Schedule Risk Management - Construction Project Scheduling and Control - page 384

distribution of project durations with the probability of success, as well as other useful
metrics.
The qualitative descriptions for risk generally fall into five categories that range
from high to low likelihood: remote, unlikely, likely, highly likely, near certainty.
• Remote indicates that it is reasonable to assume that the risk will not happen.
• Unlikely indicates a small likelihood that the risk will happen but that a risk is
possible, particularly over the lifetime of the project.
• Likely carries the expectation that the project probably will see the risk occur at
some time during the project.
• Highly likely indicates that the risk will occur at least one time, so the priority
for this qualitative judgment should be high.
• Near certainty indicates that planning should include the expectation that it will
occur more than once during the project.
At the beginning of the qualitative analysis portion of the risk workshop, the facil-
itator should explain the qualitative terms chosen for the program and ensure that the
participants have a common understanding of the range and judgments. This will take
some discussion to ensure that the stakeholders feel comfortable with providing a
description of their qualitative assessment of the risk, whether it is a near certainty or
unlikely. The facilitator should remind the participants that this is historically based
upon lessons learned. If no one in the risk workshop, for example, has ever run into a
specific risk, it should carry a remote likelihood of occurrence. Conversely, a problem
that has been witnessed by all participants on almost all projects should be described
as a near certainty of showing up on the project.
In conjunction with the likelihood of occurrence is the issue of consequence. This
is every bit as important as the likelihood that a risk will happen. The consequences
are the ramifications that occur from the effects of the risk if (or when) it happens. So,
identifying the risk and the likelihood that the risk will occur does not tell the entire
story and is not sufficient for analysis. Qualitative assessment of the consequences of
rsisks is an attempt to understand how the risks will affect the project from all aspects,
that is, from direct impacts to secondary disruption and inefficiencies.
The descriptions of consequence include the range of impacts, from no impact to
disaster: negligible, acceptable, marginal, critical, and catastrophic.
• Negligible consequence indicates that there will be minimal or no impact on the
schedule.
• Acceptable consequence indicates that there will be some slippage of contractual
milestones but that there will be float available to recover the overall schedule.
• Marginal consequence indicates that the risk will cause some critical path items
to be impacted and will result in minor delays that will require recovery efforts.
• Critical consequence indicates that there will be major and potentially lengthy
delays to a single critical path item.