ALLINGAG LOVELY JHANE M.

DECEMBER 4, 2021
BSISM 4-3

What are the advantages and disadvantages of using:

1. Qualitative Analysis
Advantage of Qualitative analysis
 It has easy presentation. The results of the qualitative risk analysis can be
presented graphically using a risk assessment matrix. A project manager can
use a risk assessment matrix to communicate risk management strategy to team
members or senior management.
 It has simple assessment methods. The project team doesn't require a training
to conduct the qualitative risk analysis, as it doesn't rely on any complicated
tools or software.
 There is easy prioritization. Since the qualitative risk analysis already classifies
risks according to their likelihood and impact, it becomes easy to determine risks
that an organization should focus on: the ones falling into the highest likelihood
and impact categories.
 There's no need to determine frequency. The qualitative risk analysis results
don't depend on the risk occurrence frequency, so the team performing the
analysis can save time by not predicting the frequency and the exact timing of
each risk.
 There's no need to quantify the impact on costs and schedule. Since qualitative
risk analysis doesn't quantify the risk impact on project costs and schedule, time
is saved during the analysis.
Disadvantages of qualitative analysis:
 lower accuracy of received outputs in comparing risks caused by
different hazard sources
 lower correctness of the outputs, které mají spíše orientační
hodnotu;
 lower reliability of received results;
 worse transparency of the process;
 lower orderliness;
 difficult control of the costs.

2. Quantitative Analysis
Advantages of quantitative analysis:
 Determine the probability of achieving a specific project objective
 Quantify the risk exposure for the project, and determine the size of cost and
schedule contingency that may be needed
 Identify risks requiring most attention by quantifying their relative contribution to
project risk
  Identify realistic and achievable costs, schedule, or scope targets

Disadvantages of quantitative analysis:

 The need to use software tools. These may have good functionality and capability to
support detailed analysis of risk, but they are an additional cost to the project, are
likely to require staff training if they are to be used effectively, and require integration
with other project tools.
 Analytical outputs need careful interpretation, which may need some understanding
of statistical principles to avoid misinterpretation.
 Results have spurious precision, since computer-based tools naturally produce
outputs to many decimal places, suggesting a degree of precision which is unlikely to
be justified by the input data.
 A related danger is spurious credibility, giving too much credence to model outputs
without applying sufficient critical thought or judgment to the results.
 The use of specialized tools can result in dependence on an “expert” to run the
analysis, performing tasks that are not understood by the team, leading to a degree
of separation and loss of ownership.

3. Combination Approach

Advantages
 Mixed model organizational structures optimize employee experience and
resources and work well for companies that are project-based. This structure
can improve lines of communication and provide flexibility for working on
multiple projects. Employees working on special projects still have links to their
functional departments and can refer back to the other members of their
departments for consultation and advice.

Disadvantages
 A major disadvantage to the matrix organization is that it requires a great deal
more coordination effort than other structures. Also, employees who have to
report to more than one boss may have conflicting accountability. This can lead
to conflict and stress for the employees involved. Project leaders of matrix
organizations must have good conflict-solving skills to cope with these
difficulties.
REFERENCE
https://study.com/academy/lesson/qualitative-risk-analysis-benefits-limitations.html
http://exclusive.multibriefs.com/content/quantitative-risk-analysis-strengths-and-
weaknesses/business-management-services-risk-management
https://smallbusiness.chron.com/advantages-disadvantages-mixed-model-approach-
31372.html