SYSTEMS ANALYSIS AND DESIGN (SENG71000)

Week-14

Risk Management

Akrem El-ghazal
 Introduction

What is Risk?

Negative Risk vs Positive Risk

Risk Management What is Risk Management ?

Steps to Managing Risks

OUTLINE Identify Risks

Assess Risks

Plan Risk Response

Monitor and Review the Risk

Further Reading

Summary and Conclusions

 INTRODUCTION
Software development projects deal with a lot of
changes which make them risky projects.
 INTRODUCTION
Software development projects deal with a lot of
changes which make them risky projects.
When you don’t consider risk!

Source: [Link]
 WHAT IS RISK ?

Risk is the effect of uncertainty on objectives

 POSITIVE VS NEGATIVE RISK

(Threats) (Opportunities)

Risks can be bad or good , and we tend to use the

same, over all processes to identify, qualify, quantify
and respond to these risks.
 WHAT IS RISK MANAGEMENT ?

Risk Management is the work required to prepare your

project for the impact of future events.
What are the steps to managing risks?
 WHAT ARE THE STEPS TO MANAGING RISKS?

1. Identify Risks
2. Assess Risks
3. Plan Risk Response
4. Monitor and Review the Risk
Identify Risks
 IDENTIFY RISKS

• You can not address risks that you have not identified!

• Risk identification is the process in which we list the potential risks, But How?
✓Brain storming
✓Use risk categories

Risk Register
 IDENTIFY RISKS
Sample of a risk register

Source: [Link]
 IDENTIFY RISKS
Another sample of a risk register

Source: [Link]
Assess Risks
 ASSESS RISKS
Typically we would:

• Qualify our risks (Assess probability and impact to the project)

• Quantify our risks (Put some numbers down to reflect what the risk can to do
to our budget, scope, or time for the project)
 ASSESS RISKS
Qualify Risks

• Probability – What is the likelihood of this risk occurring? Low/Med/High?

• Impact – If the risk occurs, what is the effect on the project going to be, in
general terms? Minor? Catastrophic? Low/Med/High?
 ASSESS RISKS
Quantify Risks

• While qualifying risks tries to describe risks’ probability and impact in broad
terms, here we want to attach numbers or other terms of significance to the
risk that are as specific as possible where we can provide such information.
 ASSESS RISKS
Quantify Risks

• Sample ways risks might be quantified:

• A two week delay will result in $32,500 budget shortfall in terms of salaries

• Missing the validation checkpoint will delay the project by 3 months (until the
next validation opportunity)
 ASSESS RISKS
Quantify Risks

Risk Probability Impact Probability X Impact

Risk-1 20% $ 30000 $ 6000
Risk-2 30% $ 1000 $ 300
Plan Risk Response
 PLAN RISK RESPONSE
For threats, we can:

Avoid – change the project’s scope to completely avoid the risk;

consider not doing the project

Transfer – push some of this risk to a third party. (subcontracting).

 PLAN RISK RESPONSE
For threats, we can:

Mitigate – reduce the impact or probability of a risk event to

acceptable levels.

Accept * – You can’t eliminate all threats, so your stakeholders may

need to accept some risk (hopefully within their risk tolerance!)

• * - If you do NOT manage your risk… you are basically accepting anything and
everything that could happen, bad or good.
 PLAN RISK RESPONSE
For Opportunities we can:

• Exploit – take full advantage of this positive impact, and do everything possible
for it to happen

• Share – Is there a third party who has the expertise your group might lack? Can
an arrangement be made to collaborate?
 PLAN RISK RESPONSE
For Opportunities we can:

• Enhance – Take steps to increase the probability of the positive outcome

happening.

• Accept – Passively accept the positive outcome if it happens, but otherwise do

nothing to actively pursue it.

• * - If you do NOT manage your risk… you are basically accepting anything and
everything that could happen, bad or good.
Monitor and Review the risk
 MONITOR AND REVIEW THE RISK

• Risk Management is not a one-time activity.

• You’ll constantly encounter new threats and opportunities to most projects,

so this is why you need a solid plan to identify, classify and manage these
risks to optimize your project.

• Keep your risk register up to date! As events unfold in your project, you may
be able to close some risks, or add others that need to be tracked.
 SUMMARY

Defining and explain Explained the positive Explain the risk

risk and negative risks managements

Explained the steps to Explained why Risk

Management is not a Gave some real examples
manage risks of risks and how to
one-time activity.
response to them
NEXT STEPS Further Reading
 FURTHER READING

• [1]- The Risk Management Process in Project Management

• [2]- Risk Management Overview
• [3]- Positive Risks[4] Agile Alliance
• [4] Agile Alliance
• [5] Mountain Goat Software
• [6] Satzinger, John W., Robert B. Jackson, and Stephen D. Burd. Systems
analysis and design in a changing world. 7th edition, Cengage learning,
2016.
THANK YOU!