Do You Know the Difference Between an Issue and a Risk?
Posted on Thu, Oct 06, 2011 @ 08:31 AM
I frequently see people using the terms “Issues” and “Risks” interchangeably. Sometime back, I saw a discussion on linkedin related to this topic. I also saw similar a discussion on the PMI Risk Management Community of Practice discussion board. Those of you who participated or read those discussions may very well know about the difference. I would like to initiate this discussion for others.
PMBOK defines a risk as an uncertain event or condition that, if it occurs, has a positive or a negative effect on project’s objectives.
It is important to pay attention to the underlined portion, which emphasizes the uncertainty or probability aspect of risk. The event has not happened yet but there is a chance it could occur.
An issue is an event or condition that has already happened and has impacted or is currently impacting the project objectives. There is no uncertainty or probability aspect associated with an issue. For the mathematics geeks among us, the probability of a risk may range between 0 and 100%, but it can’t be either 0 or 100. The probability of an issue is 100%.
Another way to look at the difference between an issue and a risk is how it is managed during the project execution. When managing risks, you quantify them and keep a risk reserve (in terms of cost or time or both) which gets used as the risks materialize. The project plan is not altered unless the risks have happened. Now let’s look at issues. The resolution of issues may alter the project plan right away. The action needs to take place right away to resolve the issue.
The table below offers a side-by-side comparison of examples of risk and issues.
As you can see from these examples, the language of risk is normally in the future tense whereas language of an issue is in the present or past tense. This is the biggest difference between an issue and a risk. What do you think? Do you have anything to add?