Practical Project Risk Management, Third Edition, 3rd Edition

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Simulating Possible Futures (Quantitative Risk Analysis)

One benefit of risk management in general is that it allows consideration of possible futures without the need for a time machine. The ATOM process, as typically applied on medium or small projects, does this in a purely qualitative manner, without using statistical analysis. This approach is perfectly adequate for such projects, but there are circumstances where this is not enough. Some bigger projects—such as those that are inherently risky because they are of high cost or long duration, or are innovative or strategically important—pose a higher level of risk challenge. These projects demand a deeper understanding of risk and therefore more rigorous analysis.

By using well-established ...