1 /13 Risk Management What is Risk ?

2 /13 Risk Management What is Risk ? Risk is the possibility of suffering loss. (Carnegie Mellon SEI definition)

3 /13 Risk Management What is Risk ? Risk is the possibility of suffering loss. (Carnegie Mellon SEI definition) In a development project:

4 /13 Risk Management What is Risk ? Risk is the possibility of suffering loss. (Carnegie Mellon SEI definition) In a development project: –Diminished quality of the end product –Increased costs –Delayed completion –or FAILURE

5 /13 Risk Management What is Risk Management ? Risk management is a practice with processes, methods and tools for managing risks in a project. It provides a disciplined environment for proactive decision making to :

6 /13 Risk Management What is Risk Management ? Risk management is a practice with processes, methods and tools for managing risks in a project. It provides a disciplined environment for proactive decision making to : –Assess what could go wrong? –Determine which risks are important, –Implement strategies to deal with it.

7 /13 Risk Management – the process

8 /13 Risk Management - Identification

9 /13 Risk Management - assessment Likelihood : probability of risk occuring Impact : size of the hit it takes if identified risk occurs Urgency : timeframe (i.e. very urgent, less urgent, etc.)

10 /13 Risk Management – actions Acceptance actions : if it is inevitable you just let it happen, Avoidance actions : reduce the likelihood of the occurance of a risk, Mitigation actions : reduce the impact of the risk if it occurs, Transfer : is like an insurance, you insure yourself let someoneelse bear the risk and pay a premium for it.

11 /13 Risk Management - tools Risk register: –A central repository for the information gained on each risk learned. Software tools: –

12 /13 Risk Management - ownership The risk owner should be someone; –has sufficient information concerning the risk, –has the necessary resources, –possesses the authority to manage the risk.

13 /13 Risk Management Questions ?