unit 7 risk
TRANSCRIPT
1
Chapter 25Chapter 25Risk ManagementRisk Management
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
2
Project RisksProject Risks
What can go wrong?What can go wrong?What is the likelihood?What is the likelihood?What will the damage be?What will the damage be?What can we do about it?What can we do about it?
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
3
Reactive Risk ManagementReactive Risk Management
project team reacts to risks when they occurproject team reacts to risks when they occurmitigationmitigation——plan for additional resources in plan for additional resources in
anticipation of fire fightinganticipation of fire fightingfix on failurefix on failure——resource are found and resource are found and
applied when the risk strikesapplied when the risk strikescrisis managementcrisis management——failure does not respond failure does not respond
to applied resources and project is in dangerto applied resources and project is in danger
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
4
Proactive Risk ManagementProactive Risk Management
formal risk analysis is performedformal risk analysis is performedorganization corrects the root causes of riskorganization corrects the root causes of risk
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
Risk involves two characteristics:Risk involves two characteristics:UncertaintyUncertaintyLossLoss
5
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
Project risks: threaten the project plan: schedule and costProject risks: threaten the project plan: schedule and costPotential budgetary, schedule, personnel, resource, stakeholder,Potential budgetary, schedule, personnel, resource, stakeholder,and requirements problemsand requirements problems
Technical risks: threaten the quality and appropriatenessTechnical risks: threaten the quality and appropriatenessPotential design, implementation, interface, verification, and Potential design, implementation, interface, verification, and maintenance problems + technical uncertainty (leading edge)maintenance problems + technical uncertainty (leading edge)
Business risks: threaten the practicalityBusiness risks: threaten the practicality
6
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
Business risks: threaten the practicalityBusiness risks: threaten the practicalityMarket risk: no one really wantsMarket risk: no one really wantsStrategic risk: no longer fits into the overall business strategStrategic risk: no longer fits into the overall business strategy for y for companycompanySales risk: sales force doesnSales risk: sales force doesn’’t understand how to sellt understand how to sellManagement risk: losing the support of managementManagement risk: losing the support of managementBudget risk: losing budgetaryBudget risk: losing budgetaryPersonal risk: losing personnel commitment Personal risk: losing personnel commitment
7
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
8
Seven Principles of SEI Seven Principles of SEI (Software Engineering Institute)(Software Engineering Institute)
for effective risk managementfor effective risk managementMaintain a global perspectiveMaintain a global perspective
view software risks within the context of system and the businesview software risks within the context of system and the business problem s problem
Take a forwardTake a forward--looking viewlooking viewthink about the risks that may arise in the future; establish cthink about the risks that may arise in the future; establish contingency plans ontingency plans
Encourage open communicationEncourage open communicationif someone states a potential risk, donif someone states a potential risk, don’’t discount it. t discount it.
IntegrateIntegratea consideration of risk must be integrated into the software proa consideration of risk must be integrated into the software processcess
Emphasize a continuous processEmphasize a continuous processthe team must be alert throughout the software process, the team must be alert throughout the software process, modifying identified risks as more information is known and addimodifying identified risks as more information is known and adding new ones ng new ones as better insight is achieved.as better insight is achieved.
Develop a shared product visionDevelop a shared product visionif all stakeholders share the same vision of the software, it liif all stakeholders share the same vision of the software, it likely that better risk kely that better risk identification and assessment will occur.identification and assessment will occur.
Encourage teamworkEncourage teamworkthe talents, skills and knowledge of all stakeholder should be pthe talents, skills and knowledge of all stakeholder should be pooledooled
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
9
RISK
Risk Management ParadigmRisk Management Paradigm
controlcontrol
identifyidentify
analyzeanalyzeplanplan
tracktrack
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
10
Risk Identification: check listRisk Identification: check listProduct size: Product size:
the overall size of the software to be built or modified.the overall size of the software to be built or modified.
Business impact :Business impact :constraints imposed by management or the marketplace.constraints imposed by management or the marketplace.
