Part 2 - Concepts of risk management

Primary tabs

  1. Goal
  2. Uncertainty
  3. Loss
  4. Time
  5. Choice
  6. Make intelligent decisions
  7. Resolve risk
  8. Prevent problems


Goal: Manage risk
in relation to a specific goal and can affect only the work that remains to
achieve the goal
What is the risk in the plan ?
What is the risk in the remaining
work ?

Well defined goal with measurable success criteria bounds acceptable risk

Uncertainty: Uncertainty
is that which we do not know , inherent in all of our assumptions and the future

> 0 <100

Loss: Unless there is potential for loss there is no risk.
The loss can be either a bad outcome or a lost opportunity. An unsatisfactory
outcome might be a product with an unacceptable latent defect rate, or failure
to meet the desired delivery date. Opportunity is the chance of a good outcome;
opportunity cost is the loss of of a missed opportunity. Opportunity cost can
be calculated in lost customer satisfaction and lost profit.

Time : we need time
to anticipate and prevent problems. Time is a great equalizer because every
day we each have the same amount. Although a valuable resource. We cannot accumulate
time. As time goes by , viable options tend to decrease. By managing risk, we
reduce wasted time by using it to our advantage.

Choice: unless there is a choice there is no risk management.
Sometimes we cannot control risk, or do not feel empowered to select from the
available options. Doing something or doing nothing should be a conscious choice.
Understanding the goal, and the risk of not achieving the goal, helps us to
make the right choice.
we can discover the risk of software risk management
by first defining its goal.

Make intelligent decisions:
we make intelligent decisions based on awareness, insight, and understanding
of risk. Risk management provides a process to communicate risk information
and provide visibility into software risks at all project levels.

Resolve risk: Develop and execute a risk action plan to resolve
risk. The key to resolving risk is finding risk when there is time to take action
and knowing when to accept a risk. Risk resolution strategy is not to minimize
risk alone but to maximize opportunity

Prevent problems: Resolution of software risk prevents problems
and surprises. Risk management is a proactive strategy to reduce the problem
of costly rework.