Quality and Risk Themes
20 Risk
Tony Allan
Planning how risk is to be managed takes time, but it can save money. Different organisations have different attitudes and appetites for risk.
The process of developing a risk management plan involves using tools and techniques to:
- Identify risks;
- Assess risks;
- Plan how to manage Risks; and
- Implement risk management strategies.
At the same time ensure communication is effective.
Identify risks
Assessing risk – Qualitative Analysis
A primary and often the only form of qualitative risk analysis is a “Risk Probability and Impact Assessment”. This is a process of estimating the likelihood an event (risk) might occur and its potential impact, then prioritising the risk, leading to further quantitative analysis and/or planning how to respond to the risk.
Analysis is to breakdown concept into component part to improve understanding.
Other tools and techniques used to identify risks include assumptions analysis and diagramming techniques.
- Assumptions analysis is a process of exploring assumptions by considering accuracy, stability, consistency, and completeness of each assumption.
- Diagramming techniques include: cause and effect diagrams; systems or process flow charts; and influence diagrams.
The following video runs for about 5 mins and 30 secs. It provides a clear introduction to risk and explains how a probability impact matrix works.
Plan how to manage risk
The following is a real life example in Power and Water Industry:
The output from Identifying Risks is a “Risk Register”, which includes a list of identified risks and a list of potential responses. The following video explains how to make a risk register and what it could contain.
Plan how to manage risk.
Note: response plans can be recorded in the risk register, however in Assignment 2 you will still benefit by explaining what your probable mean and the rationale behind your choosing them.
https://www.youtube.com/watch?v=oNcIIdPkRDk
Summary of risk
This video uses PMBOK (another project management method) terminology but I have included it here because it is clear and succinct.