Risk Management

If you don’t actively attack your risks,

they will attack you!
(Tom Gilb)

1
 Risk Management

• Risk is an expectation of loss, a potential problem that may or may not

occur in the future. It is generally caused due to lack of information,
control or time
• Sometime Loss in software development process is called a software
risk
• Loss can be anything, increase in production cost, development of
poor quality software, not being able to complete the project on time

2
 Common Risks

• Staff Turnover: Experienced staff will leave the project before it is finish

• Management Change: There will be a change of organizational

management with different priorities

• Hardware Unavailability: Hardware that is essential for the project will

not be delivered on schedule

• Requirement change: Large number of changes occurs in requirements

3
 Common Risks

• Size Underestimate : The size of the system has been

underestimated

• Technology change: The technology on which the system is built is

superseded by new technology

• Product Competition: A competitive product is marketed before

the system is completed

4
 Categories of Risk
• There are three related categories of Risk.
• Project Risks
• Risks that affect the project schedule or resources is called Project
Risk.
• For example, if an experienced programmer leaves a project , this
can be a Project Risk .
• Finding a replacement programmer with appropriate skills and
experience may take a long time and then, the software design will
take longer to complete.

5
 Categories of Risk
Product Risks
• Product Risks that affect the quality or performance of the
software being developed.
• New Technologies used in the product; for example, a new DB
server, a new programming language etc.

Business Risks
• Business Risks that affect the organization developing
• For example, a competitor introducing a new product is a
Business Risk

6
 Risk Management
Risk Management
Risk management is one of the most important jobs for a project
manager
Risk management involves anticipating risks that might affect the
project schedule or the quality of the software being developed, and
then taking action to avoid these risks

• It is a set of practices and support tools to identify, analyze, and treat

risks clearly
• Risk management tries to reduce the chance of a risk which occur
and the impact (loss) caused by risks

7
 Risk Management
Purpose of Risk Management
• • Identify risk
• • Minimize the impact / damage / loss
• • Reduce the probability
• • Monitor risk areas for early detection
• • Ensure management awareness of risks
General Causes of Risk
It is impossible, for complex systems, to know everything before it
happens.
• Lack of Information
• Lack of Control
• Lack of Time 8
 Risk Management Process

• The Risk Management Process is an iterative process that

continues throughout the project
• Risk Management Process involves the following stages:

Risk
Risk Analysis Risk Planning Risk Monitoring
Identification

9
 Risk Management Process
• Risk Identification: Risk identification is the first stage of the
risk management process.
• In this stage, possible Project, Product and Business Risks
are identified.
• It is concerned with identifying the risks, that could be major
threat to the software engineering process.
• Risk identification may be a team process where a team get
together to brainstorm possible risks. Alternatively, the project
manager may simply use his or her experience to identify the
most critical risks.

10
 Risk Management Process
• In risk identification, a checklist of different types of risk may be
used.
• There are at least six types of risk that may be included in a risk
checklist:
1. Technology risks:
2. People risks:
3. Organizational risks: Risks that derive from the
organizational environment.
4. Tools risks:
5. Requirements risks :
6. Estimation risks:
11
Risk Management Process
• Risk Analysis: Software Risk analysis is a very important aspect
of risk management

• In previous phase the risk is identified and in this phase the risk
are categorized. After the categorization of risk, the level,
likelihood (percentage) and impact of the risk is analyzed

• Likelihood is defined in percentage after examining what are the

chances of risk to occur due to various technical conditions

12
 Risk Management Process

These technical conditions can be:

• Complexity of the technology

• Clashes within the team

• Teams being distributed over a large geographical area

• Usage of poor quality testing tools

13
 Risk Management Process

• Risk Planning:
• The risk planning process considers each of the key risks that have been
identified, and develops strategies to manage these risks.
• For each of the risks, you have to take actions to minimize the
disruption to the project.
• You should make plans to address the risk, either by avoiding it or
minimizing its effects on the project.
• You should adopt that strategy that ensures reliability, security, and
safety.

14
 Risk Management Process
Risk Monitoring:
• Risk monitoring is the process of checking that your expectations
about the Product, Process, and Business risks have not changed

• You should regularly assess/measure the risk and your plans for risk
mitigation (justification) and revise these when learn more about the
risk

• Software risk monitoring is integrated into project activities and

regular checks are conducted on top risks. Software risk monitoring
comprises of

15
 Risk Management Process

• Tracking of risk plans for any major changes in actual plan

• Preparation of status reports for project management.
• Regularly search for new risks

16
 Types Of Risks
Schedule Risk :
This is the risk associated with the time schedules. It directly affect the
economy & reputation of company.
Reasons:
• • Wrong time estimation
• • Unexpected Project extension
• • Late identification of complex functionalities

17
 Types Of Risks
Budget Risk:
The risk of budget schedule slip.
Reasons:
• •Wrong Budget estimation
• • Cost overruns
• • Project scope extension

18
 Types Of Risks
Technical risks:
These kind of risks are relevant to function of the systems and
performance of the system as name tells these are technical risks.
Reasons:
• • Continuous requirements changing
• • If the project is complex to implement
• • Module Integration

19
 Types Of Risks
Programmatic Risks:
These are external risks, these risks affect the software projects
externally.
Reasons:
• • Running out of fund
• • Changing the customer priorities
• • Government rule changes

20
Thank You

21