Chapter 6 Risk Management

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These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 5/e and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001

Chapter 6Chapter 6Risk Risk

ManagementManagement

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Project RisksProject Risks

What can go wrong?What can go wrong?What is the likelihood?What is the likelihood?What will the damage be?What will the damage be?What can we do about it?What can we do about it?

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Reactive Risk Reactive Risk ManagementManagement

project team reacts to risks when they occurproject team reacts to risks when they occur mitigation—plan for additional resources in mitigation—plan for additional resources in

anticipation of fire fightinganticipation of fire fighting fix on failure—resource are found and applied fix on failure—resource are found and applied

when the risk strikeswhen the risk strikes crisis management—failure does not respond to crisis management—failure does not respond to

applied resources and project is in jeopardyapplied resources and project is in jeopardy

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Proactive Risk Proactive Risk ManagementManagement

formal risk analysis is performedformal risk analysis is performed organization corrects the root organization corrects the root

causes of riskcauses of risk TQM concepts and statistical SQATQM concepts and statistical SQA examining risk sources that lie beyond the examining risk sources that lie beyond the

bounds of the softwarebounds of the software developing the skill to manage change developing the skill to manage change

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RISK

Risk Management Risk Management ParadigmParadigm

controlcontrol

identifyidentify

analyzeanalyze

planplan

tracktrack

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Risk Due to Product Risk Due to Product SizeSize

•• estimated size of the product in LOC or FP?estimated size of the product in LOC or FP?

•• estimated size of product in number of programs,estimated size of product in number of programs, files, transactions?files, transactions?

• • percentage deviation in size of product from percentage deviation in size of product from average for previous products?average for previous products?

• • size of database created or used by the product?size of database created or used by the product?

• • number of users of the product?number of users of the product?

• • number of projected changes to the requirementsnumber of projected changes to the requirements for the product? before delivery? after delivery?for the product? before delivery? after delivery?

• • amount of reused software?amount of reused software?

Attributes that affect risk:Attributes that affect risk:

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Risk Due to Business Risk Due to Business ImpactImpact

• • affect of this product on company revenue?affect of this product on company revenue?• • visibility of this product by senior management?visibility of this product by senior management?• • reasonableness of delivery deadline?reasonableness of delivery deadline?

• • number of customers who will use this product number of customers who will use this product

• • interoperability constraintsinteroperability constraints

• • sophistication of end users?sophistication of end users?

• • amount and quality of product documentation that amount and quality of product documentation that must be produced and delivered to the customer?must be produced and delivered to the customer?

• • governmental constraintsgovernmental constraints

• • costs associated with late delivery?costs associated with late delivery?

• • costs associated with a defective product?costs associated with a defective product?

Attributes that affect risk:Attributes that affect risk:

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Risks Due to the Risks Due to the CustomerCustomer

• • Have you worked with the customer in the past?Have you worked with the customer in the past?

• • Does the customer have a solid idea of requirements?Does the customer have a solid idea of requirements?

• • Has the customer agreed to spend time with you? Has the customer agreed to spend time with you?

• • Is the customer willing to participate in reviews?Is the customer willing to participate in reviews?

• • Is the customer technically sophisticated?Is the customer technically sophisticated?

• • Is the customer willing to let your people do their Is the customer willing to let your people do their job—that is, will the customer resist looking over your job—that is, will the customer resist looking over your shoulder during technically detailed work?shoulder during technically detailed work?

• • Does the customer understand the software Does the customer understand the software engineering process?engineering process?

Questions that must be answered:Questions that must be answered:

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Risks Due to Process Risks Due to Process MaturityMaturity

• • Have you established a common process framework? Have you established a common process framework? • • Is it followed by project teams?Is it followed by project teams?• • Do you have management support for Do you have management support for software engineering software engineering • • Do you have a proactive approach to SQA? Do you have a proactive approach to SQA? • • Do you conduct formal technical reviews?Do you conduct formal technical reviews?

• • Are CASE tools used for analysis, design and Are CASE tools used for analysis, design and testing?testing?• • Are the tools integrated with one another?Are the tools integrated with one another?

