Management

What is a risk? A risk is simply a probability that some adverse circumstance will actually occur.

Identify a risk you took today!

Risks in software development Who is responsible for managing risk in the development of a software product? It is the project manager’s responsibility to take actions to avoid risks .

Why should risks be considered? Risks might affect:- the project schedule or the quality of the software being developed

Why are software projects risky ? Loosely defined requirements Requirements changes due to changes in customer needs

Why are software projects risky ? Difficulties in estimating the time Difficulties in estimating resources Dependence on individual skills

Risk Management Identifying risks and drawing up plans to minimize their effect on the project is called risk management. (Hall 1998) It is an iterative process which continues throughout the project.

The Process of Risk Management Risk Identification Risk Monitoring Risk Analysis Risk Management Risk Planning

Risk Identification Possible project, product and business risks are identified. 1. PROJECT RISKS: - affect the project schedule or resources 2. PRODUCT RISKS: - affect the quality or performance of the software being developed 3. BUSINESS RISKS: - affect the organization developing or procuring the software

Risk Identification Worksheet1

Risk Analysis This is the stage in which the likelihood and consequences of risks are assessed. The probability of the risk might be assessed as: (i) Very low (< 10 %) (ii) Low (10 – 25 %) (iii) Moderate (25-50%) (iv) High (50-75%) (v) Very high (>75%)

Risk Analysis The effects of the risk might be assessed as: - (i) Insignificant (ii) Tolerable (iii) Serious (iv) Catastrophic

Risk Probability Effect Organizational financial problems force reductions in the project budget Low Catastrophic It is impossible to recruit staff with the skills required for the project High Key staff are ill at critical times in the project Moderate Serious

Risk Planning Plans to address the risk either by avoiding it or minimizing its effects on the project is drawn up. Avoidance strategies: - the probability that the risk will arise will be reduced. Minimization strategies: - the impact of the risk will be reduced. Contingency plans: - if the worst happens you are prepared for it and have a strategy in place to deal with it.

Risk Monitoring The risk is constantly assessed and plans for risk mitigation are revised as more information about the risk becomes available.

Risk Management Process Application Question Worksheet2