Defining Probability and Impact

When you're writing the risk management plan, you'll want to document the definitions for probability and impact as they relate to potential negative risk events and their impacts on the four project objectives. Probability describes the potential for the risk event occurring, while impact describes the effects or consequences the project will experience if the risk event occurs. This definition can be sophisticated or simple. For example, you might use numeric values to define probability and impact or simply assign a high-medium-low rating to each risk. What's important to note now is that you don't use these probability and impact definitions here. You use these definitions later in the Perform Qualitative Risk Analysis process. (I'll talk in depth about probability and impact in the section "Analyzing Risks Using Qualitative Techniques" later in this chapter.) But you should define and document them here in the risk management plan.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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