There are numerous techniques that can be used for identifying and analysing risks. This article discusses techniques that can be applied to managing risks as follows:
Delphi Technique – This technique involves sending questionnaires to experts and compiling their responses without linking the opinions to the persons that suggested them. The responses are then returned to the same group of experts for further analysis or amendments. Experts supply their opinions of risks anonymously without influencing one another.
Root Cause Analysis: The art of using diagramming techniques like Ishikawa Diagram/Fishbone Diagram, Process Flow Charts & Influence Diagrams to find the root causes of problems can throw up risks that need to be documented.
Checklist Analysis: Using a checklist on projects can help to identify risks. Examples of activities on a checklist may include reviewing documents, engaging stakeholders, etc. Checklist analysis can help to identify pending or problematic tasks that pose risks to the project.
Risk Probability and Impact assessment: What is the probability that a risk will occur? What will it cost the business if it does happen? The Probability and Impact Matrix indicates which risks need to be managed before others.
Risk Reassessment – This involves reassessing risks to see if anything has changed. The main goal is to find any new risks that may have come up and to examine if previously identified risks are still valid.
Variance and Trend Analysis - Comparing actual results to planned results is a great way to see if something is getting worse or improving. Look for variances in defects, schedule, performance and cost to identify risks that may have cropped up on your project.
Reserve Analysis – This involves keeping tabs on the money you have set aside for responding to risks. This is also known as a contingency reserve. Running low on this means you may not have enough funds to cover the remaining risks. While the Management Reserve is for managing “unknown unknowns”, the contingency reserve is for “known unknowns”.
Risk Audits – In this exercise, an outside party comes in to examine an organization's risk response strategy and how effective it is. They check to confirm that risk responses address their root causes and determine how effective risk planning processes are.
Technical Performance Measurement – This involves checking the performance information of your project to see if it measures up to what was planned.
Status Meetings - Every status meeting should have an element of risk identfication and review. They can help to head off problems, initiate a risk response on time or identify an opportunity that needs to be exploited. Be sure to solicit input from frontline staff - they will be better at identifying risks since they are the ones doing the job. Techniques like brainstorming can further complement this.
SWOT Analysis – SWOT Analysis can help to assess the performance of a business by highlighting the strengths, weaknesses, opportunities and threats it faces.