General Definition of Risk Analysis

June 6, 2007

Risk analysis is the science of risks and their probability and evaluation.

The term cindynics (from the Greek kindunos, “danger”) has been proposed for this field. This term is used in France, but has not been widely adopted in the English-speaking world.

Probabilistic risk assessment is the analysis strategy usually employed in science and engineering.
As part of the risk management process risk analysis for each project should be performed. 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.

The risk workshops should be chaired by a small group ideally between 6 to 10 individuals from the various departmental functions (e.g. project manager, construction manager, site superintendent, and representatives from operations, procurement, project controls, etc.) so as to cover every risk element from different perspectives.

The outcome of the risk analysis would be the creation/ 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.

From: WikiPedia http://en.wikipedia.org/wiki/Risk_analysis_%28engineering%29

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