• • Have document formats been established?Have document formats been established?


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Technology RisksTechnology Risks

• • Is the technology new to your organization?Is the technology new to your organization?• • Are new algorithms, I/O technology required?Are new algorithms, I/O technology required? • • Is new or unproven hardware involved?Is new or unproven hardware involved?• • Does the application interface with new software?Does the application interface with new software?• • Is a specialized user interface required? Is a specialized user interface required? • • Is the application radically different?Is the application radically different?• • Are you using new software engineering methods?Are you using new software engineering methods?

• • Are you using unconventional software development Are you using unconventional software development methods, such as formal methods, AI-based approaches, methods, such as formal methods, AI-based approaches, artificial neural networks?artificial neural networks?

• • Are there significant performance constraints?Are there significant performance constraints?

• • Is there doubt the functionality requested is "do-able?"Is there doubt the functionality requested is "do-able?"


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Staff/People RisksStaff/People Risks

• • Are the best people available?Are the best people available?• • Does staff have the right skills?Does staff have the right skills?• • Are enough people available?Are enough people available?• • Are staff committed for entire duration?Are staff committed for entire duration?• • Will some people work part time? Will some people work part time? • • Do staff have the right expectations?Do staff have the right expectations?• • Have staff received necessary training?Have staff received necessary training?• • Will turnover among staff be low?Will turnover among staff be low?


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Impact Impact AssessmentAssessment

See Figure 6.1 – impact assessment table

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Building a Risk TableBuilding a Risk Table

RiskRisk ProbabilityProbability ImpactImpact RMMMRMMM

RiskRiskMitigationMitigationMonitoringMonitoring

& & ManagementManagement

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Building the Risk TableBuilding the Risk Table

Estimate the Estimate the probabilityprobability of of occurrenceoccurrence

Estimate the Estimate the impactimpact on the project on the project on a scale of 1 to 5, whereon a scale of 1 to 5, where

1 = low impact on project success1 = low impact on project success 5 = catastrophic impact on project success5 = catastrophic impact on project success

sort the table by probability and sort the table by probability and impactimpact

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Risk Referent Risk Referent LevelLevel

TripletTriplet[ri, li, xi][ri, li, xi]

Ri = riskRi = risk

Li = likelihoodLi = likelihood

Xi = impactXi = impact

Then chart like in Figure 6.4 to decide Then chart like in Figure 6.4 to decide where project termination point iswhere project termination point is

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mitigation—how can we avoid the risk?mitigation—how can we avoid the risk? monitoring—what factors can we track monitoring—what factors can we track

that will enable us to determine if the that will enable us to determine if the risk is becoming more or less likely?risk is becoming more or less likely?

management—what contingency plans management—what contingency plans do we have if the risk becomes a do we have if the risk becomes a reality?reality?

Risk Mitigation, Risk Mitigation, Monitoring,Monitoring,

and Management and Management

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Project:Project: Embedded software for XYZ system Embedded software for XYZ systemRisk type:Risk type: schedule risk schedule riskPriority (1 low ... 5 critical):Priority (1 low ... 5 critical): 4 4Risk factor:Risk factor: Project completion will depend on tests which require Project completion will depend on tests which require hardware component under development. Hardware component hardware component under development. Hardware component delivery may be delayeddelivery may be delayedProbability:Probability: 60 % 60 %Impact: Impact: Project completion will be delayed for each day that Project completion will be delayed for each day that hardware is unavailable for use in software testinghardware is unavailable for use in software testingMonitoring approach:Monitoring approach: Scheduled milestone reviews with hardware groupScheduled milestone reviews with hardware groupContingency plan:Contingency plan: Modification of testing strategy to accommodate delay usingModification of testing strategy to accommodate delay using software simulationsoftware simulationEstimated resources:Estimated resources: 6 additional person months beginning 7-1-96 6 additional person months beginning 7-1-96

Recording Risk Recording Risk InformationInformation

Chapter 6 Risk Management

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