Risk is an uncertain event or condition that can affect a project positively or

negatively.
Bad risks are also called threats. Positive events or conditions are also called
opportunities or “good risks”.
A risk that can have a positive or negative consequence is called business risk. A
risk that can only have a
negative consequence is called pure risk.
Risk averse: One who does not take risk is called “risk averse”.
Risk tolerance is the degree, amount, or volume of risk that an organization or
individual will withstand.
Risk threshold is the measure of level of uncertainty or the level of impact at
which a stakeholder may have a
specific interest.

Risk is measured by assigning a monetary value to it and that value is arrived at

by multiplying the probability
and impact of the risk.

The value of the risk is 25 percent of the impact, $10,000, which is $2,500.

The impact where the value is negative, is called threat and the impact where value
is positive, is called
opportunity.

External risk arises out of external policies or regulations.

Internal risk arises from within the project

Technical risks arise from the technology being used.

Risks could be related to project management.

A decision tree helps in analyzing risk and its impact on taking decisions in a
scenario where there is
uncertainty on the outcome.

The key objective of risk management is to increase the probability and or impact
of positive events and
decrease the probability and or impact of negative events.

There are six risk management processes. Plan risk management, identify risks,
perform qualitative risk
analysis, perform quantitative risk analysis, and plan risk responses belong to the
project planning group and
Control Risks belongs to the monitoring and controlling process group

Plan Risk Management

Analytical techniques
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Identify Risks

Generally, the project team should look for possible risks in project management
plan, project schedule, cost,
and scope data.

SWOT analysis, which stands for strength, weakness, opportunities, and threats, is
also used to analyze project
risks. Usually these analyses are done at organization level first and later the
findings are applied at project
level too.
The output of the risk identification process is risk register
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Perform Qualitative Risk Analysis

Perform qualitative risk analysis is

the process of prioritizing risks for further analysis or action by assessing their
probability of occurrence and
impact, which is part of the planning process group.

Qualitative risk analysis is the technique of risk probability and impact

assessments.
One of the most important techniques is risk data quality assessment, which is to
find out the accuracy of the
risk data, i.e., whether the risks are real risks.

a probability and impact matrix,

where you can classify risks as high, medium, and low priority.

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Perform Quantitative Risk Analysis

The first technique used is data gathering and representation techniques. The
numerical quantitative risk data
is usually collected by analyzing past project data or by expert judgment.

Monte Carlo Analysis

quantitative risk analysis and modeling techniques. The

quantitative risk analysis should only be done when it is worth doing it. Usually
large multi-year project may
require quantitative risk analysis.

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Plan Risk Responses

negative risk or threats :- avoid,mitigate,transfer

+/- risks accept with contigency response

+ risk :exploit,enhance

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risk reassesment,analysis