PM DQR Week 6
Qualitative risks are typically categorized by a group of experts to determine the probability and the impact to project objectives. In responding to your peers, consider the next steps you would take as project manager to assemble a group of experts to participate. Who would you select and why?
Kyle Sternberg
Qualitative and Quantitative Risk Assessments are two different ways of assessing risk within an organization. Qualitative tends to generalize the risks within a range rather than a numerical value that indicates their same intensity (Niazi, 2021). Because these risks are generalized/ranged, Qualitative Risk Assessment can be used in any industry in whatever field it needs. It is often used before working on any Quantitative Risk Assessment as a first step in assessing risk for a project/company.
Quantitative Risk Assessment is used when we want to precisely describe the risk in a numerical value to measure its exact intensity within the project. This Risk Assessment method would be used when we want to understand our risks more in depth and take more preventive actions to ensure they don’t happen due to the nature of that risk. Quantitative Risk Assessment usually requires a much more highly trained set of individuals, more complex tools, and more time to establish a reliable assessment.
Because qualitative analysis is a much quicker and much less expensive form of analysis, a situation in which this method would be used is in a rush marketing project that doesn’t have any potentially “critical” issues like a small marketing campaign for a small business. Suppose a small company needed to get a marketing campaign out quickly about a yearly release of a product, and they fell behind because of not being sure that they were going to have this product ready on time. In that case, they might use qualitative analysis to get through the marketing of this new project. Because the company is small and may not have the capacity to fund or train individuals to perform a quantitative analysis, they may stick with this qualitative analysis. Another situation in which I would use qualitative analysis only would be in situations in which many of my risks are potentially not quantifiable like safety precautions on a production floor. There are many inherent risks that exist on a production floor when starting new projects. However, many of those risks when it comes to the safety of the employees may not be quantifiable in numbers. So, it may be best to come off with prevention steps for those safety precautions and move forward with attempting to prevent them from happening.
Resources:
Niazi, M. A. (2021, June 10). Qualitative vs. Quantitative Risk Assessment. Technical Articles. Retrieved July 12, 2022, from https://control.com/technical-articles/qualitative-vs-quantitative-risk-assessment/
Response –
Maureen Dionne
Hi Everyone,
Risk analysis is an important part of project management as it is the key took in analyzing and assessing various factors that could negatively impact the success of a project. “It allows you to examine the risks that you or your organization face, and helps you decide whether or not to move forward with a decision” (2021). Risk analysis allows project managers to determine the level of risk and the impact it may have on the project, which ultimately allows that project manager to decide the best method to control the risk.
The two types of risk analysis include qualitative and quantitative. “Qualitative assessment is typically less complex than quantitative techniques and therefore requires less effort. In most small-and medium-sized projects, qualitative risk assessment methods will be sufficient. In contrast, quantitative risk assessment methods offer more precise information,” (Mind Edge, 2014). Quantitative risk assessment is more precise because it is evidence based. “It assigns numerical values to risks, based on quantifiable data, such as costs, logistics, completion time, staff sick days, and so on” (Guthrie, 2021).
Qualitative risk analysis is most appropriate when the impact to cost, schedule, quality, or functionality are low to medium. One example of qualitative risk assessment within my organization was part of an annual disbursement process in which we sought out various vendors for printer and toner needs related to the print job. The quotes and previous quality from the bidding vendors were similar and as a result our analysis of the competing bids was qualitative in nature instead of quantitative as we determined that the risk to the project cost and printing quality were low.
A second example when qualitative risk analysis was warranted within my organization was a project in which we created training manuals and a training program for new onboarding resources. There were few risks within the project related to cost, quality, or schedule and we determined that quantitative risk analysis was not necessary in that situation.
References:
Risk analysis and risk management: Evaluating and managing risks. Decision Making from MindTools.com. (2021). Retrieved July 10, 2022, from https://www.mindtools.com/pages/article/newTMC_07.htm#:~:text=Risk%20Analysis%20is%20a%20proven,move%20forward%20with%20a%20decision.
MindEdge Inc, (2014) Project Management. Retrieved from: https://snhu.mindedgeonline.com/content.php?cid=87524
Guthrie, G. (2021, September 23). Qualitative risk analysis vs quantitative risk analysis: What’s the difference? Backlog. Retrieved July 10, 2022, from https://backlog.com/blog/qualitative-risk-analysis-vs-quantitative-risk-analysis-whats-difference/#:~:text=A%20quantitative%20risk%20analysis%20is%20evidence%2Dbased.,assess%20the%20highest%20priority%20risks.
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