Project Risk Management is a continuous and collaborative process, which includes the application of both Qualitative and Quantitative Risk Assessment techniques. Most projects will include several mandatory Quantitative Risk Assessment studies in their scope; however, managing the day-to-day risks inherent on every project is often over-looked in terms of requiring formal risk assessments. Managing these types of risk is mostly a Qualitative Risk Assessment process, which generally applies one or more of the following techniques.
1.Delphi Technique
This is a form of brainstorming, but the essential difference between traditional risk brainstorming and applying the Delphi Technique is that the Delphi Technique makes use of expert opinion to identify risks on an individual and anonymous basis. Each expert then reviews every other expert’s risks, and a risk register is produced through continuous review and consensus between the experts. This is a widely used project risk management technique.
2. SWIFT Analysis
Standing for “Structured What-If Technique”, this is a simplified version of a HAZOP. SWIFT applies a systematic, team-based approach in a workshop environment, where the team investigates how changes from an approved design, or plan, may affect a project through a series of “What if” considerations. This technique is particularly useful in evaluating the viability of Opportunity Risks.
3. Decision Tree Analysis
Similar to Event Tree Analysis, but without providing a fully quantitative output, Decision Tree Analysis is most often used to help determine the best course of action wherever there is risk and uncertainty. This is done by starting with the initial proposed decision and mapping the different pathways and outcomes as a result of events occurring from the initial decision.
4. Bow-tie Analysis
This is one of the most practical techniques available for risk management. Bow-tie Analysis starts by looking at a risk event and then projects this in two directions. To the left, all the potential causes of the event are listed and, to the right, all the potential consequences of the event are listed. It is then possible to identify and apply mitigations (or barriers) to each of the causes and consequences separately, effectively mitigating both the probability of risk occurrence and the subsequent impacts, should the risk still occur.
5. Probability/Consequence Matrix
This has become the standard method in establishing risk severity in Qualitative Risk Analysis. Risk Matrices will often vary in size, but they all essentially do the same thing, and that is to: Provide a practical means of ranking the likelihood of risk occurrence against the impact of the risk, should it still occur. By taking the product of Risk Likelihood and Risk Impact, one is able to rank the overall severity of a risk and apply suitable mitigations based on the prominent risk driver.
Gaining the skillset for risk management is essential to succeed in business and in your career. OSBM offers ‘Project Risk Management Essentials for Project Professionals’ training course which aims to help people with various risk management methods and practices.
