risk analysis methods (Essay Sample)

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Introduction
A risk is anything that might affect any component of a project and prevent the completion of a project. Therefore, risk analysis is the process of identifying risk factors that may affect the completion of a project. The risks should be identified before commencing on the project and the best decision taken if, in any case, the risk manifests itself, the project won't stop. The risk analysis process is more of a chance and error trial. Risk analysis methods are divided into two: qualitative risk analysis and quantitative risk analysis. We will discuss qualitative risk analysis. There are five types of qualitative risk analysis according to Hong. At. Al (2009). They include:
* SWIFT analysis.
* Delhi Technique Analysis
* Bow-Tie Analysis
* Decision Tree Analysis
* Probability/consequences analysis.
Swift analysis
This technique uses the question "what if" analysis. Questions are gathered forecasting what if a certain scenario plays out, how would the project be affected? It is a random brainstorming of risks associated with the project. It assesses the different components of the project that might be affected in case of uncertainty. SWIFT Analysis is a whole-stick process that looks at the project from a multidimensional level. A team is formed and it analyses the whole project systematically on multidimensional levels. For SWIFT analysis to be effective, the team structures the questions by creating checklists and examining each checklist for the project.
Delhi technique
It is also a random questionnaire method that uses a team of experts. It is similar to the SWIFT team, but the team here is involved in face-to-face conversations. There is anonymity about the decisions made and the questions are given in rounds. A decision is made at the end of each round. For example, a team of experts meets in a conference room to discuss project risk management. Questionnaires are formulated and then questions for the first round are passed through by a facilitator. The team fills out the questions and then returns to the facilitator. The facilitator will give a conclusion from the summary of the first round of questions. Then the team is now aware and uses these conclusions to determine the decisions for subsequent rounds.
Bow Tie Analysis
It is used to assess the risks and show the relationship between the risk scenarios. The method looks like the shape of a bow tie. The analysis gives a list of all the risks that can be associated with the project, then goes further to show all possible solutions to the risks. It also gives the preparedness status of the project to handle the risks if they come. It gives control of the escalation measure once the escalation factor has been identified.
Decision tree analysis
It is a top-to-bottom analysis approach. It identifies the most probable failure, then goes into various levels of failure that will cause the main failure to occur. The failure of a project is mainly caused by the failure of the small parts of the project. The Tree Analysis technique shows the relationship between the major cause of failure in the project and the small parts failure. It tracks failure from the top back to the subdivisions of the project that contributed to the main failure.
Probability risk analysis
It is a detailed and systematic process of assessing risks associated with a complex project. This method asses the magnitude of the failure and the likelihood of a failure occurring. It uses numerical values to express the failure probability. According to Goussen et. al (2016), this method is the number one contributor to the perfection of computerized systems. Through Probability Risk Analysis, the computer