Customer characteristics Customer characteristics the sophistication of the customer and the sophistication of the customer and the developer's ability to communicate with the customer in a tithe developer's ability to communicate with the customer in a timely manner.mely manner.
Process definitionProcess definitionthe degree to which the software process has been defined and the degree to which the software process has been defined and is followed by the development organization.is followed by the development organization.
Development environment: Development environment: the availability and quality of the tools to be used to build ththe availability and quality of the tools to be used to build the product.e product.
Technology to be builtTechnology to be builtcomplexity of the system to be built and complexity of the system to be built and the "newness" of the technology that is packaged by the system.the "newness" of the technology that is packaged by the system.
Staff size and experience:Staff size and experience:the overall technical and project experience of the software engthe overall technical and project experience of the software engineers who will ineers who will do the work.do the work.
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
11
Assessing Project RiskAssessing Project Risk--II
Have top software and customer managers formally Have top software and customer managers formally committed to support the project?committed to support the project?Are endAre end--users enthusiastically committed to the project users enthusiastically committed to the project and the system/product to be built?and the system/product to be built?Are requirements fully understood by the software Are requirements fully understood by the software engineering team and their customers?engineering team and their customers?Have customers been involved fully in the definition of Have customers been involved fully in the definition of requirements?requirements?Do endDo end--users have realistic expectations?users have realistic expectations?
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
12
Assessing Project RiskAssessing Project Risk--IIII
Is project scope stable?Is project scope stable?Does the software engineering team have the right mix Does the software engineering team have the right mix of skills?of skills?Are project requirements stable?Are project requirements stable?Does the project team have experience with the Does the project team have experience with the technology to be implemented?technology to be implemented?Is the number of people on the project team adequate to Is the number of people on the project team adequate to do the job?do the job?Do all customer/user constituencies agree on the importance of the project and on the requirements for the system/product to be built?
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
13
Risk ComponentsRisk Components(US Air Force)(US Air Force)
performance riskperformance risk——the degree of uncertainty that the the degree of uncertainty that the product will meet its requirements and be fit for its product will meet its requirements and be fit for its intended use.intended use.cost riskcost risk——the degree of uncertainty that the project the degree of uncertainty that the project budget will be maintained.budget will be maintained.support risksupport risk——the degree of uncertainty that the resultant the degree of uncertainty that the resultant software will be easy to correct, adapt, and enhance.software will be easy to correct, adapt, and enhance.schedule riskschedule risk——the degree of uncertainty that the project the degree of uncertainty that the project schedule will be maintained and that the product will be schedule will be maintained and that the product will be delivered on time.delivered on time.
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
Risk category:Risk category:CatastrophicCatastrophicCriticalCriticalMarginal Marginal Negligible Negligible
A table based on components and categories: Fig. 25A table based on components and categories: Fig. 25--11
14
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
15
Risk ProjectionRisk Projection
Risk projectionRisk projection, also called , also called risk estimation,risk estimation, attempts to rate attempts to rate each risk in two wayseach risk in two ways
the likelihood or probability that the risk is real the likelihood or probability that the risk is real the consequences of the problems associated with the risk, the consequences of the problems associated with the risk, should it occur. should it occur.
The are four risk projection steps:The are four risk projection steps:establish a scale that reflects the supposed likelihood of a risestablish a scale that reflects the supposed likelihood of a riskkdefine the consequences of the riskdefine the consequences of the riskestimate the impact of the risk on the project and the product,estimate the impact of the risk on the project and the product,note the overall accuracy of the risk projection so that there wnote the overall accuracy of the risk projection so that there will be ill be no misunderstandings.no misunderstandings.
