MAEN QADDOURAHProject Director| AJ SAUDIJeddah, Saudi Arabia
What is the easiest way to quantify risks? Saving Changes...
Sort By:
Stéphane ParentSelf Employed / Semi-retired| Leader MakerPrince Edward Island, Canada
There is is no "easy" way, Maen. You have to assign a likelihood (aka probability) and consequences (aka impact) value to each risk.
You then have to figure out the cost of managing that risk, specifically the mitigation and contingency for that risk. For example, if you transfer the risk, you need to include the insurance premiums.
Finally, you have to apportion the overall risk management costs to each risk. Saving Changes...
James StrempleProject Manager II | PNC BankParma Heights, Oh, United States
In Manufacturing we use a method called Failure Mode Effects Analysis (FMEA). This lets you assign a Severity Level (how bad can it be?), an Occurance Probability(what are the chances of this actually occurring?), and a Detection probability(0% =Never Find This to 100% =we''ll find this everytime!). These levels can be broken down and numbered 1 to 10. These are then multiplied together to give a Risk Priority Number (Higher numbers are worse). The second step is the mitigation step, where you also define a corrective action for each risk. This action should reduce one or all of the levels previously defined. After this the RPN is re-evaluated to determine if the RPN reduction is significant enough.
Hope this helps! Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
Trying to add something to great comments above please let me say that the hard is to identify it because you lead with stakeholders that will help you to identify the risk. So, you have to make a great stakeholder analysis to understand if you have a risk seeker, a risk avoider or a risk neutral and trying to elicit the risk from each one. Saving Changes...
If you ask me and as per PMBOK Guide 5th ed, the easiest way and the first step in quantifying risks is "Interviewing".
Interviewing the relevant stakeholders, members of project team, SMEs, or consultants can give a quick estimate of the probability and / or impact of the identified risks on the proejct objective(s) based on their past experiences. Saving Changes...
Dr.Vijayakumar RamasamySenior Project Manager| RnD Project Management/NPIKuala Lumpur, Malaysia
my personal preferred tool is risk breakdown structure (RBS). Break it into components and identify risks for each component. Perform rating for each risks, e.g. risk priority number (RPN). Saving Changes...
"We should be careful to get out of an experience only the wisdom that is in it - and stop there; lest we be like the cat that sits down on a hot stove-lid. She will never sit down on a hot stove-lid again, and that is well; but also she will never sit down on a cold one anymore."
