Risk Management

Navigating Project Outcomes: Quantitative and Quantitative Risk Analysis

The process of Performing Quantitative Risk Analysis serves as a numerical microscope, scrutinizing the collective impact of identified individual project risks and other uncertainty sources on overarching project objectives. While not a compulsory step for every project, its usage unveils a significant advantage: it quantifies the overall project risk exposure. This numerical risk data can then become a robust pillar supporting risk response planning.

The decision to undertake a robust Quantitative Risk Analysis depends on several factors. These include the availability of high-quality data about individual project risks and other sources of uncertainty, and a sound underlying project baseline for scope, schedule, and cost. This process typically requires specialized risk software and expertise in the development and interpretation of risk models.

The project's risk management plan specifies if Quantitative Risk Analysis is to be used for a project. It is most likely appropriate for large, complex projects, strategically important projects, projects with contractual requirements, or projects with key stakeholder requirements.

Perform Quantitative Risk Analysis evaluates the combined effect of all individual project risks and other sources of uncertainty on project outcomes. It utilizes information on individual project risks assessed by the Perform Quantitative Risk Analysis process. These risks have a significant potential to impact the project's objectives.

The fruits of the Perform Quantitative Risk Analysis process are harvested as inputs for the Plan Risk Responses process. This subsequent process plays a vital role in suggesting responses to the overall project risk and crucial individual risks. Once the Plan Risk Responses process has unfolded, a quantitative risk analysis can be conducted again. This second analysis aims to gauge the probable effectiveness of the planned responses in curbing overall project risk exposure.