16-07-2012, 04:30 PM
Risk Management
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Definition of Risk
A risk is a potential problem – it might happen and it might not
Conceptual definition of risk
Risk concerns future happenings
Risk involves change in mind, opinion, actions, places, etc.
Risk involves choice and the uncertainty that choice entails
Two characteristics of risk
Uncertainty – the risk may or may not happen, that is, there are no 100% risks (those, instead, are called constraints)
Loss – the risk becomes a reality and unwanted consequences or losses occur
Risk Categorization – Approach
Project risks
They threaten the project plan
If they become real, it is likely that the project schedule will slip and that costs will increase
Technical risks
They threaten the quality and timeliness of the software to be produced
If they become real, implementation may become difficult or impossible
Business risks
They threaten the viability of the software to be built
If they become real, they jeopardize the project or the product
Steps for Risk Management
Identify possible risks; recognize what can go wrong
Analyze each risk to estimate the probability that it will occur and the impact (i.e., damage) that it will do if it does occur
Rank the risks by probability and impact - Impact may be negligible, marginal, critical, and catastrophic
Develop a contingency plan to manage those risks having high probability and high impact