School of Computing and Information Systems
The University of Melbourne
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2022 – Semester 1 Week 3, Module 1
Software Processes & Project Management
Risk Management
Learning Outcomes
Understand the fundamentals of risk management
Understand the Risk Management Process
Understand how to:
plan risk management activities
identify risks
analyze and assess risks respond to risks (risk strategies) monitor and control risks
SWEN90016 Software Processes and Project Management -2- Risk Management
Learning Outcomes
Understand the fundamentals of risk management
Understand the Risk Management Process
Understand how to:
plan risk management activities
identify risks
analyze and assess risks respond to risks (risk strategies) monitor and control risks
SWEN90016 Software Processes and Project Management -3- Risk Management
What is a risk?
• Ariskisa:
Possible future event that has negative results
Hazard; peril; or exposure to loss or injury
– Webster’s dictionary
An uncertain event or condition that, if it occurs, has a positive or negative effect on the project objectives
• The first two definitions above treat risk and always negative,
whereas the third definition considers positive as well as negative impacts – opportunities (we will stick with the third definition)
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Risk vs Uncertainty
• Risk is different to uncertainty although they are related.
• Uncertainty:
– Lack of complete certainty about an event/outcome – The event/outcome has a probability of less than 1 – E.g. outcome of a sporting event
– Uncertainty that has an impact
– E.g. If you have placed a bet on the sporting event, or have some other personal stake in it, then there is risk associated with the outcome of the sporting event
Risk is a result of uncertainty but not every uncertainty is a risk.
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Why formal Risk Management
• We deal with risks in our lives every day
– e.g. Planning to get to the lecture
• Projects have many possible risks, that could have significant impacts on the outcomes:
– Business risks – Project risks
– Product risks
• A planned Risk Management process is essential
• The goal of project risk management is:
minimising the impact of potential negative risks while maximising the impact of potential positive risks
SWEN90016 Software Processes and Project Management -6- Risk Management
Learning Outcomes
Understand the fundamentals of risk management
Understand the Risk Management Process
Understand how to:
plan risk management activities
identify risks
analyze and assess risks respond to risks (risk strategies) monitor and control risks
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Risk Management Process
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Risk Management Process
– How to approach and plan risk management activities?
• Identify
– Identify the possible risks
• Analyse and Assess (Qualitative and Quantitative): – Identify the relative priorities of the identified risks
• Respond (Action):
– How can we reduce the likelihood or impact of risks?
• Monitor and Control:
– How can we detect the ongoing status of our risks? How can we control them effectively and efficiently?
SWEN90016 Software Processes and Project Management -9- Risk Management
Learning Outcomes
Understand the fundamentals of risk management
Understand the Risk Management Process
Understand how to:
plan risk management activities
identify risks
analyze and assess risks respond to risks (risk strategies) monitor and control risks
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Risk Management Planning
• The output of risk management planning is a Risk Management Plan (RMP) that documents the procedures for managing risks throughout a project
• The project team should review the RMP and understand and implement the organisation’s and the sponsor’s approaches to risk management
• The level of detail will vary with the needs of the project
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Risk Management Plan Template
• The Risk Management Plan
– Methodology
– Roles and Responsibilities – Budget and Schedule
– Risk Categories
– Risk Probability and Impact – Tracking
– Risk Documentation
– Contingency Plans – Fall-back Plans
SWEN90016 Software Processes and Project Management -12- Risk Management
Learning Outcomes
Understand the fundamentals of risk management
Understand the Risk Management Process
Understand how to:
plan risk management activities
identify risks
analyze and assess risks respond to risks (risk strategies) monitor and control risks
SWEN90016 Software Processes and Project Management -13- Risk Management
Characteristics of Risk
• Determine which events should be considered as risks by analysing the following:
– Is the probability of the event occurring greater than zero?
– What is the impact of the event on the project?
– Do we have some degree of control over the event or its outcome?
• Generic Risks:
– Threats or opportunities common to every software project (e.g. staff turnover, budget and schedule pressures)
• Product-specific Risks:
– Threats or opportunities specific to the product, and can only be identified by people who have a clear understanding of the product and technology
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Kinds of Risk
• Project risks
– Affect the planning of the project
e.g. Budget, Schedule, Scope, Personnel, etc.
• Product risks
– Affect the quality or performance of the outcome being
e.g. Design problems, implementation problems, interface problems, maintenance problems, verification problems
• Business risks
– Affect the economic success of the project
e.g. No demand for product, loss of management support, loss of external funding for the project etc.
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References
• Shari L. Pfleeger and Joanne M. Atlee. Software Engineering: Theory and Practice. Prentice–Hall International,
3rd edition, 2006.
• R. S. Pressman. Software Engineering: A Practitioner’s Approach. McGraw Hill, seventh edition, 2009.
• J.T. Marchewka. Information Technology Project Management. & Sons, fourth edition, 2012.
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