Risk management is a fascinating topic that can be used in both waterfall and agile projects. We will discuss the definition of risks, whether there are any good risks, and how to deal with risks.
Introduction
Risks are uncertain future events that may or may not occur, Not all risks have a negative effect on the project; occasionally, a risk is regarded as an opportunity with a beneficial effect.
To maximize the possibility of a project’s success, risk management aims to reduce the probability and/or impact of negative risks while increasing the probability and/or impact of positive risks.
Risk management processes include plan risk management, identifying risks, analyzing them, planning, and implementing responses, and monitoring risk throughout the project lifetime.
Risks can often be categorized into two categories based on how they affect as follow:
Individual project risk is an uncertain event that, if it occurs, has a positive or negative impact on one or more project objectives.
Overall project risk is the impact of uncertainty on the entire project, resulting from all sources of uncertainty, including individual risks, which affect the project’s outcome both favorably and unfavorably.
Risks will continue to emerge during the lifetime of the project, so Project Risk Management processes should be conducted iteratively. Risk should also be monitored and managed as the project progresses to ensure that the project stays on track and emergent risks are addressed.
TAILORING CONSIDERATIONS
Because each project is unique, it is necessary to tailor the way Project Risk Management processes are applied. We need to consider many parameters include but are not limited to:
Project size.
complexity of the project.
Project importance.
Development approach.
Risk management in software engineering entails identifying and estimating the possibility of risks according to how they will affect the project.
Due to numerous technical developments and other considerations, there are aspects of uncertainty in every software development project. The success of a software development project is based on how much risk is involved in each project activity.
It is not sufficient to merely be aware of the risks. Project management must recognize, evaluate, rank, and manage all significant risks to be successful.
Now, we will talk about the the six Risk Management processes
Plan Risk Management
this process is meant by defining how to conduct risk management activities for a project.
The main advantage of this process is that it makes sure that risk management is applied in a manner that is proportionate to the risks involved and to how important the project is to the organization and other stakeholders.
When: The project kick-off meeting may include developing the risk management plan, or can be conducted in a separate planning meeting.
Who: Participants may include the project manager, specified project team members, key stakeholders, or team members responsible for overseeing the project’s risk management procedure. Depending on the situation, other parties from outside the company, such as buyers, sellers, and regulators, may also be invited.
to keep using software development as an illustration of what we’re saying. Software development involves a variety of risks. The following are a few samples of risks we should be aware of when completing our plan for risk management:
Risks associated with incorrect estimations in software development
The possibility of scope variations in software development
End-user engagement risk management during software development.
Software development risks related to stakeholder expectations
Following the creation of the necessary plans for risk management, we will discuss how to identify risks.
Identify Risks
the process of figuring out and recording the characteristics of both sources of individual project risks and sources of overall project risk.
Prior to identifying risks, other management plans (such as those for requirements, schedule, cost, etc.) should be in place. Project documentation and agreements are also an excellent source for risk identification.
Project managers should consult experts to assess all facets of individual project risks as well as sources of overall project risk based on their prior experience and areas of specialization. Bias among the specialists must be taken into account in this procedure.
A great place to start when implementing an identifying risk process in software development is by identifying risks that have regularly occurred in previous software projects.
As a result of identifying risks, a list of potential risks is created along with potential risk owner and potential risk response.
A risk owner
A team member who is in charge of planning a suitable risk response and reporting on the management of that risk.
Risk Response: Leadership’s response or action towards the existence of a risk
Main Risk Types in Software Development
We can identify five major risk impact areas for most software development projects every project manager should be aware of:
- Unproven or new technologies
- Functional and user requirements
- Architecture of applications and systems
- Performance
- Organizational
Risk Analysis
There are two types of risk analysis:
Qualitative Risk Analysis
The process of ranking each project risk according to its probability of occurring, and the impact it will have on the project, as well as other characteristics.
Quantitative Risk Analysis
It is the process of numerically analyzing the combined impact of recognized individual project risks and other sources of uncertainty on overall project objectives. Quantitative risk analysis is not necessary for all projects.
The key benefit of this process is that it focuses efforts on high-priority risks. This process is performed throughout the project.
The Risk Analysis process is conducted before the start of each iteration in an agile development environment.
Main result of risk analysis step is the probability and impact matrix.
A probability and impact matrix
A grid for mapping the probability of each risk happening and how it would affect the project’s goals if it occurred (see table below).
This matrix outlines combinations of probability and impact that enable the classification of specific project risks into groups based on their importance.
| Risk No | Problem | Probability of occurrence of problem | Impact of problem | Risk exposure | Priority |
| R1 | Design issues | 2 | 2 | 4 | 10 |
| R2 | Code bugs | 1 | 9 | 9 | 7 |
| R3 | Runtime errors | 2 | 7 | 14 | 5 |
Finally
We’ve come to the end of the first section of our fascinating discussion about risk project management. I talked about what risk is, why not all risks are bad. I talked also about how to prepare for risks, and how to finally identify and analyze risks. Sincerely hope you found this essay to be entertaining and helpful. I’ll see you in the next one soon.
the main resource for this article is the PMBOK 6th Edition. It is available for download on the PMI website.