RISK MANAGEMENT IN SOFTWARE RISK MANAGEMENT IN SOFTWARE

ENGINEERINGENGINEERING Prepared byPrepared by

Sneha MudumbaSneha Mudumba

• What is a risk?What is a risk?

• What is risk management ?What is risk management ?

• What are the principles by which we can manage risks?What are the principles by which we can manage risks?

• How the Risk management is integrated in project management?How the Risk management is integrated in project management?

• How Risk management is implemented in small projects in a How Risk management is implemented in small projects in a company?company?

• How can we control the risks in a project?How can we control the risks in a project?

What is Risk?What is Risk?

Risk is an uncertainty.Risk is an uncertainty.

We don’t know whether a particular event will occur or no but if it We don’t know whether a particular event will occur or no but if it does has a negative impact on a project.does has a negative impact on a project.

An example would be that team is working on a project and the An example would be that team is working on a project and the developer walks out of project and other person is recruited n his developer walks out of project and other person is recruited n his place and he doesn’t work on the same platform and converts it into place and he doesn’t work on the same platform and converts it into the platform he is comfortable with. Now the project has to yield the the platform he is comfortable with. Now the project has to yield the same result in the same time span. Whether they will be able to same result in the same time span. Whether they will be able to complete the project on time. That is the risk of schedule . complete the project on time. That is the risk of schedule .

Definitions of RisksDefinitions of Risks

Risk is the probability of suffering loss.Risk is the probability of suffering loss.

Risk provides an opportunity to develop the project better.Risk provides an opportunity to develop the project better.

Risk exposure= Size (loss)* probability of (loss)Risk exposure= Size (loss)* probability of (loss)

There is a difference between a Problem and RiskThere is a difference between a Problem and Risk

Problem is some event which has already occurred but risk is Problem is some event which has already occurred but risk is something that is unpredictable.something that is unpredictable.

Risk managementRisk management

The Risks we encounter in a project should be resolved so that we The Risks we encounter in a project should be resolved so that we are able to deliver the desired project to the customer.are able to deliver the desired project to the customer.

The project should be managed in such a way that the risks don’t The project should be managed in such a way that the risks don’t affect the project in a big way.affect the project in a big way.

The art of managing of the risks effectively so that the WIN-WIN The art of managing of the risks effectively so that the WIN-WIN situation and friendly relationship is established between the team situation and friendly relationship is established between the team and the customer is called Risk Management. and the customer is called Risk Management.

By using various paradigms, principles we can manage the risks.By using various paradigms, principles we can manage the risks.

The Principles of Risk ManagementThe Principles of Risk Management 1.Global Perspective: In this we look at the larger system definitions, design and 1.Global Perspective: In this we look at the larger system definitions, design and

implementation. We look at the opportunity and the impact the risk is going to implementation. We look at the opportunity and the impact the risk is going to have .have .

2.Forward Looking View: Looking at the possible uncertainties that might creep up. 2.Forward Looking View: Looking at the possible uncertainties that might creep up. We also think for the possible solutions for those risks that might occur in the future.We also think for the possible solutions for those risks that might occur in the future.

3.Open Communication: This is to enable the free flow of communication between 3.Open Communication: This is to enable the free flow of communication between in the customers and the team members so that they have clarity about the risks.in the customers and the team members so that they have clarity about the risks.

4.Integrated management: In this phase risk management is made an integral part 4.Integrated management: In this phase risk management is made an integral part of project management.of project management.

5.Continous process :In this phase the risks are tracked continuously throughout 5.Continous process :In this phase the risks are tracked continuously throughout the risk management paradigm.the risk management paradigm.

Risk management paradigmRisk management paradigm

1.Identify: Search for the risks before they 1.Identify: Search for the risks before they create a major problemcreate a major problem

2.Analyze: understand the nature , kind of risk 2.Analyze: understand the nature , kind of risk and gather information about the risk.and gather information about the risk.

