Difference between quantitative and qualitative risk analysis PDF

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23/01/2019

Difference between quantitative and qualitative risk analysis

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Dierence Between Quantitative And Qualitative Risk Analysis

 February 11, 2014

 Saket Bansal

 PMP, Project Risk Management

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Dierence Between Quantitative And

Qualitative Risk Analysis

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Before we get into the dierence between quantitative and qualitative risk analysis, it is mandatory we understand how risk analysis is performed in projects. We perform a Risk Analysis on a list of risks which are identied in the Identify Risks Process. This list of risks is documented in the form of a register called Risk Register.

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Now, it is essential to understand that Identify risk Process generally gives you a long list of risks and practically speaking, you may not have the resources to plan for each and every one of them. You may also realize that it is not necessary to take all of them into account as some of those risks may have low impact. This leads you to the fact that risks are ranked on the basis of their impact and likelihood and thus you can take care of the ones with high risk exposure. This is how we perform a Qualitative Risk Analysis Process.

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PMBOK® Guide Sixth Edition denes Perform Qualitative Risk as “The process of prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact as well as other characteristics.”

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By Perform Qualitative Risk Analysis: 1. We identify (or mark) risks for further analysis. 2. We identify actions for the rest of the risks based on the combined eects of probability of occurrence and impact on project objectives.

PMBOK® Guide Sixth Edition denes Perform Quantitative risk Analysis as “The process of numerically analyzing the combined eect of identied individual project risks and other sources of uncertainty on overall project objectives.” By Perform Quantitative Risk Analysis: 1. This analysis is only performed on risks which are marked for further analysis by Perform Qualitative Risk Analysis process 2. We identify “eect of identied risks on overall project objectives.”  Now, let us look at the dierence between quantitative and qualitative risk analysis in detail:

Perform Qualitative Risk Analysis

Perform Quantitative Risk Analysis

https://www.izenbridge.com/blog/differentiating-quantitative-risk-analysis-and-qualitative-risk-analysis/

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Difference between quantitative and qualitative risk analysis Perform Qualitative Risk Analysis

Perform Quantitative Risk Analysis

Perform Qualitative Risk Analysis Process

Perform Quantitative Risk Analysis process

consider all the risks identied in the identify

only considers the risks which are marked

risk process.

for further analysis in the Perform Qualitative Risk Analysis Process. These are the risks which have high impact on the project objectives.

Perform Qualitative Risk Analysis Process

Perform Quantitative Risk Analysis uses the

does not analyze the risks mathematically to

probability distributions to characterize the

identify the probability and distribution

risk’s probability and impact, it also use

rather stakeholders inputs (expert judgment)

project model (e.g. Schedule, cost estimate),

are used to judge the probability and impact.

mathematical and simulation tools to calculate the probability and impact.

In this, we assess individual risks by

This predicts likely project outcomes in terms

assigning numeric ranking of probability and

of money or time based on combined eects

impact, usually the rank of 0 to 1 is used

of risks, it estimates the likelihood of

where 1 demonstrates high.

meeting targets and contingency needed to achieve desired level of comfort.

Perform Qualitative Risk Analysis process is

Perform Quantitative Risk Analysis Process

usually applied in most of the projects.

may not be applied to many simple or moderately complex projects. We may not nd its use in software projects.

Now, that you have got all the answers to your doubts and questions related to dierence between quantitative and qualitative risk analysis, you may also want to check our other blogs or PMP® Trainings. We also did a live web clarication session on Risk Management topic. You may watch it, 

PMP® | Risk Analysis-Qualitative & Quantitative Approaches

You can join the discussion on the same in our Forum. You can also log into our YouTube channel watch the video on the same.

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NEGATIVE RISK

PMP

QUALITATIVE RISK ANALYSIS RISK THRESHOLD

POSITIVE RISK

PROJECT RISK MANAGEMENT

QUANTITATIVE RISK ANALYSIS

RISK APPETITE

RISK TOLERANCE

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