Helps to prioritize risksHelps to prioritize risks
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
16
Building a Risk TableBuilding a Risk Table
RiskRisk ProbabilityProbability ImpactImpact RMMMRMMM
RiskRiskMitigationMitigationMonitoringMonitoring
& & ManagementManagement
Larger number of users than planned
Staff inexperienced
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
17
Building the Risk TableBuilding the Risk Table
Estimate the Estimate the probabilityprobability of occurrenceof occurrenceEstimate the Estimate the impactimpact on the project on a scale of 1 on the project on a scale of 1 to 5, whereto 5, where
1 = low impact on project success1 = low impact on project success5 = catastrophic impact on project success5 = catastrophic impact on project success
sort the table by probability and impactsort the table by probability and impact
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
18
Risk ExposureRisk Exposure
The overall risk exposure, RE, is determined using the following relationship [HAL98]:
RE = P x C
where P is the probability of occurrence for a risk, and C is the cost to the project if the risk occur.
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
19
Risk Exposure ExampleRisk Exposure Example
Risk identification.Risk identification. Only 70 percent of the software components scheduled Only 70 percent of the software components scheduled for reuse will, in fact, be integrated into the application. Thefor reuse will, in fact, be integrated into the application. The remaining remaining functionality will have to be custom developed.functionality will have to be custom developed.Risk probability.Risk probability. 80% (likely).80% (likely).Risk impact.Risk impact. 60 reusable software components were planned. If only 70 60 reusable software components were planned. If only 70 percent can be used, 18 components would have to be developed frpercent can be used, 18 components would have to be developed from om scratch (in addition to other custom software that has been schescratch (in addition to other custom software that has been scheduled for duled for development). Since the average component is 100 LOC and local ddevelopment). Since the average component is 100 LOC and local data ata indicate that the software engineering cost for each LOC is $14.indicate that the software engineering cost for each LOC is $14.00, the 00, the overall cost (impact) to develop the components would be 18 x 10overall cost (impact) to develop the components would be 18 x 100 x 14 = 0 x 14 = $25,200.$25,200.Risk exposure. Risk exposure. RE = 0.80 x 25,200 ~ $20,200.RE = 0.80 x 25,200 ~ $20,200.
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
20
mitigationmitigation——how can we avoid the risk?how can we avoid the risk?monitoringmonitoring——what factors can we track that will what factors can we track that will enable us to determine if the risk is becoming more enable us to determine if the risk is becoming more or less likely?or less likely?managementmanagement——what contingency plans do we have what contingency plans do we have if the risk becomes a reality?if the risk becomes a reality?
Risk Mitigation, Monitoring,Risk Mitigation, Monitoring,and Management and Management
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
21
Risk Due to Product SizeRisk Due to Product Size
•• estimated size of the product in LOC or FP?estimated size of the product in LOC or FP?
•• estimated size of product in number of programs, estimated size of product in number of programs, files, transactions?files, transactions?
•• percentage deviation in size of product from percentage deviation in size of product from average for previous products?average for previous products?
•• size of database created or used by the product?size of database created or used by the product?
•• number of users of the product?number of users of the product?
•• number of projected changes to the requirements number of projected changes to the requirements for the product? before delivery? after delivery?for the product? before delivery? after delivery?
•• amount of reused software?amount of reused software?
Attributes that affect risk:Attributes that affect risk:
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
22
Risk Due to Business ImpactRisk Due to Business Impact
•• affect of this product on company revenue?affect of this product on company revenue?•• visibility of this product by senior management?visibility of this product by senior management?•• reasonableness of delivery deadline?reasonableness of delivery deadline?
•• number of customers who will use this product number of customers who will use this product
•• interoperability constraintsinteroperability constraints
•• sophistication of end users?sophistication of end users?•• amount and quality of product documentation that amount and quality of product documentation that must be produced and delivered to the customer?must be produced and delivered to the customer?
•• governmental constraintsgovernmental constraints•• costs associated with late delivery?costs associated with late delivery?•• costs associated with a defective product?costs associated with a defective product?
