• Carry out a qualitative analysis.
• Carry out a quantitative analysis.
• Use a risk/opportunity decision tree.

45 min.

A11.KCI-3. Assess the probability and the impact

1. Risk analysis involves:

• Describing the event or condition clearly.
• Investigating its cause to determine preventive measures.
• Assessing the likelihood of occurrence.
• Evaluating potential consequences.
• Identifying signals indicating changes in probability.
• Determining the timeframe for manifestation.

2. "Exploring the root cause guides effective responses; prioritizing prevention over cure is key."

3. Assessing risk is complex, and it is often categorized as low, medium, or high. High risk indicates potentially severe consequences. Yet, understanding risk requires considering attitudes and context. People may act against their long-term goals unconsciously. Rational risk management benefits decision-makers and individuals alike.

4. When the event or condition occurs, it affects:

• Costs.
• Duration.
• quality of the result.

5. Additionally, Groote et al. note:

• Quality of information provided to involved parties.
• Failure to meet set requirements and standards.

6. Also, the impact on achieving the sponsor's objective with the delivered result.

7. Probability and impact assessments are conducted collaboratively with key stakeholders and operational staff, gathering expert opinions to inform the process.

8. You assess probability and impact in two stages:

• Qualitative assessment: high, medium, or low.
• Quantitative assessment: 70% probability with an average damage of €100,000 and a standard deviation of €1,000.

9. After qualitative analysis, prioritize issues for further investigation. Proceed with quantitative analysis to estimate their impact, forming the basis for decision-making.

Lastly, assess the timeframe of manifestation and early warning signs.

To validate the application of this key competence indicator, Assess the Probability and the Impact in the IPMA certification, individuals in project management have to demonstrate:

• How they Carried out a qualitative analysis.
• How they Carried out a quantitative analysis.
• How they Used a risk/opportunity decision tree