2. Management

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

4. Identify a risk you took today!

5. 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 .

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

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

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

9. 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.

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

11. 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

12. Risk Identification
Worksheet1

13. 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%)

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

15. 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

16. 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.

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

18. Risk Management Process Application Question
Worksheet2