Risk IQ? – Risk Identification & Qualification
As all know very crucial part of project is to effectively manage and mitigate the risks which are associated with Cost, Schedule and Product quality
This blog helps you to understand
- “How to identify the Risk in the Project?”
- “How to qualify a Risk”
“Uncertainty” denotes Risk. Any cause or damage leads to potential loss due to future uncertain events is called Risk. Project should foresee the risk and identify the mitigation plan to avoid potential budget, schedule or quality loss.
How to increase you Risk IQ?
Identification and Qualification of risk is a critical part of Risk Management life cycle. Risk Identification helps to decides the magnitude of Risk and its impact to the project quantitatively by applying probability and Impact verification
Lets increase our Risk IQ simply by asking Intelligent Questions like below.
1. What is the probability/likelihood of the risk occurrence? (Rare / Occasional / Frequent)
Probability of risk occurring with in a month time considered to be “Frequent”, between 1-2 months is “Occassional”, and anything that can occur after 2 months is said to be “Rare”.
2. What is the Impact to the project if the Risk occurs? (Low /Medium /High)
Impact varies in terms of Cost, Schedule, Product Quality, Client Satisfaction, Information Security, Statutory & Regulatory or any other critical contractual obligations agreed with customer. According to the range of impact, low/medium/high can be set.Risk Exposure is calculated as = Probability X Impact
The below chart helps project team to analyze and promote the risk to Low, Medium or High
5 Quick steps – Count your Fingers
- Identify Risk
- Define Probability & Impact for Risk
- Assess and Validate the Risk Exposure to highlight to the Senior Management
- Plan for Mitigation and Contingency with Target dates
- Monitor and Revisit risks as and when required
So, Why Wait Lets all Bring Excellence in Risk Intelligence…