1. PRJ566
Managing Risk

2. What is risk?
Risk=an uncertainty that can have a negative impact on meeting project objectives
Risks need to be managed throughout the project
Anticipate/avoid problems
Minimize surprises

3. Identifying Risks in IT Projects: “red flags”
Lack of user involvement
Lack of management support
Poor definition of Scope
Lack of proper planning
Unrealistic expectations

4. Identifying Risks in IT Projects: “red flags”
New technology
Lack of required skills
Poor communication
Poor estimating
Poor project management

5. Managing Risks Perform a risk analysis Monitor and control risks
Identify Risks
Prioritize risks based on probability and impact
Plan risk response
Monitor and control risks

6. Identify Risks What potential events might hurt the project?
Categories of Risk:
Market risk
Financial risk
Technology risk
People risk
Structure/process risk

7. Risk Response Planning
After identifying and quantifying risks, you must plan your response—how will you manage them to keep them from sinking your project
Four main response strategies for risks
Risk avoidance
Risk acceptance
Risk transference
Risk mitigation

8. Risk Response Planning Example
2 of 4 team members don’t know the required programming language
Mitigate—send developers on training program and assign each a development partner to oversee work.
If our small business software causes any problems due to bugs that we have not uncovered, or misuse, we might get sued.
Transfer to 3rd party—purchase liability insurance. Add liability limitation claims to software.
The technology we’re planning to use is really leading edge; we would be the first (we want to wow our customers!)
Avoidance. We can’t afford the investment unless it works. Go with the older, proven technology.
Our competitors are developing similar products. They might finish first.
Accept. Our suite of products needs this product. We need it to stay in business.