Qualitative and quantitative risk analysis techniques are the basic backbone that allows every project to be delivered on time per customer expectations. Yes, you read it correctly; identifying any threat in advance will provide room for making necessary corrections in the project. This in turn will reduce the negative impact and enhances the positivity driving towards achieving the goal called the desired outcome.
Why risk analysis – When we design any project, we must be aware of the risks proactively to address them and avoid any last-minute surprises. Especially in complex projects analyzing possible risks in advance is a must. The very word qualitative and quantitative risk looks obvious that the former deals with the risk quality and the latter with the numbers. However, there has always been confusion among people when it comes to these two analyzing techniques. Only when you understand their key differences you can apply them at the right time for efficient results.
Qualitative Vs Quantitative risk analysis
| QUALITATIVE RISK ANALYSIS | QUANTITATIVE RISK ANALYSIS |
| Qualitative risk analysis focuses on evaluating each project risk by using the probability of occurring and their impacts on the project elements. Combining the probability and impact of a project risk gives a risk score which is used to prioritize the risks. | Quantitative risk analysis provides numerical estimates of the influence of risks on the project objectives. The calculated risk will be compared to the risk criteria. Based on this value, duration and cost will be estimated to support decision-making in order to reduce the risk. |
| Is at risk level | Is at project level |
| Is easy to perform | Is time-consuming |
| Does not require a software tool | Software tools facilitate the process |
| Is subjective evaluation of probability and impact | Is objective/numeric evaluation of probability analysis |
| Should be done first | Should be done after performing qualitative analysis |
| Analyzes the effect of individual project risks | Analyzes the combined effects of risk as a whole to specify an overall project risk |
| Is useful in all-size projects | Is useful especially in large and sophisticated projects |
| The risk scale and scores are qualitative | The risk scale and scores are quantitative |
| Provides quick information | Provides detailed information |
Final takeaway
From the above table we now clearly understand the difference between qualitative and quantitative risk analysis. We are sure that no longer you will feel confused between them. Qualitative risk analysis is a must to identify, record, and rank risks. Every project will have numerous risks and it is not possible to use a calculation to minimize that which is time-consuming.
Therefore, the qualitative process will assign resources to handpick risks that will cause a major negative impact on the project outcome. Later the most harmful risks will be worked upon to rectify them. This is exactly done in the quantitative method.
If you were thinking that both are independent, then your project results might never reach the satisfaction of the customer. Also, if you have thought that quantitative is difficult because it involves math, again you are wrong because one can be trained to use tools and learn math. But understanding the risk requires real skills.
We suggest you allocate the right resources to identify risk in the qualitative risk analysis technique, and train even amateurs to deal with the qualitative part.
Join us in our Virtual Risk Assessment training to fine-tune the project management skills in you and become a successful project manager.
