Presentation on theme: "Types of Risks 1.Project risks –Impact schedule and cost –Includes budgetary, schedule, personnel, resource, customer, requirement problems 2.Technical."— Presentation transcript:
Types of Risks 1.Project risks –Impact schedule and cost –Includes budgetary, schedule, personnel, resource, customer, requirement problems 2.Technical risks –Impact the quality, timelines, and cost –Implementation may become difficult or impossible –Includes design, implementation, interface, verification and maintenance problems –Arise due to leading edge technology
Types of Risks 3.Business risks –Marketability –Alignment with the overall business strategy –How to sell –Budget or personnel commitments
Risk Identification Identify known and predictable risks Generic risks and product specific risks Generic risks – threats to every project Product specific risks – what special characteristics of this project may threaten your project plan? Risk item checklist
Risk Item Checklist Product size Business impact Customer characteristics Process definition Development environment Technology to be built Staff size and experience Questions relevant to each of the topics can be answered for each software project
Assessing Overall Project Risks Have top software and customer managers formally committed to support the project? Are end-users committed to the project and the system/product to be built? Are requirements fully understood? Have customers been involved fully in requirement definition? Do end-users have realistic expectations?
Assessing Overall Project Risks Does the software team have right mix of skills? Are project requirements stable? Does the project team have experience with the technology to be implemented? Is the number of people on the project team adequate to do the job?
Risk components and drivers 1.Performance risks –Degree of uncertainty that the product will meet its requirements and be fit for its intended use 2.Cost risks –The degree of uncertainty that the project budget will be maintained 3.Support risks –Resultant software will be easy to correct, enhance, and adapt
Risk components and drivers 4.Schedule risks –Product schedule will be maintained Four impact categories 1.Negligible 2.Marginal 3.Critical 4.Catastrophic
PerformanceSupportCostSchedule CatastrophicFailure to meet the requirements will result in mission failure Results in increased cost and schedule delays. Expected value in excess of $500K Significant degradation Non-responsive or unsupportable Budget overrun likely Unachievable CriticalWould degrade performance to a point where mission success is questionable Results in operational delays and or increased cost with expected value of $100K-$500K Some reduction in technical performance Minor delaysPossible overrunPossible slippage MarginalResult in degradation of secondary mission Expected value <$100K Small reductionResponsiveSufficient financial resources Realistic NegligibleInconvenienceMinor No reductionSupportableBudget under run possible Achievable Row 1 – Consequences of errors Row 2–Failure to achieve desired outcome
Risk Projection Concerned with risk estimation –Attempts to rate risks in two ways Likelihood and consequences –Four risk projection activities Establish a scale that reflects the perceived likelihood of risk Delineate the consequences Estimate impact Note the overall accuracy of risk projection
RiskCategoryProbabilityImpactRMMM Size estimate may be significantly low Larger number of users than planned Less reuse than planned End-users resist system Delivery deadline will be tightened Funding will be lost Customer will change requirements Technology will not meet expectations Lack of training on tools Staff inexperienced Staff turnover will be high PS BU CU PS TE DE ST 60% 30% 70% 40% 50% 40% 80% 30% 80% 30% 60% 2323212132223232121322 1: Catastrophic2: Critical3: Marginal4: Negligible Risk mitigation, monitoring, and management plan