Overview of risk management

What is a Risk?
“Risk is the potential future harm that may arise from some present action”.
Risk management is an area which aims to solve the problem of identifying &
managing the risk associated with software projects.
The basic goal of risk management is to avoid disasters or heavy losses.
There are two way that software engineer can handle a risk.
1. A reactive software engineer corrects a problem as it occurs.
2. A proactive software engineer starts thinking about possible risks in a project
before they occur.
Types of risk that can occur during a software project development :
Project risk: Project risks are the risk that affect the project schedule or resources.
Example: Staff turnover: An experienced employee leaves the project before its
completion.
Hardware unavailability: Essential hardware is not delivered on time.
Size underestimate: Size of the software system is underestimated.
Requirements change: a large number of changes to the requirements are made.
• Product risk: It affects the quality or performance
of the software being developed.
Example: Specification delays: Essential
specifications are not available on time.
• Business risk: These are the risk that affect the
organization developing or purchasing the
software.
• Example: Technology change: the main
technology on which the system is built is
replaced by new technology.
• Product Competition: a competitor markets a
new product before the software system is
completed.
 Risk management process

• 1. Risk Identification: Project, product and

business risks are identified.
• 2. Risk analysis: Consequences of risks are
assessed.
• 3. Risk planning: Addresses the risk either by
avoiding it or minimizing its effects.
• 4. Risk monitoring: Risk is constantly assessed
and information about the risk becomes
available.
• Step 1: Identify the Risk. It identifies all the possible
project, product and business risks in a particular project.
• Step 2: Analyze the risk. Once risks are identified,
determine the consequence of each risk and the loss that
will occur if that event occurs.
• After this, Risks can be prioritized based on the expected
loss due to different risks.
• Step 3: Risk Planning: Risk identification and analysis
should be done during project planning.
• By performing risk analysis , a properly prioritized list of the
project risks will become available and therefore plans of
avoiding or minimizing the effects of the risks could be
made.
• Step 4: Risk Monitoring: This is also referred to as Risk
Response Planning.
• Risk monitoring must be a continuous process.
• Each identified risk is regularly assessed to check whether
or not the risk becoming more or less probable.
 Process visibility
• The documents after each process in software systems
makes the software process visible.
• Process should not only be designed and implemented, but
should be visible to ensure the best results.
• Processes should be visible to all employees and managers,
who will be able to implement processes effectively.
Steps required for process visibility include:
1. Documentation: It could be a process manual or even a
simple list of tasks that need to be performed.
• This could be a process manual or even a simple list of
tasks that need to be performed. Process documentation
can then be sent to all employees and decision makers who
are involved in implementing the processes, and kept on
record, to be updated as changes are required.
• This will also ensure that there is always proof available,
which aims to foster continuous improvement by ensuring a
set of protocols across the organization.
2. Diagrams: it offers a visual representation of the
process steps, which shows the process in action along
with each step that needs to be performed by various
employees and managers.
• By adding visual representations within the process
documentation, process steps can also be simplified and
made clearer to all involved.
3. Sharing : Total visibility and understanding of
processes is done through training, through tools that make
it easier for employees to access the process and
understand them.
• Professional Responsibility:
1. Confidentiality
2. Competence
3. Intellectual property rights
4. Computer misuse
Software Engineering Code of Ethics and
professional practice