Attributes that affect risk:Attributes that affect risk:
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
23
Risks Due to the CustomerRisks Due to the Customer
•• Have you worked with the customer in the past?Have you worked with the customer in the past?•• Does the customer have a solid idea of requirements?Does the customer have a solid idea of requirements?•• Has the customer agreed to spend time with you? Has the customer agreed to spend time with you? •• Is the customer willing to participate in reviews?Is the customer willing to participate in reviews?
•• Is the customer technically sophisticated?Is the customer technically sophisticated?
•• Is the customer willing to let your people do their Is the customer willing to let your people do their jobjob——that is, will the customer resist looking over your that is, will the customer resist looking over your shoulder during technically detailed work?shoulder during technically detailed work?•• Does the customer understand the software Does the customer understand the software engineering process?engineering process?
Questions that must be answered:Questions that must be answered:
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
24
Risks Due to Process MaturityRisks Due to Process Maturity
•• Have you established a common process framework? Have you established a common process framework? •• Is it followed by project teams?Is it followed by project teams?•• Do you have management support for Do you have management support for software engineering software engineering •• Do you have a proactive approach to SQA? Do you have a proactive approach to SQA? •• Do you conduct formal technical reviews?Do you conduct formal technical reviews?•• Are CASE tools used for analysis, design and Are CASE tools used for analysis, design and testing?testing?•• Are the tools integrated with one another?Are the tools integrated with one another?
•• Have document formats been established?Have document formats been established?
Questions that must be answered:Questions that must be answered:
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
25
Technology RisksTechnology Risks
•• Is the technology new to your organization?Is the technology new to your organization?•• Are new algorithms, I/O technology required?Are new algorithms, I/O technology required?•• Is new or unproven hardware involved?Is new or unproven hardware involved?•• Does the application interface with new software?Does the application interface with new software?•• Is a specialized user interface required? Is a specialized user interface required? •• Is the application radically different?Is the application radically different?•• Are you using new software engineering methods?Are you using new software engineering methods?
•• Are you using unconventional software development Are you using unconventional software development methods, such as formal methods, AImethods, such as formal methods, AI--based approaches, based approaches, artificial neural networks?artificial neural networks?•• Are there significant performance constraints?Are there significant performance constraints?•• Is there doubt the functionality requested is "doIs there doubt the functionality requested is "do--able?"able?"
Questions that must be answered:Questions that must be answered:
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
26
Staff/People RisksStaff/People Risks
•• Are the best people available?Are the best people available?•• Does staff have the right skills?Does staff have the right skills?•• Are enough people available?Are enough people available?•• Are staff committed for entire duration?Are staff committed for entire duration?•• Will some people work part time? Will some people work part time? •• Do staff have the right expectations?Do staff have the right expectations?•• Have staff received necessary training?Have staff received necessary training?•• Will turnover among staff be low?Will turnover among staff be low?
Questions that must be answered:Questions that must be answered:
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net
27
Project:Project: Embedded software for XYZ systemEmbedded software for XYZ systemRisk type: Risk type: schedule riskschedule riskPriorityPriority (1 low ... 5 critical):(1 low ... 5 critical): 44Risk factorRisk factor: : Project completion will depend on tests which require Project completion will depend on tests which require hardware component under development. Hardware component hardware component under development. Hardware component delivery may be delayeddelivery may be delayedProbability:Probability: 60 %60 %ImpactImpact: : Project completion will be delayed for each day that Project completion will be delayed for each day that hardware is unavailable for use in software testinghardware is unavailable for use in software testingMonitoring approachMonitoring approach::
Scheduled milestone reviews with hardware groupScheduled milestone reviews with hardware groupContingency (Emergency) plan:Contingency (Emergency) plan:
Modification of testing strategy to accommodate delay usingModification of testing strategy to accommodate delay usingsoftware simulationsoftware simulation
Estimated resourcesEstimated resources:: 6 additional person months beginning 76 additional person months beginning 7--11--9696
Recording Risk InformationRecording Risk Information
ww
w.jntuw
orld.com
ww
w.jntuw
orld.com
ww
w.jw
jobs.net