perform Qualitative Risk Analysis-> Difference

6. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Identify most important Risks. Prioritize Risks. Rapid & cost effective. Help PM to focus resources & energy on priority Risks. Decision to perform qualitative analysis depends on Risk response timeframe. Perform Qualitative Risk Analysis-> Why?

7. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Perform Qualitative Risk Analysis->ITTO Expert Judgment Data Gathering Data analysis Interpersonal and team skills Risk Categorization Data Representation Meetings Project Management Plan Project documents EEF OPA Project document updates Inputs Tools & Techniques Outputs

9. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Project Management Plan Key Elements of RMP Roles & Responsibilities Budget Schedule Activities Risk Category Definition of Probability & Impact Matrix Stakeholder risk appetite Perform Qualitative Risk Analysis->Inputs->PMP -> RMP

10. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Project documents Assumption log Risk Register Stakeholder Register Perform Qualitative Risk Analysis->Inputs-> Project documents

11. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Project documents Risk Register • Contains information that will be used to assess & prioritize the Risks. List of Identified Risk. Description (Source, Category, impact etc) Initial risk response. (If available) Perform Qualitative RA->Inputs->Risk Register Impact I D Risk Statement Probability Scope Quality Schedule Cost Potential Response Potential Owner 1 Continually changing requirements Low Medium Orient new project owner. Project Manager 2 Project involves the use of new technology Medium High High Find replacement programmer. Project Manager 3 External system A is not ready in time to implement feature B. High Low Medium Low Discuss with stakeholders and make adjustments as agreed. Project Manager

12. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Perform Qualitative Risk Analysis->Inputs Industry studies Risk Databases Information about prior similar completed projects. Enterprise environmental factors Enterprise environmental factors

13. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Expert Judgment Data Gathering Data analysis Interpersonal and team skills Risk Categorization Data Representation Meetings Perform Qualitative Risk Analysis->T&T

14. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Expert Judgment Expertize should be considered from groups or individuals with specialized knowledge in the area of Risk management. Senior Management Project Stakeholders PM with similar project experience Subject Matter expert Consultants Professional & technical associates Perform Qualitative RA->T&T-> Expert Judgement Provide inputs on probability & impact of risks Help PM in risk prioritization

15. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Data analysis Risk Data Quality Assessment Risk Probability & Impact Assessment Assessment of other risk parameters Perform Qualitative Risk Analysis->T&T

16. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Data analysis Risk Data Quality Assessment Perform Qualitative Risk Analysis->T&T Evaluate the degree to which the data is useful to Risk Management. Examine the accuracy, Quality, reliability & Integrity of Risk Data. If the Risk data quality is poor, additional data need to be collected. Risk related data collection can consume more time & resources .

17. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Data analysis Risk Probability & Impact Assessment Ratings are done according to definition in RMP. Underlying rational for rating is included. Perform Qualitative Risk Analysis->T&T •Likelihood of each RiskRisk Probability assessment •Potential effect on project objectives (Schedule, Cost, Quality & Performance)Risk impact Assessment 0 1 2 3 4 5 Probability & Impact Scale

18. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Data analysis Risk Probability & Impact Assessment Perform Qualitative Risk Analysis->T&T # Risk Probability Impact 1 Continually changing requirements 3 4 2 Project involves the use of new technology 2 3 3 Inexperience team members 2 4 4 Unstable organizational environment 1 5 5 Product gets High Market response 4 5

19. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Data analysis Assessment of other risk parameters •responses that are to be implemented in a timely fashion.Urgency •how close we are, in terms of time, to a risk occurring.Proximity •Duration between occurrence & detection of impact (low - if duration is short) Dormancy •Its easeManageability • Of risk outcomeControllability • Ease of detection of results of the riskDetectability • to other risksConnectivity •How it will impact organizations strategic objectivesStrategic impact •Significance as perceived by stakeholder(s)Propinquity Perform Qualitative Risk Analysis->T&T

21. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Data Representation Probability and Impact Matrix Perform Qualitative Risk Analysis->T&T Separate Matrix (Cost, Scope, Schedule & Quality) Depends on How Risk need to be weighted. Opportunities & threats can be handled in same Matrix. We can quickly see priority of risks & determine response. Probability 5 4 3 2 1 0 1 2 3 4 5 Impact 1 2 Risk Level Low Moderate High # Category Risk Description Prob. Impact Risk Level 1 Cost Changing Approval requirement will cost more & delay project 5 5 High 2 Quality Reducing Quality check will impact deliverable quality 4 3 Moderate

23. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Data Representation Hierarchical charts: • If there are three parameters, the probability & urgency would be represented by x & y-axis, and the impact denoted by a bubble, which represents the size of impact on the project. Perform Qualitative Risk Analysis->T&T

24. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Risk Categorization Risk can be categorized by source/Root cause etc Useful in developing Risk Response. Categorized by Source-RBS, Area of Project – WBS or by Project Phase. # Risk Category Description 1 Quality All quality related risk including document deliverables & document quality 2 Scope All scope related risk 3 Schedule All schedule related risk Perform Qualitative RA->T&T->Risk Categorization Technical risk Management risk Commercial risk External risk

27. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Project Document Update Risk Register Perform Qualitative RA->Output Risk Register Updates Relative ranking or priority list of project risks Risks grouped by categories Causes of risk or project areas requiring particular attention List of risks requiring response in the near-term List of risks for additional analysis and response Watch lists of low-priority risks Trends in qualitative risk analysis results

28. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Project Document Update Risk Register Perform Qualitative RA->Output # Risk Probability Impac t Urgency Category Risk Level Risk Response 1 Continually changing requirements 3 4 Low Scope High 2 Project involves the use of new technology 2 3 Normal Solution Medium 3 Inexperience team members 2 4 Immediate Resource Medium 4 Unstable organizational environment 1 5 Immediate EEF Medium

29. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com) Perform Qualitative RA-> Review What is Qualitative & Quantitative Risk Analysis? Why to do Qualitative Risk Analysis What is probability impact matrix? Risk Data Quality Assessment What is Risk score? Hierarchical charts

30. By: Anand Bobade (nmbobade@gmail.com)