Risk Analysis: Qualitative or 'Guessitative'?

Kenneth has 14 years of healthcare experience in government and private industry. Over eight years of experience managing healthcare IT projects, operations, contracts, and personnel. His work experience includes project management, contracts and procurements, data analysis, claims adjudication, business writing, and business process modeling. Kenneth was certified in 2006 as a Project Management Professional.

  Business Case   Risk Management   Strategy  

Risk analysis can be a tricky thing. A project manager is asked to look into the future and make an estimate of what will happen, how it will affect the project and what needs to be done about it. While there is some guidance in PMBOK, performing risk analysis can easily become an effort in frustration if the project manager does not have a simple plan or process in place to handle it. After all, no one can really look into a crystal ball and see the future.

The PM’s Crystal Ball
PMBOK describes qualitative and quantitative analysis. In general, qualitative tends to be what is done more often in projects. Quantitative is a bit more nebulous and difficult, often requiring statistical analysis to some degree. There are some basic steps for qualitative analysis that a project manager can use to perform risk analysis that covers all the bases. Using this simple process will help keep the “guessitative” analysis out of the risk management. While there is always some element of guessing in risk analysis because the issues haven’t occurred, the guessing should always be methodical, educated and logical in nature. In other words, qualitative analysis is a good tool that is used to make good guesses.

The first step before analyzing the risks is to identify them. For this article, I will explore an example risk that is very common in many projects: …

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