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Risk analysis is the
science Science is a systematic endeavor that builds and organizes knowledge in the form of testable explanations and predictions about the universe. Science may be as old as the human species, and some of the earliest archeological evidence ...
of
risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environm ...
s and their probability and evaluation.
Probabilistic risk assessment Probabilistic risk assessment (PRA) is a systematic and comprehensive methodology to evaluate risks associated with a complex engineered technological entity (such as an airliner or a nuclear power plant) or the effects of stressors on the environ ...
is one analysis strategy usually employed in science and engineering. In a probabilistic risk assessment risks are identified and then assessed in terms of likelihood of occurrence of a consequence and the magnitude of a potential consequence.


Risk analysis and the risk workshop

Risk analysis should be performed as part of the risk management process for each
project A project is any undertaking, carried out individually or collaboratively and possibly involving research or design, that is carefully planned to achieve a particular goal. An alternative view sees a project managerially as a sequence of even ...
. The data of which would be based on risk discussion workshops to identify potential issues and risks ahead of time before these were to pose cost and/ or schedule negative impacts (see the article on
cost contingency When estimating the cost for a project, product or other item or investment, there is always uncertainty as to the precise content of all items in the estimate, how work will be performed, what work conditions will be like when the project is execu ...
for a discussion of the estimation of cost impacts). The
risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environm ...
workshops should be attended by a large group, ideally between six and ten individuals from the various departmental functions (e.g. project manager,
construction Construction is a general term meaning the art and science to form objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Press 2009 and co ...
manager, site superintendent, and representatives from operations, procurement, rojectcontrols, etc.) so as to cover every risk element from different perspectives. The outcome of the risk analysis would be the creation or review of the risk register to identify and quantify risk elements to the project and their potential impact. Given that risk management is a continuous and iterative process, the risk workshop members would regroup on at regular intervals and project milestones to review the risk register mitigation plans, make changes to it as appropriate and following those changes re-run the risk model. By constantly monitoring risks these can be successfully mitigated resulting in a cost and schedule savings with a positive impact on the project.


Risk analysis and information security

The risk evaluation of the
information technology Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology syste ...
environment has been the subject of some methodologies;
information security Information security, sometimes shortened to InfoSec, is the practice of protecting information by mitigating information risks. It is part of information risk management. It typically involves preventing or reducing the probability of unauthorize ...
is a science based on the evaluation and management of security risks regarding the information used by organizations to pursue their business objectives. Standardization bodies like ISO,
NIST The National Institute of Standards and Technology (NIST) is an agency of the United States Department of Commerce whose mission is to promote American innovation and industrial competitiveness. NIST's activities are organized into physical s ...
,
The Open Group The Open Group is a global consortium that seeks to "enable the achievement of business objectives" by developing "open, vendor-neutral technology standards and certifications." It has over 840 member organizations and provides a number of servi ...
, and
Information Security Forum The Information Security Forum (ISF) is an independent information security body. Primary deliverables The ISF delivers a range of content, activities, and tools. The ISF is a paid membership organisation: all its products and services are inc ...
have published different standards in this field.


See also

* Actuarial science *
Benefit risk When the actual benefits of a venture are less than the projected or estimated benefits, the result is known as a benefit shortfall. If, for instance, a company is launching a new product or service and projected sales are 40 million dollars per ...
* Cost risk *
Event chain methodology Event chain methodology is a network analysis technique that is focused on identifying and managing events and relationship between them (event chains) that affect project schedules. It is an uncertainty modeling schedule technique. Event chain m ...
*
ENISA The European Union Agency for Cybersecurity – self-designation ENISA from the abbreviation of its original name – is an agency of the European Union. It is fully operational since September 1, 2005. The Agency is located in Athens, Greece an ...
*
Information security Information security, sometimes shortened to InfoSec, is the practice of protecting information by mitigating information risks. It is part of information risk management. It typically involves preventing or reducing the probability of unauthorize ...
*
Information Security Forum The Information Security Forum (ISF) is an independent information security body. Primary deliverables The ISF delivers a range of content, activities, and tools. The ISF is a paid membership organisation: all its products and services are inc ...
* ISO *
IT risk Information technology risk, IT risk, IT-related risk, or cyber risk is any risk related to information technology. While information has long been appreciated as a valuable and important asset, the rise of the knowledge economy and the Digital R ...
*
NIST The National Institute of Standards and Technology (NIST) is an agency of the United States Department of Commerce whose mission is to promote American innovation and industrial competitiveness. NIST's activities are organized into physical s ...
*
Optimism bias Optimism bias (or the optimistic bias) is a cognitive bias that causes someone to believe that they themselves are less likely to experience a negative event. It is also known as unrealistic optimism or comparative optimism. Optimism bias is comm ...
*
Project management Project management is the process of leading the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. T ...
*
Reference class forecasting Reference class forecasting or comparison class forecasting is a method of predicting the future by looking at similar past situations and their outcomes. The theories behind reference class forecasting were developed by Daniel Kahneman and Amos T ...


External links


European Institute of risk management

Harvard Center for Risk Analysis

Center for Risk Management of Engineering Systems, University of Virginia
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