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Qualitative tools or methodology
The three main qualitative tools or methodology assessment are:
- Interviewing/gathering data because it involves direct interaction with people or groups in which questions are asked and feedback is given immediately.
- Expert Judgment because they are knowledgeable of the field therefore can give their best experience and judgment regarding the risk and its effect of its occurrence.
- Using an information database from previous projects because they tell the actual stores of the risk and how they were addressed and managed.
- Because risks are inherent throughout the life cycle of projects, Team B has selected a few techniques and tools for the identification and ranking of risks.
Some Tools, Pros and Cons
First Hand infomation
Information may be biased or inaccurate
Easy to do, structured, IDs most important inputs
One input entered at a time
Displays probability, automation assumed
Difficult to understand, higher computations
Risk Datat Quality Assessment
Aside from the other tools of risk management open and useful to project managers, the most important component of any project is the quality of the data used in documenting the processes of the project. The data used in include information gathered from surveys, questionnaires, interviews, reports and meetings. In other to properly assess data quality, the following questions need to be asked:
- Is the data and information accurate?
- Is the identified risk understood?
- How credible is the information collected?
- Is the data/information free of bias and objective?
An overview of these questions will allow the project team to evaluate the reliability of the data gathered. According to the Virtual Training Company website, “the quality of the data used influences risk management because the information provided may increase the level of uncertainty and failure in the completion of the qualitative analysis of any project.” The use of unreliable data in the qualitative analysis creates a level of mistrust in the project manager or team among stakeholders. The quality of the data utilized determines the reliability of the other tools/techniques and methods i.e. hazard identification, impact and probability rating and risk likelihood.
Failure Mode and Effect Analysis (FMEA)
FMEA is primarily used in reliability engineering because it focuses on possible risks and each possible effects. FMEA produces a table displaying the risk, failure mode, cause of the failure, effect, and recommended action. Estimates to correct the failure or lessen the impact of the project are developed from the information in the table. This method is appropriate to analyze the failure risk of the new equipment installed into the system. The installation procedure has many areas failures can occur that could shorten the life of the equipment. The estimates produced will easily rank the failure mode severity level.
Risk management is a significant role in most organizations. Organizations embark on increasingly multifaceted and large-scale projects, and these projects are often times executed successfully but in a changeable and environment filled with risks. Risks should be prioritized. The probability and impact matrix allows the project manager to effectively manage the risk and focus the attention on the most important risks.
The Probability and Impact Matrix is constructed on the standard that a risk has two primary components (Learning to Prioritize Risks, 2013): Probability (risk may occur) and Impact (risk will have negative impact).
In the Software Implementation scenario for Direct Auto Insurance, schedule and priorities is classified as a risk in this project. The project implementation schedule is short. Consequently, team members may not do an effective job of managing their time to ensure all project activities are completed which may result in the project being delayed. On the matrix, this risk will be listed as a probable with a critical or high impact.
A matrix would have risks listed in the left bottom corner which would be low in probability and low in impact ; in the left top corner would be high in probability but low impact; in the right bottom corner would be high in impact but low probability; in the right top corner would be high in probability and the impact is high.
.Due to the fact that a qualitative risk analysis is the first stage of recognizing and ranking identified risks, it is necessary to ensure that the data/information gathered for the process is accurate and unbiased to prevent the unreliability of the data gathering process. Hence, this method of analysis assists both team members and stakeholders in the first stages of review and classifies them according to their impacts on ongoing projects.