Subtitles of the Movie

In the previous movie you were briefly introduced to the tools and techniques of the perform qualitative risk analysis process. In this movie we'll cover the first tool and technique on our list, risk probability and impact assessment. This is the tool that provides the initial risk rating. To do this, we'll utilize the definitions of risk probability and impact that were defined in the risk management plan. We covered this in Part 1 of this three-part course series on risk management. Using these definitions would determine two things that'll allow us to assign a risk rating. First, we'll determine the chances that each risk will occur. This is the probability. And next we'll examine the effects of the risk on the project objectives if the risk were to occur. The project objectives are, for example, cost, quality and schedule. As a reminder, risk can also be positive occurrences and not just negative ones, so we're examining these opportunities as well. Let's take a couple of steps back and review how risk assessment takes place, including who's involved within the step. The PMBOK Guide notes that this step includes project team members and individuals outside of the project who have knowledge about the risk categories or the risks themselves that are being evaluated. We'll call these individuals that I just mentioned our experts. In the following image, you get a visual of this step taking place. These experts are brought together for risk assessment by the project or risk manager through interviews and or meetings. Our experts discuss and evaluate each risk using the probability and impact definitions to determine a risk rating. But not all risks receive a risk rating. There are some risks whose probability and impact is very low. And remember that our goal in risk management is to spend our time on the important risks that will affect the project. In order to place our efforts where they're needed the most, we place these low-probability and impact risks in what's called a watch list. We'll be monitoring the watch list throughout the project to determine whether the status of these risks has changed and if so, the risk whose status has changed will need to be further assessed and then assigned a risk rating so that we can determine how to respond to the risk. So just to make sure it's clear, a watch list contains low-priority risks and we maintain this list because we don't want to simply forget about a risk. It's identified for a reason. We place these low-probability and impact risks aside so that we can devote our efforts to the risks that will affect the project objectives and we continue to keep on eye on these low-priority risks on the watch list just in case. I'd like to take a moment to remind you that the probability and impact definitions are based on the organization and the stakeholder risk tolerance levels. We discussed this at length in Part 1 of this course series but it's so important that I'll mention it repeatedly. This is because the work that we're putting in now would not be valuable without a correct assessment of your stakeholders. Evaluating risk can be subjective and it's not based on opinion of our experts. Rather, our experts evaluate the risks based on the probability and impact definitions that are provided to them. This step needs to be carefully monitored because these experts are not necessarily experts in risk assessment. Instead, they're knowledgeable of the risks or risk categories. Moving on, the risk ratings are assigned using this tool and technique, which will be used by the tool and technique that we cover in the next movie, which is the probability and impact matrix. On that note, we'll close out this movie and move on to cover the matrix next.