If the definition of a risk is:
Anything that might affect a project achieving its goals
then what is the definition of an opportunity?
In project terms an opportunity is something (tangible or an "effect") identified within the project deliverables that could unlock or otherwise facilitate a positive or beneficial effect.
Such things are sought and documented within the Business Case to counterbalance and justify the cost. Opportunities are the same things though are largely uncovered or noticed during the evolution of the project rather than by-design at the beginning or business case time.
PMI defines risk as:
Risk is an uncertain event or condition that, if it occurs, has an impact on at least one project objective. (PMBOK, p275)
So, by strict definition, opportunity is risk. This seems counter-intuitive, but you can think of it like this: you don't know if the opportunity will happen, so the risk is that it may or may not happen or that you could miss capitalizing on it.
Opportunity is not risk. They are totally separate and different - the good news is that PM frameworks are likely to start to back-out of this habit - see the foot of this blog post on exactly this question and the note on PMBoK notes in 2013 Why Opportunities on projects should never be called risk.
This User Guide for a risk management tool provides the following definition -
What is a risk?
Before looking at risk management, we need to understand what a risk actually is. The PMBOK gives a good - “an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, or quality.”
When describing risks, we usually want to the cause, the affected area, and the consequences. Let’s look at an example risk given in the PMBOK - “due to the forecast of high winds in our area, there is a risk that the roof of the barn will blow off causing our cattle feed to be ruined and loss of our livestock”. Here we see the cause (high winds), the affected area (barn roof), and the consequences (loss of livestock).
Let’s look at another example, this one perhaps more familiar. “Due to ongoing support demands, there is a risk that the Senior Programmer will be shifted from the project, causing a delay in the schedule”. Here we see the risk cause (ongoing support), the affected area (the Senior Programmer) and the consequences (a delay in the schedule).
Lots more information in the guide itself.
What defines opportunity, under the heading of risk, is the improvement to your already planned objectives. It is important to weed out real project opportunities from actions, which are things you already plan to, need to or must do.
Opportunity is added value. It CAN and often DOES change "the scope, deliverables, costs and benefits of the actual project". For example, if there is a possibility of carrying out two activities concurrently which were previously dependent upon each other and would have taken 4 weeks, then there is an opportunity to decrease (if not halve) that element of the schedule and possibly save resource/cost.
One has to take a pragmatic approach to this in the real world. Most people will, whether we like it or not, associate risk only with downside. Do not fall into the trap of trying to squeeze opportunity review into the same session as downside risk, especially at the end. It is mentally like slamming your car into reverse gear while in the fast lane of the motorway.
Www.threatsandopportunities.com best answers the issues above. Risk comprises known outcomes with associated probabilities, given the occurrence of an vent r condition. Threats are negative outcomes and opportunities are positive outcomes as they affect the cost, schedule, or performance objectives of a project. PMs handle threats through avoidance, prevention, mitigation r transference and handle opportunities through acceptance, exploitation, improvement, or transference. Addressing both threats and opportunities like with SWOT brings risk management closer to a science than an art as industrial engineers and operations research analysts can attest to
Risk = a chance to lose.
Opportunity = a chance to earn.
In my understanding, PMI puts Risk & Opportunity together because an opportunity becomes an opportunity only if it becomes reality; until then, we have to deal with the risk of that opportunity not becoming reality.
Example: I'll emigrate to another country because I think this will give me the opportunity for a better life, but what if in doing so my life doesn't get better? So the opportunity mathematically is a risk until it becomes reality.
Risk - Which is something where you are not sure about achieving success or profit.
Opportunity - there is saying that the higher the risk the bigger the opportunity.
There is always the chance of failure in all tasks, but that does not mean you should not take risk. This is because opportunities are hidden in risk only.
First, a project is not a leisure activity. It is not free time that you spend with friends. If you start a project and you don't complete it, it is a failure. You have a deadline and a budget to respect.
Second, risk goes with uncertainty. When you start of project, there is many things that are not sure or unknown. You have to evaluate before starting your project that you will not do a deficit (go under), if too many surprises arrive.
Third, an opportunity is a positive thing. It is a person, an event, a technical breakthrough, for example, that permit you to realize what you planed to do. It is a door that opens.
Finally, it is not because you have an opportunity that the success is assured. It is not because you have risks that your project will fail. Managing is all about, day by day, doing the most you can to achieve your goal. Business administration is to plan, to organize, to lead and to evaluate/control. Having a training in business administration and/or a degree give you skills and forge your decision making in the right way.
Review the section Action vs. Action Item
State 3 - Risk
State 4 - Opportunity
Four States Requiring Action
What is an Action?
The process of doing something in order to achieve an aim, or meet an objective.
An Action is the highest common factor and central component to any aspect of a project requiring a response in Project Management.
What is an Action Item?
An element of a project that pops up during a project and requires attention and action.
Present problem or event that has already happened, or presently happening (realized risk) already has a negative impact on the project, requiring corrective action to be taken
2) Action Item
A maintenance part of a project that occurs during the during a project life cycle and requires attention and maintenance action
An uncertain event or condition that has a negative effect on a project’s objectives.
Possible future beneficial event that an occur and present/future action can that can be taken, that requires one or more actions to be completed, having a potential for gain, or benefit for a project, if pursued.