CIF 301 Project Risk Unit 5

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CIF 301 Project Risk Unit 5
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Risk Management

• Introduction
• Will look at the management of risk during the
  project
• risks vary in importance
• the importance of a particular risk depends on
  the project
• Risk Management should reduce the danger of risk
  for the particular project of interest

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Risk categories

• Risk types to be found on Project
• those caused by the inherent difficulties of
  estimation
• those due to assumptions made during the planning
  process
• those of unforeseen events occurring

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Risk categories

• Estimation errors
• some tasks are easier to estimate than others
• analysing historic data for similar things can
  help

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Risk categories

• Planning errors
• assumptions are used when planning
• when a plan is prepared the assumptions that have
  been made should be listed

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Risk categories

• Eventualities
• some eventualities might never be foreseen
• Most unforeseen eventualities generally could
  have been identified and predicted
• plans should be in place to minimise the damage

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Managing risk

• There are various models of risk management
  generally similar
• Identify two main elements
• Popular model is the Boehm Risk Engineering Model

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Managing risk
Risk engineering
Risk analysis
Risk management
Risk identification
Risk estimation
Risk evaluation
From Boehm Tutorial on software risk
management IEEE computer society 1989
Risk planning
Risk control
Risk monitoring
Risk staffing
Risk directing
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Risk identification

• First step
• Identification of hazards that may affect a
  project
• The risk a hazard presents to a particular
  project must decided

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Risk identification

• Methods used
• Checklist
• Knowledge based software

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Risk identification

• Some hazards will be generic
• Other hazards will be project specific

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Risk identification

• Various categories of factors will need to be
  considered
• Application factors
• Staff factors

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Risk identification

• Project factors
• Project methods
• Hardware/software factors
• Changeover factor

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Risk identification

• Supplier factors
• Environmental and social factors
• Health and safety factors

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Risk analysis

• Once identified risks should be assessed for
  their possible affect on the project

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Risk analysis

• Importance of a risk is known as the risk value
  or the risk exposure
• risk exposure risk likelihood x risk impact

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Risk analysis

• Impact scores should take account of
• the cost of delay
• cost overruns
• costs incurred or implicit in any compromise

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Risk analysis

• Part of a risk exposure assessment table
• Hazard Likelihood Impact exposure
• 1 Changes to the requirements 1 8 8
• specification during coding
• 2 Specification take longer than 3 7
  21
• expected
• 3 Staff sickness affecting 5 7 35
• critical path activities
• 4 Staff sickness affecting 10 3 30
• non-critical activities

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Risk analysis

• Managing risk involves the use of two strategies
• reducing the risk exposure
• drawing up contingency plans

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Risk analysis

• All attempts to reduce risk exposure will have a
  cost
• Risk reduction work should be prioritised to
  obtain best value

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Risk analysis

• Factor other than risk exposure that should be
  taken account of when prioritising risk
  management
• confidence of risk assessment
• compound risks
• number of risks
• cost of action

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Risk analysis

• Risk reduction leverage (RRL)
• RRL REbefore - REafter
• risk reduction cost

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Reducing risks

• There are five broad categories for risk
  reduction
• hazard prevention
• likelihood reduction
• risk reduction
• risk transfer
• contingency planning

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Risk Management

• Risk Planning
• Risk Control
• Risk monitoring
• Risk directing and staffing

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Risk Planning

• Risk acceptance
• Risk avoidance
• Risk reduction and mitigation
• Risk transfer

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Conclusion

• Risk
• Categories
• Identification
• Analysis
• Management