3.Plan: convert them into actions and 3.Plan: convert them into actions and implement them.implement them.

4.Track: we need to monitor the necessary 4.Track: we need to monitor the necessary actions.actions.

5.Control: Correct the deviation and make any 5.Control: Correct the deviation and make any necessary amendments.necessary amendments.

6.Communicate: Discuss about the emerging 6.Communicate: Discuss about the emerging risks and the current risks and the plans to be risks and the current risks and the plans to be undertaken.undertaken.

Risk Management in Project management:Risk Management in Project management:

Basically project management deals with following :Basically project management deals with following :

1. Planning: Looking for the desired results, the strategies to be 1. Planning: Looking for the desired results, the strategies to be applied.applied.

2. Organizing: Getting all the things together so that the desired 2. Organizing: Getting all the things together so that the desired results are obtained. By organizing the efficiency is increased and lot results are obtained. By organizing the efficiency is increased and lot of time is saved.of time is saved.

3. Directing: Communication takes place and exchange of ideas is 3. Directing: Communication takes place and exchange of ideas is formatted in this phase.formatted in this phase.

4. Controlling: In the last phase feedback and evaluation is done.4. Controlling: In the last phase feedback and evaluation is done.

Team Risk Management PrinciplesTeam Risk Management Principles The two principles are:The two principles are:

1. Shared Product Vision: The common goal 1. Shared Product Vision: The common goal between the team and the supplier is between the team and the supplier is established so that the vision is very lucid.established so that the vision is very lucid.

2. Team work: Working collectively towards 2. Team work: Working collectively towards achieving a common goal.achieving a common goal.

The additional two principles will be added to The additional two principles will be added to the above five principles:the above five principles:

The Best way to snub the risks to some The Best way to snub the risks to some extent is to involve the customers right from extent is to involve the customers right from the beginning and build a team oriented the beginning and build a team oriented approach .approach .

In this way the team risk management In this way the team risk management principles will help to tackle the risks better.principles will help to tackle the risks better.

Risk Management In Small Project:Risk Management In Small Project:

1.Preparing for Risks1.Preparing for Risks: Looking for the external and internal Risks :: Looking for the external and internal Risks : Uncertain requirementsUncertain requirements Unknown technologyUnknown technology Infeasible DesignInfeasible Design Cost And Schedule uncertainty.Cost And Schedule uncertainty.

2.Identify and Analyze Risks: 2.Identify and Analyze Risks: We need to identify the risks and We need to identify the risks and understand the nature of risks and prioritize the risks and try to solve understand the nature of risks and prioritize the risks and try to solve the risks.the risks.

33.Mitigate the risks.Mitigate the risks: In this phase we have risk acceptance, risk : In this phase we have risk acceptance, risk transfer, risk avoidance, risk control. We implement them in this transfer, risk avoidance, risk control. We implement them in this phase so that we can mitigate the risks.phase so that we can mitigate the risks.

ExampleExample

How To Manage the RisksHow To Manage the Risks

1.Determine risk sources and 1.Determine risk sources and Categories.Categories.

2.Determine Risk Parameters2.Determine Risk Parameters3.Establish a Risk Management 3.Establish a Risk Management

StrategyStrategy4.Identify Risks4.Identify Risks5.Evaluate and prioritize the risks.5.Evaluate and prioritize the risks.6.Develop and Implement Risk 6.Develop and Implement Risk

mitigation plansmitigation plans

To manage the risks we need to establish a strong bond between the To manage the risks we need to establish a strong bond between the customers and the team members.customers and the team members.

A strong base about risk management would help a great deal in A strong base about risk management would help a great deal in tackling the risks. tackling the risks.

Software metrics and tools can be developed to manage the risks.Software metrics and tools can be developed to manage the risks.

Risk necessarily need not be negative and it can be viewed as an Risk necessarily need not be negative and it can be viewed as an opportunity to develop our projects in a better way.opportunity to develop our projects in a better way.

ConclusionConclusion

Thank youThank you