1. University of Sunderland CIFM02 Unit 5 COMM02 Project Hazard Management and Contingency Planning Unit 5

2. University of Sunderland CIFM02 Unit 5 Risk Management Introduction –Will look at the management of risk during the project –risks vary in importance –the importance of a particular risk depends on the project –Risk Management should reduce the danger of risk for the particular project of interest

3. University of Sunderland CIFM02 Unit 5 Risk categories Risk types to be found on Project –those caused by the inherent difficulties of estimation –those due to assumptions made during the planning process –those of unforeseen (or at least unplanned) events occurring

4. University of Sunderland CIFM02 Unit 5 Risk categories Estimation errors –some tasks are easier to estimate than others manual writing is a reasonably straight forward task program testing and debugging may not be –analysing historic data for similar things can help with deciding the level of accuracy to be assigned to a particular estimation

5. University of Sunderland CIFM02 Unit 5 Risk categories Planning errors –assumptions are used when planning, if the assumption are wrong then the plan is at risk e.g. the need for rework may not be planned –when a plan is prepared the assumptions that have been made should listed and details given to the affect on the plan if the assumption are incorrect

6. University of Sunderland CIFM02 Unit 5 Risk categories Eventualities –some eventualities might never be foreseen –it has to be accepted that such eventualities do happen, even if they are rare! –Most unforeseen eventualities generally could have been identified and predicted e.g. the required hardware not arriving on time –plans should be in place to minimise the damage caused by an unforeseen event

7. University of Sunderland CIFM02 Unit 5 Managing risk There are various models of risk management They are generally similar and identify to main elements –risk identification –risk management A popular model is the Boehm Risk Engineering Model

8. University of Sunderland CIFM02 Unit 5 Managing risk Risk engineering Risk analysis Risk identification Risk estimation Risk evaluation Risk management Risk planning Risk control Risk monitoring Risk staffing Risk directing From: Boehm Tutorial on software risk management IEEE computer society 1989

9. University of Sunderland CIFM02 Unit 5 Risk identification Identification of hazards that may affect a project must be the first steps in a risk assessment A hazard is an event that if it occurs may adversely affect the project The risk a hazard presents to a particular project must decided

10. University of Sunderland CIFM02 Unit 5 Risk identification Checklist are often used to help in identifying hazards Knowledge based software is also available to help with the task of hazard identification Some hazards will be generic Other hazards will be project specific

11. University of Sunderland CIFM02 Unit 5 Risk identification Various categories of factors will need to be considered –Application factors the nature of the application –e.g. simple data processing or safety critical system the size of the system –Staff factors e.g. experience and appropriateness of experience skills, turn-over rate, level of absenteeism

12. University of Sunderland CIFM02 Unit 5 Risk identification Project factors –definition of the project –project objectives –team members understanding of the above –project quality plan Project methods –Is a specified and structured method like PRINCE 2 being used

13. University of Sunderland CIFM02 Unit 5 Risk identification Hardware / software factors –the use of new untried hardware carries a higher risk than using existing hardware –where a system is developed on one type of hardware or software platform for use on another, then this will carry higher risks

14. University of Sunderland CIFM02 Unit 5 Risk identification Changeover factor –An instant change over carries greater risks than an incremental change over –Parallel running is desirable but has cost implications Supplier factors –can be difficult to control suppliers e.g. installation of phone lines, delivery of equipment

15. University of Sunderland CIFM02 Unit 5 Risk identification Environmental and social factors –generally outside the control of the project e.g. changes in legislation e.g. public opinion Health and safety factors –not generally a major issue for software project when compared to other engineering projects –still need to be covered to ensure compliance with statutory obligation

16. University of Sunderland CIFM02 Unit 5 Risk analysis Once identified risks should be assessed for their possible affect on the project the level of importance of a risk must also be established this is often done by assessing the risk value

17. University of Sunderland CIFM02 Unit 5 Risk analysis The importance of a risk is known as the risk value or the the risk exposure risk exposure = risk likelihood x risk impact risk likelihood is the probability of hazard occurring risk impact is the effect the resulting problem will have on the project

18. University of Sunderland CIFM02 Unit 5 Risk analysis Risk impact is estimated in monetary terms Risk likelihood is assessed as a probability Risk exposure therefore is an expected cost, in a similar manner to a cost-benefit analysis Ranking schemes can be used to assess impact and likelihood

19. University of Sunderland CIFM02 Unit 5 Risk analysis Impact scores should take account of –the cost of delay to scheduled dates for deliverables –cost overruns caused by using additional or more expensive resources –the costs incurred or implicit in any compromise to the system’s quality or functionality

20. University of Sunderland CIFM02 Unit 5 Risk analysis Part of a risk exposure assessment table Hazard LikelihoodImpact exposure 1Changes to the requirements1 8 8 specification during coding 2Specification take longer than3 7 21 expected 3Staff sickness affecting5 7 35 critical path activities 4Staff sickness affecting10 3 30 non-critical activities

21. University of Sunderland CIFM02 Unit 5 Risk analysis Managing risk involves the use of two strategies –reducing the risk exposure by reducing likelihood and impact –drawing up contingency plans to deal with the risk should it occur All attempts to reduce risk exposure will have a cost Risk reduction work should be prioritised to obtain best value

22. University of Sunderland CIFM02 Unit 5 Risk analysis Factor other than risk exposure that should be taken account of when prioritising risk management –confidence of risk assessment –compound risks –the number of risks –cost of action cost can be compared using risk reduction leverage

23. University of Sunderland CIFM02 Unit 5 Risk analysis Risk reduction leverage (RRL) RRL = REbefore - REafter risk reduction cost where REbefore is the original risk exposure value REafter is the expected value after action

24. University of Sunderland CIFM02 Unit 5 Reducing risks There are five broad categories for risk reduction –hazard prevention –likelihood reduction –risk reduction –risk transfer –contingency planning

25. University of Sunderland CIFM02 Unit 5 Risk Management Risk Planning –preparing contingency plans –large project will use a risk manager to do this Risk Control –minimising the affect caused by the problems occurring

26. University of Sunderland CIFM02 Unit 5 Risk Management Risk monitoring –ongoing assessment of the importance and relevance of particular risks Risk directing and staffing –the day-on-day management of risk –risk aversion and problem solving

27. University of Sunderland CIFM02 Unit 5 Conclusion Risk –Categories –Identification –Analysis –Management