Benefits of analysing risk

A broad definition of project success is for a project to be on time and within budget. Assessing and analysing risk in your projects helps you to create more accurate and attainable schedules that are more likely to be on time and within budget - ie projects that are more likely to succeed.

Every project involves an element of risk. Risk analysis identifies the most sensitive tasks within a project - those that are most likely to affect the project finish date or overall cost if they are not monitored closely. Risk analysis also indicates the likelihood of a particular finish date, cost amount, income amount or margin amount being accurate. Understanding this enables you to set targets accurately, to create appropriate contingencies and to negotiate contracts with a fuller knowledge of the risks involved in your projects.

If you plan portfolios of projects rather than single projects, risk analysis helps you to prioritise projects within a portfolio in terms of their risk, thereby managing risk across the entire portfolio of projects.