In a real life example; with my old firm we changed to a different vendor in order to enact a cost management strategy (against my wishes, but the budget I was given was "final"). We went away from a Vendor who we knew cost more, but had proven themselves in the long run. In the end, it wasn't even a workaround to fix, the final product was an unmitigated disaster.
I tried to convey the inability of effectively collaborating with the "referred" vendor - who was not local and inexperienced. In the end, the Qualitative Analysis saw that all reserves were going to go far overbudget.
In the end, the Risk Response was accepting the loss and going back to the original vendor.
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1 reply by Riyadh Salih
Oct 31, 2018 9:26 PM
Riyadh Salih
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William, thanks for your feedback good example of your experience and in many places the same act just been repeated.
Qualitative risk analysis is more subjective, quicker, more frequently used in projects, doesn't require specialized tools, is used in almost all risk analysis. Whereas quantitative risk analysis is more objective, time consuming, not used for all risks, and sometimes uses specialized tools.
Though I haven't used both but as far as I know that the qualitative risk is a process of prioritizing risks as per the probability and impact. highest risks probability and impact will subject to quantitative risk process to translate the impact on the schedule and costs by numbers. For example if there is a high risk in getting a particular information from a major stakeholder (as qualitative risk), then a forecast for 2 days overrun and additional cost of 1000$ in regular time wages (quantitative risk).
I Hope that the above is worthwhile!
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1 reply by Riyadh Salih
Dec 30, 2019 11:52 AM
Riyadh Salih
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Omar, thank you for your example, please keep plug in
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RAJESH K LProject Manager, PMP| Bharat Electronics, Bengaluru, IndiaBengaluru, Karnataka, India
We use qualitative risk analysis all the time on projects and in our non-project personal work to quickly assess how much effort we want to invest in managing a risk. Quickly assessing the probability and impact of a risk can help us be efficient about risk management.
The most common form of quantitative would be EMV - use historical data or an educated guess from a group of SMEs to determine the maximum impact and likely probability and multiply the two...
Kiron
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1 reply by Riyadh Salih
Oct 31, 2018 9:30 PM
Riyadh Salih
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Kiron, thanks for your feedback,so with EMV most probably you are using calculations of PERT triangular Beta equation right and more complicated to calculate SD and Bell curve
Sometimes, when there is not any previous records or data to quantify the risk you may need to use a qualitative approach. For example, you can quantify the risk of machine malfunction or production defects if you keep a record of them. But, when it comes to a new machine/technology for your company, you probably have no recorded data, so you may choose to apply the categorical/qualitative analysis.
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1 reply by Riyadh Salih
Dec 30, 2019 11:56 AM
Riyadh Salih
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Thanks Aboalfazl yes it is harder when we don't have statistic data.
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Ivo EssenbergSenior Program Manager| IDEXXHoofddorp, Netherlands
Many organizations will use qualitative risk analysis to identify and prioritize risks, which will allow the use of quantitative analysis on the most important/impactful risks.
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1 reply by Riyadh Salih
Dec 30, 2019 11:59 AM
Riyadh Salih
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Ivo, thanks for your feedback some organization they use just different approach as such they don't use same terminology of PMI
Quantitative: If what we are building does not meet performance target X, we will lose Y% of our potential sales market, directly impacting our business case.
Qualitative: If what we are building does not meet performance target X, there are no contractual performance guarantees but our currently contracted customers will be very unhappy.
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1 reply by Riyadh Salih
Dec 30, 2019 12:02 PM
Riyadh Salih
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Keith thanks for your example looks brilliant but if they put performance bond the quality must be maintained otherwise.
In a real life example; with my old firm we changed to a different vendor in order to enact a cost management strategy (against my wishes, but the budget I was given was "final"). We went away from a Vendor who we knew cost more, but had proven themselves in the long run. In the end, it wasn't even a workaround to fix, the final product was an unmitigated disaster.
I tried to convey the inability of effectively collaborating with the "referred" vendor - who was not local and inexperienced. In the end, the Qualitative Analysis saw that all reserves were going to go far overbudget.
In the end, the Risk Response was accepting the loss and going back to the original vendor.
William, thanks for your feedback good example of your experience and in many places the same act just been repeated. Saving Changes...
Qualitative risk analysis is more subjective, quicker, more frequently used in projects, doesn't require specialized tools, is used in almost all risk analysis. Whereas quantitative risk analysis is more objective, time consuming, not used for all risks, and sometimes uses specialized tools.
Sante, thanks for your good additions Saving Changes...
