If you find yourself saying “I would bet yes”, then you are saying that you think this risk event is more likely than not to happen. Ask yourself “If I had to bet money, would I say this risk is going to happen or not, what would it be?” There is value in the experience and “gut feel” of the project stakeholders in relation to this project.
#Risk probability and impact definitions full
Especially since many organizations do not have the skills required to a full on numerical or statistical analysis of probability. It is not likely to have much cost impact as there will already have been funds in the budget for the expert’s work.įor probability definitions, I find it best to keep things simple. Impact: This situation is likely to have a higher impact to time due to the delays while we try to find an alternate expert or spend time training a new person. Risk Event: A higher priority project may pull an expert from my project resulting in delays and potential quality issues with products this person was creating. They also suggest breaking up the impact areas of a project as well as any given risk event might have differing scales of severity based on the topics. Many project management experts suggest using verbal descriptions to assist the stakeholders in analyzing risk events. Even 1 second after the stroke of midnight would not have been a good thing. Is a 1 day delay a high impact to time? If your project is a regulatory compliance project then 1 day late can be considered high if it leads to penalties and fines. If you project is being funded from a finite source such as loans or grants, the YES, it is a high impact. Is a $10,000 impact to the project a high impact to cost? If your project budget is only $50000, then YES. When a small probability is extrapolated over a large population it can still be a big deal. Is 1% probability a low probability? Be careful. Often words like high, medium and low are used for both probability and impact.
By providing definitions, the Risk Management Strategy promotes consistent analysis of risk events. We all know those people who raise risks and think that all their risks are a big deal and need to be acted on immediately. One of the things that is contained in the Risk Management Strategy is definitions for estimating probability and impact for any given risk event.
Is it high probability or high impact or both?Īnd what is a high impact anyway? High cost to fix, high impact to time? What does it mean if someone says this is a HIGH RISK?
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