Making decisons can be very challenging.
Qualitative and quantitative risk analysis are two tools to help you make better decisions.
In general, you almost always want to use qualitative analysis.
Qualitative risk analysis is when you assess the probability times impact, which equals a risk score.
Two general rules of thumb are to:
– Use a 1-10 scale, not low medium or high, for a tangible number as the end result.
– Defining what the risk score means for your team. This will avoid discrepancies where my evaluation of impact at a 2 equates to your 5.
Qualitative analysis allows you to quickly prioritize and rank your risks.
Quantitative risk analysis is a numeric estimate of the overall effect of risk on the project cost and factors that could delay the timeline.
This analysis is used more sparingly since it requires more research and quality data.
And with that I leave you with the timeless words of Muhammad Ali, “He who is not courageous enough to take risks will accomplish nothing in life.”