What type of analysis is often the first step in risk management?

Qualitative risk analysis is indeed typically the first step in the risk management process. This type of analysis involves identifying potential risks and assessing their characteristics to understand their nature and potential impacts. It focuses on the likelihood of risks occurring and the consequences if they do, relying on subjective judgment and experience rather than quantitative measures.

In qualitative risk analysis, risks are usually prioritized based on their significance. This prioritization helps project managers and teams focus their attention on the most critical risks that could impact project outcomes. By doing so, it lays the groundwork for subsequent steps in risk management, such as developing strategies for mitigation, which may involve more quantitative assessments of risks.

Quantitative risk assessment follows qualitative analysis and uses numerical methods to evaluate the potential impact of risks. Cost analysis and impact assessment serve their own specific functions within project planning and analysis but are not typically considered foundational steps in identifying and prioritizing risks.