Monday, August 29, 2011

Risk & Issues: The big confusion

Risk Vs Issues:

Many time I have asked this question to myself on the difference between risk and issues. Hence this article.

How risk can be quantified?
risk=probability of event x cost of event

Managing risk is one of the important part of the project management. In an generic term Issue and Risk may look closer but they are not. Risk is always considered to be an potential problem and should be monitored throught out the lifecycle of the program/project.

Characteristics of risk:
a. It can have an cause(Requirement/Assumption/Constraints/Condition).
b. It can have an impact which may be Positive or Negative
c. It can have an severity level attached to it.
d. It should have an timeline in which it expires.

When an risk becomes an issue?
When the risk increases it becomes an issue and special action item is required on it. Risk has to be monitored carefully so that it has to be moved from the state of Risk to Issue and take necessary action on the same.

So to be more clear Issue is an risk which has occured or materialized.Issue on the otherhand could be an occurance of risk already defined. Its gap identified between the action/execution on the stakeholder expectations.

Key Differentiators:

Sno# Risk Issues
1 It may occur or may not Always current
2 They are uncertain in nature It exists
3 Can be mitigated, enhanced or avoid Not possible to do so, you have to resolve it
4 Needs an risk response and mitigation plan Requires immediate action      


Anonymous said...

I would like to apply EVM to my project. I have used your excel but I am unable interpret my data. Could you please help to present my data.

K Siva Karthikeyan said...

Please let me know the scenario. I could help you with the template.