- Identify Risks: The first step is to identify the potential risks that could impact the project. This can be done through brainstorming sessions, reviewing project documents, and considering past experiences.
- Assess Risks: After identifying the risks, the next step is to assess the likelihood and impact of each risk. This can be done by rating the risk on a scale of probability and severity.
- Prioritize Risks: Once the risks have been assessed, they need to be prioritized based on their likelihood and impact. Risks with a higher probability of occurrence and higher impact should be addressed first.
- Develop Response Strategies: Based on the priority of the risks, response strategies should be developed to mitigate or avoid them. This can include contingency plans, risk transfer, risk acceptance, and risk reduction strategies.
- Monitoring and Review: Regular monitoring and review of the risk management plan is important to ensure that risks are being effectively managed and to update the plan as needed.
Qualitative risk analysis helps project managers make informed decisions about how to allocate resources, allocate contingency plans and make informed trade-off decisions about how to mitigate risks to ensure project success.