Planning

Probability and impact assessment

Definitions for probability and impact are defined in the risk management plan. If your project does not have a risk management plan, you can develop a probability and impact assessment to record definitions for the likelihood of events occurring (probability), and the impact on the various project objectives if they do occur. It also has a key to assign an overall risk rating based on the probability and impact scores.

The probability and impact assessment can receive information from:

  • Risk management plan
  • Risk register

It provides information to the risk register.

The probability and impact assessment is a tool used in 11.3 Perform Qualitative Risk Analysis in the PMBOK® Guide – Sixth Edition. It is developed once and does not usually change.

 

Tailoring tips

Consider the following tips to help tailor the probability and impact matrix to meet your needs:

  • On smaller projects the impacts may be grouped together without distinguishing impact by objective.
  • The matrix can be 3 × 3 for a small project, 5 × 5 for a medium project, and 10 × 10 for a complex or large project.
  • To indicate the relative criticality of various objectives (usually scope, schedule, cost, and quality), you can include a tighter range of thresholds between For example, if cost is a critical factor, consider a very low impact as a 2 percent variance, a low variance as a 4 percent impact, a medium variance as a 6 percent variance, a high variance as 8 percent, and a very high variance as a 10 per- cent variance. If the cost is more relaxed you might have a loose range such as: very low impact as a 5 percent variance, a low variance as a 10 percent impact, a medium variance as a 15 percent vari- ance, a high variance as 20 percent, and a very high variance as a 25 percent variance.
  • If there are other objectives that are important to the project, such as stakeholder satisfaction, you can incorporate them. Some organizations combine scope and quality into one objective.
  • You can make the assessment more robust by including urgency information to indicate if a risk is imminent or in the distant future.

 

Alignment

The probability and impact assessment should be aligned and consistent with the following documents:

  • Risk management plan
  • Risk register
  • Probability and impact matrix
  • Stakeholder register

 

Elements of a Probability impact assessment

Document element Description  
Scope impact Very High The product does not meet the objectives and is effectively useless
  High The product is deficient in multiple essential requirements
  Medium The product is deficient in one major requirement or multiple minor requirements
  Low The product is deficient in a few minor requirements
  Very Low Minimal deviation from requirements
Quality impact Very High Performance is significantly below objectives and is effectively useless
  High Major aspects of performance do not meet requirements
  Medium At least one performance requirement is significantly deficient
  Low There is minor deviation in performance
  Very Low There is minimal deviation in performance
Scope impact Very High The product does not meet the objectives and is effectively useless
  High The product is deficient in multiple essential requirements
  Medium The product is deficient in one major requirement or multiple minor requirements
  Low The product is deficient in a few minor requirements
  Very Low Minimal deviation from requirements
Quality impact Very High Performance is significantly below objectives and is effectively useless
  High Major aspects of performance do not meet requirements
  Medium At least one performance requirement is significantly deficient
  Low There is minor deviation in performance
  Very Low There is minimal deviation in performance
Schedule impact Very High Greater than 20 percent overall schedule increase
  High Between 10 percent and 20 percent overall schedule increase
  Medium Between 5 percent and 10 percent overall schedule increase
  Low Noncritical paths have used all their float, or overall schedule increase of 1 to 5 percent
  Very Low Slippage on noncritical paths but float remains
Cost impact Very High Cost increase of greater than 20 percent
  High Cost increase of 10 to 20 percent
  Medium Cost increase of 5 to 10 percent
  Low Cost increase that requires use of all contingency funds
  Very Low Cost increase that requires use of some contingency but some contingency funds remain
Probability Very High The event will most likely occur: 80 percent or greater probability
  High The event will probably occur: 61 to 80 percent probability
  Medium The event is likely to occur: 41 to 60 percent probability
  Low The event may occur: 21 to 40 percent probability
  Very Low The event is unlikely to occur: 1 to 20 percent probability
Risk rating High Any event with a probability of medium or above and a very high impact on any objective
Any event with a probability of high or above and a high impact on any objective Any event with a probability of very high and a medium impact on any objective Any event that scores a medium on more than two objectives
  Medium Any event with a probability of very low and a high or above impact on any objective
Any event with a probability of low and a medium or above impact on any objective
Any event with a probability of medium and a low to high impact on any objective Any event with a probability of high and a very low to medium impact on any objective
Any event with a probability of very high and a low or very low impact on any objective
Any event with a probability of very low and a medium impact on more than two objectives
  Low Any event with a probability of medium and a very low impact on any objective Any event with a probability of low and a low or very low impact on any objective
Any event with a probability of very low and a medium or less impact on any objective