CS605 Final Term Highlighted Handouts Set 2 by Masters

A risk analysis involves quantifying degree of uncertainty of the risk and loss associate with it. In this regards, the PM tries to find answers to the following questions:

What can go wrong?

What is the likelihood of it going wrong?

What will the damage be?

What can we do about it?

Types of Risks

Final Term Highlighted Handouts by Masters Each project is faced with many types of risks. These include:

Project risks Will impact schedule and cost Includes budgetary, schedule, personnel, resource, customer, requirement problems Technical risks Impact the quality, timelines, and cost Implementation may become difficult or impossible Includes design, implementation, interface, verification and maintenance problems Leading edge technology Business risks Marketability Alignment with the overall business strategy How to sell Losing budget or personnel commitments

Furthermore, there are predictable and unpredictable risks. Predictable risks can be uncovered after careful evaluation whereas unpredictable risks cannot be identified.

Risk Identification

It is the responsibility of the project manager to identify known and predictable risks. These risks fall in the following categories of generic risks and product specific risks. Generic risks are threats to every project whereas Product specific risks are specific to a particular project. The question to be asked in this context is: what special characteristics of this project may threaten your project plan? A useful technique in this regards is the preparation of a risk item checklist. This list tries to ask and answer questions relevant to each of the following topics for each software project:

Product size Business impact Customer characteristics Process definition Development environment Technology to be built Staff size and experience

Assessing Overall Project Risks

In order to assess the overall project risks, the following questions need to be addressed:

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?

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

Each risk has many components and forces behind them. From this perspective, risks can be categorized into the following categories:

Performance risks Degree of uncertainty that the product will meet its requirements and be fit for its intended use Cost risks The degree of uncertainty that the project budget will be maintained Support risks Resultant software will be easy to correct, enhance, and adapt Schedule risks Product schedule will be maintained Each risk has its own impact and can be characterized as negligible, marginal, critical, or

This is summarized in the following table:

PerformanceSupport · Cost · Schedule

Catastrophic Consequence of error Failure to meet the requirements will result in mission failure Results in increased cost and schedule delays. Expected value in excess of $500K Consequence of failure to

result Significant degradation Nonresponsive or unsupportable Budget overrun likely Unachievable

Critical

Consequence of error Would degrade performance to a point where mission success is questionable Results in operational delays and or increased cost with expected value of $100K-$500K Consequence of failure to

result Some reduction in technical performance Minor delays Possible overrun Possible slippage

Marginal

Consequence of error Result in degradation of secondary mission Expected value <$100K

Consequence of failure to

result Small reduction Responsive Sufficient financial resources Realistic

Consequence of error Inconvenience Minor

Consequence of failure to No reduction Supportable Budget under run achievable Marginal minor and not important

risk—the chance that a large number of people will suffer a given level of harm.