The term 'Risk' was only recently coined. In the past, we used the term uncertainty - or decision making under uncertainty. There are qualitative approaches such as the meetings mentioned earlier - and quantitative approaches such as monte carlo analysis. The idea is to evaluate and control areas of uncertainty in a project. There are some interesting theories in this area such as 'prospect theory' and 'rational choice theory' that might give you insight into how humans make flawed decisions. I would guess that others reading this risk forum would agree that one of the biggest challenges we face as planners  is convincing managers to alter their decision making style. For example, a single construction manager might frequently base decisions on one or two previous experiences in his career - and yet these few experiences are not statistically representative of the industry.

Hi Marcio,

Performing risk analysis and mitigation measures is certainly a must on every project but certainly no guarantee to your planned schedule. There are things which are unforseen i.e. Acts of God, the recent economic meltdown for example, which originated in the US and affected a lot projects half way around the globe in Dubai and other parts of Asia.

I used to laugh at the MANCOM meeting when our Risk Manager starts identifying potential risks and a lot of them are just plain silly things like he was one of the 7 dwarfs character (very pessimistic) . But come to think of it...It can really happen when you least expected it. 

Best regards,

Daniel

Marcio,

A good question.
I would think it depend on the type of project, the context of the project and the types of risks being analysed.

In other words both quantitative and qualitative methods would be used on most projects in an ideal world.

"Whato do u prefere:
qualitative analysis with effective actions or quantitative analysis with many questions?"

In my experience the really risky parts of projects I deal with are the intangible and immeasurable things. Hence I do my best to focus on “heading them off at the pass” (risk mitigation, contingency and avoidance) rather than trying to measure the unknown and intangible.

That said, in reality I find that the important risks which can be quantitatively analysed are done so formally and qualitative analysis is mostly done in an extremely informal way. I have done formal research on this. It is amazing how many project managers found out about a show stopper risk when they took the customer out for a coffee. During this research I asked an experienced project director what his primary risk management technique was and he replied: “[to] pick up the phone”. In other words he meant communicate with the customer.

What many good project managers do is arrive at a consensus about how much a risk something poses as early as they can by discussing it with the stakeholders, usually in an informal way. If the relationships are good, by simply discussing it in this way the risk is often minimised and ways to manage it are agreed to. You wont find this in the PMBOK but I have published formal rigorous research to prove it, not to mention my own and others’ experience.

Cheers,

Dave.

Dear Marcio,

I would do both by following the normal sequence of:

1. Risk Identification
2. Qualitative Risk analysis
3. Quantitative Risk analysis
4. Risk response planning.

A session with all the concerned would be helpful in identifying all the Risks that might happen.

Then we can create the Probability matrix and associate the importance to each and asses the impact

Quantitative Rish analysis is done using tools like decision trees and calculating the monetary values.

Of course, we need to monitor all the risks throughout the project and take the necessary action when it occurs.

Best,

Samer

Dear Marcio,

The objective of the Risk Analysis is to increase the probability and impact of positive events and decrease the probability and impact of negative events.

Good luck,

Samer

I agree with Clive (#4). If you don’t have a good relationship with the client your schedule isn’t going to matter much. If you do have a good relationship you have far more risk management options.
After that the biggest threat to the schedule is the unknown. Hence risk identification may be vital.

Hi,

can we continue our valuable discussion about risks during
Project Life Cycle and the risk analysis which deals with identification and analysis of risk related to different aspects involve in the project life cycle.

Marcio ,GOOD LUCK

Hi,
*Risk analysis is a part of the risk management process.
*Risk management planning is a part of planning process group.
* Risk management planning procss is important to ensure that the level,type and visibility of risk mansgement are cmmensurate with both the risk and importance to the project to the organization,to provide sufficient resources and time for risk management and it shall be completed early during the project planning.
*Risk response planning is the process of developing options and determining several actions to enhance and reduce threats to project objectives.
*Stratigies for nigative risks;
Avoid
Transfer
Mitigate
Accepte
Share
Enhance
Exploit