What is Risk Assessment?

Risk Assessment is the identification of potential problems or hazards, and the analysis and evaluation of the risks associated with them. Three fundamental questions are often asked:

  1. What might go wrong?
  2. What is the likelihood or probability that it will go wrong?
  3. What are the consequences or severity?

 

Risk Assessment is further classified in three sections:

Risk Identification

Risk identification is used to determine the extent of a potential threat and the risk associated with that threat. It requires gathering relevant data for the subsequent risk analysis process. Examples of data collection methods include – Team meeting/team workshop, Interviews, Questionnaires, User requirements specification, Functional specification and Brainstorming.

 

Risk Analysis

Risk Analysis is a quantitative or qualitative process that involves evaluating each risk’s probability of occurrence, severity of impact and detect-ability. This process can either deliver a qualitative, semi-quantitative or a quantitative result. The form of the result is normally dependent on the information available.

 

Risk Evaluation

Risk Evaluation compares the results of the risk’s probability of occurrence, the severity of impact and the risk detect-ability against each other, and leads to the generation of an overall estimate of the relative value for the risk in question. This result is the output of the Risk Assessment Process.

One way of depicting the relative value of a risk is through a Risk Classification Matrix. In the matrix shown below, the probability of occurrence of a hazard is evaluated against the severity of the impact. Other classification matrices and techniques can also be used to arrive at the overall relative value of the risk.

 

 

 

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