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Risk Factor Analysis - A New Qualitative Risk Management Tool. PMI Connections 2000 Project Management Institute Seminar & Symposium September 12, 2000 - Houston, TX John Kindinger Probabilistic Risk and Hazard Analysis Group (TSA-11) Los Alamos National Laboratory

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risk factor analysis a new qualitative risk management tool

Risk Factor Analysis - A New Qualitative Risk Management Tool

PMI Connections 2000

Project Management Institute Seminar & Symposium

September 12, 2000 - Houston, TX

John Kindinger

Probabilistic Risk and Hazard Analysis Group (TSA-11)

Los Alamos National Laboratory

LA-UR 00-3444 Approved for public release; distribution is unlimited

presentation topics
Presentation Topics
  • Background and Objectives for Risk Factor Analysis (RFA)
  • General Approach for Performing RFA
  • Example RFA Results
  • Integration of RFA with Quantitative Risk Analysis
objectives for the development of rfa
Objectives for the Development of RFA
  • Capable of evaluating technical risks in conceptual design, before schedule & cost baselines are available
  • Easy to perform and adaptable to different projects & programs
  • Systematic, objective and sufficiently comprehensive to produce meaningful specific insights
  • Useable to support quantitative risk analysis
tasks for risk factor analysis
Tasks for Risk Factor Analysis
  • List activities, tasks or other elements that make up the project
  • Identify the applicable risk factors
  • Develop risk-ranking criteria for each risk factor
  • Evaluate each activity and rank risk for each risk factor
  • Sum results across risk factors for each activity
activity identification
Activity Identification
  • Follow the logical progression of tasks or process steps being used by the project team
  • Define tasks at the level of detail needed to reveal unique risk issues and important dependencies between tasks
  • Document results with a simple flow chart
identifying risk factors
Identifying Risk Factors
  • Risk factors are the drivers that will ultimately determine performance measure results
  • Risk factors need to be relevant to the specific activities to be examined
  • For LANL facility projects, we have developed a generic set of risk factors and grouped them into four categories
risk ranking criteria
Risk Ranking Criteria
  • The assessments of risk for a given risk factor need to be made consistently across differing types of activities
  • Therefore, for each risk factor, qualitative criteria are needed that define risk in each category (low, medium, high)
risk evaluation
Risk Evaluation
  • Evaluate each task or activity against each risk factor using the ranking criteria and assess the risk level appropriately
  • All risk factors may not be applicable for any specific activity
  • Record the results on a worksheet, including justification for the assessment
risk summation
Risk Summation
  • Also, record the risk rankings in a table format using numbers (0-3) to represent the risk rankings
  • Then sum across the risk factors for each task to get risk category and the total task score
  • All risk factors are weighted equally in this process
input distribution development
Input Distribution Development
  • Risk Factor Analysis results provide a basis for the development of distributions used in the quantitative risk model.
format of quantitative risk assessment results
Format of Quantitative Risk Assessment Results
  • Cumulative probability distributions provide a complete picture of uncertainty, it is not ignored or assumed to take on extreme values.
  • Results provide a basis for setting risk-based performance targets and contingencies.
  • Sensitivity analyses identify contributors to risk
conclusions
Conclusions
  • Risk factor analysis is a qualitative risk analysis technique aimed at identifying and assessing the drivers that will determine overall project performance
  • RFA has been used at Los Alamos for the early assessment of technical risks in conceptual design and later as part of integrated qualitative and quantitative risk analyses
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