• The Organizational Process Assets in this context refer to "information on prior, similar completed projects, studies of similar projects by risk specialists, and risk databases [...]"(comp . PMBOK3, p. 255)
• The logical order of the risk management processes can not strictly derived by analysing the IO-parameters: Risk Management Planning generates the Risk Management Plan which is used by Risk Identification. But Risk Identification generates the Risk Register which is also used (and updated) by Qualitative Risk Analysis and Quantitative Risk Analysis. The definition of Quantitative Risk Analysis solves this unclear situation: Quantitative Risk Analysis operates on identified and preclassified risks. Hence Quantitative Risk Analysis is a successor of Qualitative Risk Analysis which itself is a successor of Risk Identification.
(8.4) Quantitative Risk Analysis
(8.4.1) Process Input
... generated by predecessor processes
- Project Scope Statement
- Risk Management Plan
- generated by: Risk Management Planning
- Risk Register
- Project Management Plan :: Project Schedule Management plan
- Project Management Plan :: Project Cost Management Plan
... introduced by external units
- Organizational Process Assets
(8.4.2) Process Definition
Quantitative Risk Analysis is the process for "[...] numerically analyzing the effect on overall project objectivities of identified risks" (comp. PMBOK3, p. 237). On the base of the results of the Qualitative Risk Analysis the "Quantitative Risk Aanalysis is performed on risks that have been prioritized [...]" and "[...] analysizes the effects of those risks events and assignes a numerical rating to those risks". Instead of estimating the single impacts by using a raw typology in the process of Quantitative Risk Analysis the impacts to the whole project will be made computable and will be computed for generating a more elaborated total ranking. Usable techniques are for exapmle "Monte Carlo simulation" or "decision tree analysis" (comp. PMBOK3, p. 254).
Shortly spoken one might say that "quantitative risk analysis breaks down risks from a high medium low ranking to actual numerical values and probabilities of occurence" for being able to compute the overall effects (comp. CROSSWIND7, p. 423)
- Part of the Planning Process Group
- Child Process of Develop Project Management Plan
- Member of Knowledge Area Project Risk Management
The subject Risk Management operates on the base of other risk concerning concepts
(8.4.3) Tools and Techniques
PMBOK Mentioned Methods
- Data gathering and representation techniques like "Interviewing" and computing the "probability distributions" on the base of "expert judgement" (comp. PMBOK3, pp. 255ff)
- Quantitative risk analysis and modeling techniques (comp. PMBOK3, pp. 257ff) like
- Sensitivity analysis which results for example may be represented by the "tornado diagram"
- Expected montetary value analysis (EVM) which "[...] is a statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen. Opportunities are positive values, threats as negative.
- Decision tree analysis "[...] is usually structured using a decision tree diagram that describes a situaion under considerations, and the implications of each available choices and possible scenarios"
- Modeling and simulation for computing the whole effects for exapmple by using the Monte Carlo analysis
Open Source Tools
- myPmpsFactory offers an integrated risk register which easily can be expanded by quantitative risk values. This 'template' can be edited by Open Office 3 (Calc).
(8.4.4) Process Output
- Updates of the Risk Register build an expansion of the initially generated and already updated / widened risk register by the following additional information
- Probabilistic analysis of the project
- Probability of achieving cost and time objectives
- Prioritized list of quantified risks
- Trends in quantitative risk analysis results
(comp. PMBOK3, p. 259f)
(8.4.5) Output Using Successor Processes
Successors using the initially generated output as own input(1):
Processes using the updates as input(2):
- Qualitative Risk Analysis
- Activity Duration Estimating
- Schedule Development
- Cost Estimating
- Plan Purchases and Acquisitions
- Plan Contracting
- Select Sellers