Risk Analysis

 Obstacles arise during project activities, such as poor requirements capture, ill-conceived design, inappropriate technology or inappropriate solution selection.  Project methodologies such as PRINCE2 require robust issue and risk management procedures to be instituted alongside other project activities.  Risk analysis is the process of identifying and evaluating the threats, options and possible outcomes of decisions.   Risk lurks in every assumption that is made by any member of the initiative team and so a useful starting point is to list all the assumptions that are being made.  Anticipated risks should be assigned a contingency.  Situations which might arise and for which there is no contingency present a high level of risk.

As with project planning, risk assessment depends upon many variables, assumptions and factors including individual experience, attitude and perceptions of the person or persons undertaking the identification and evaluation.  Risk evaluation prepares us for adverse situations.  It is a highly subjective exercise since it involves anticipating the possibility of a situation arising, guessing the expected consequences of a conditional probability of an event occurring multiplied this by the chance of the event occurring.