Last Updated: April 4, 2023

Evaluate Risk Workflow

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There are two ways to evaluate the risks associated with a project. Qualitative Risk Management is the primary approach used by most project managers. It is a type of problem analysis we perform when we sit with our insurance agent to review one or more policies.

The second type of risk management is a more Quantitative type of analysis. The primary qualitative risk assessment tool used in project management is the Monto Carlo Method. This mathematical method, in which thousands of simulations are run based on several risk variables, is designed to provide a probability estimate on schedule and cost. Once the project’s cost and duration are calculated, this method answers the question: “What is the probability of finishing the project on time and within budget?”

By this time in the project management lifecycle, you may have spent weeks or months working with stakeholders, planning, estimating, and negotiating, so you have been dealing with risk along with your estimates. But now is the time to sit back, look at the project, and formally determine how you will manage potential problems or evaluate the calculated duration and cost of the project given risk events.

Qualitative risk management identifies, analyzes, and responds to risk events that might negatively impact project objectives and constraints, like cost and duration.

The process we use for qualitative risk management involves:

  • Risk Identification

  • Risk Cause

  • Risk Probability

  • Risk Consequence

  • Risk Alarm

  • Risk Mitigation

  • Risk Contingency

This qualitative analysis aims to classify or score risks and respond to those risks you have the time and money to address. Another way of saying this is that qualitative risk analysis aims to help you identify those risks you cannot afford to ignore.

SWOT Analysis on the Project Level

The use of SWOT analysis in project management has become more widespread in recent years, as project managers have recognized its value in helping to identify and manage risks and opportunities. While SWOT analysis has traditionally been associated with strategic planning, its application to project management has become increasingly common.

There is no specific date or year when people started using SWOT in project management, as its adoption has been gradual and varies across organizations and industries. However, the use of SWOT analysis in project management likely began to gain traction in the late 20th century, as project management became more formalized as a discipline and organizations began to look for ways to improve project outcomes.

Today, SWOT analysis is a valuable tool for project managers to evaluate the strengths, weaknesses, opportunities, and threats associated with a project and to develop strategies to maximize project success. Using SWOT analysis in project management, project managers can identify potential problems and opportunities early on and make informed decisions about project direction and resource allocation.

The four elements of SWOT analysis are as follows:

  • What are the project’s strengths? Internal factors that provide an advantage. Examples include a history of successful, related projects, skilled team members, or realistic constraints and objectives.

  • What are the project’s weaknesses? Internal factors place the project at a disadvantage compared to others. Examples include a lack of resources, outdated technology, poor management, inadequate budget, or unrealistic stakeholder expectations.

  • What are the project’s opportunities? External factors that could positively affect the project’s objectives. Examples include the team learning new technologies, career-building possibilities, success leading to future customer projects, or obtaining other tangibles for the organization, such as a new facility.

  • What are the threats to the project’s success? External factors that could negatively impact the project’s objectives and constraints. Examples include the expected merger, leadership changing their mind, or functional managers removing key team members.

In project management, a SWOT analysis is often used to identify potential risks and opportunities that could impact a project's success. The analysis can help project managers to make informed decisions and develop strategies to address these risks and opportunities.