Software Risk Management
Chapter 25
Risk Management copyright © 1996, 2001, 2005
R.S. Pressman & Associates, Inc.
For University Use Only
May be reproduced ONLY for student use at the university level
when used in conjunction with Software Engineering: A Practitioner's
Approach.
Any other reproduction or use is expressly prohibited.
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 1
Project Risks
What can go wrong?
What is the likelihood?
What will the damage be?
What can we do about it?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 2
Reactive Risk
Management
project team reacts to risks when they occur
mitigation—plan for additional resources in
anticipation of fire fighting
fix on failure—resource are found and applied
when the risk strikes
crisis management—failure does not respond
to applied resources and project is in jeopardy
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 3
Proactive Risk
Management
formal risk analysis is performed
organization corrects the root causes of risk
TQM concepts and statistical SQA
examining risk sources that lie beyond the bounds
of the software
developing the skill to manage change
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 4
Seven Principles
Maintain a global perspective—view software risks within the context of
system and the business problem
Take a forward-looking view—think about the risks that may arise in the
future; establish contingency plans
Encourage open communication—if someone states a potential risk, don’t
discount it.
Integrate—a consideration of risk must be integrated into the software
process
Emphasize a continuous process—the team must be vigilant throughout
the software process, modifying identified risks as more information is
known and adding new ones as better insight is achieved.
Develop a shared product vision—if all stakeholders share the same vision
of the software, it likely that better risk identification and assessment will
occur.
Encourage teamwork—the talents, skills and knowledge of all stakeholder
should be pooled
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 5
Risk Management
Paradigm
control
track
plan
RISK identify
analyze
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 6
Risk Identification
Product size—risks associated with the overall size of the software to be
built or modified.
Business impact—risks associated with constraints imposed by
management or the marketplace.
Customer characteristics—risks associated with the sophistication of the
customer and the developer's ability to communicate with the customer in
a timely manner.
Process definition—risks associated with the degree to which the software
process has been defined and is followed by the development
organization.
Development environment—risks associated with the availability and
quality of the tools to be used to build the product.
Technology to be built—risks associated with the complexity of the system
to be built and the "newness" of the technology that is packaged by the
system.
Staff size and experience—risks associated with the overall technical and
project experience of the software engineers who will do the work.
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 7
Assessing Project Risk-I
Have top software and customer managers
formally committed to support the project?
Are end-users enthusiastically committed to the
project and the system/product to be built?
Are requirements fully understood by the
software engineering team and their customers?
Have customers been involved fully in the
definition of requirements?
Do end-users have realistic expectations?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 8
Assessing Project Risk-II
Is project scope stable?
Does the software engineering team have the
right mix of skills?
Are project requirements stable?
Does the project team have experience with the
technology to be implemented?
Is the number of people on the project team
adequate to do the job?
Do all customer/user constituencies agree on the
importance of the project and on the
requirements for the system/product to be built?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 9
Risk Components
performance risk—the degree of uncertainty that
the product will meet its requirements and be fit
for its intended use.
cost risk—the degree of uncertainty that the
project budget will be maintained.
support risk—the degree of uncertainty that the
resultant software will be easy to correct, adapt,
and enhance.
schedule risk—the degree of uncertainty that the
project schedule will be maintained and that the
product will be delivered on time.
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 10
Risk Projection
Risk projection, also called risk estimation,
attempts to rate each risk in two ways
the likelihood or probability that the risk is real
the consequences of the problems associated with the
risk, should it occur.
The are four risk projection steps:
establish a scale that reflects the perceived likelihood of a risk
delineate the consequences of the risk
estimate the impact of the risk on the project and the product,
note the overall accuracy of the risk projection so that there
will be no misunderstandings.
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 11
Building a Risk Table
Risk Probability Impact RMMM
Risk
Mitigation
Monitoring
&
Management
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 12
Building the Risk Table
Estimate the probability of occurrence
Estimate the impact on the project on a
scale of 1 to 5, where
1 = low impact on project success
5 = catastrophic impact on project success
sort the table by probability and impact
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 13
Risk Exposure (Impact)
The overall risk exposure, RE, is determined
using the following relationship [HAL98]:
RE = P x C
where
P is the probability of occurrence for a risk,
and
C is the cost to the project should the risk
occur.
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 14
Risk Exposure Example
Risk identification. Only 70 percent of the software
components scheduled for reuse will, in fact, be integrated into
the application. The remaining functionality will have to be
custom developed.
Risk probability. 80% (likely).
Risk impact. 60 reusable software components were planned. If
only 70 percent can be used, 18 components would have to be
developed from scratch (in addition to other custom software that
has been scheduled for development). Since the average
component is 100 LOC and local data indicate that the software
engineering cost for each LOC is $14.00, the overall cost (impact)
to develop the components would be 18 x 100 x 14 = $25,200.
Risk exposure. RE = 0.80 x 25,200 ~ $20,200.
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 15
Risk Mitigation,
Monitoring,
and Management
mitigation—how can we avoid the risk?
monitoring—what factors can we track that
will enable us to determine if the risk is
becoming more or less likely?
management—what contingency plans do
we have if the risk becomes a reality?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 16
Risk Due to Product Size
Attributes that affect risk:
• estimated size of the product in LOC or FP?
• estimated size of product in number of programs,
files, transactions?
• percentage deviation in size of product from
average for previous products?
• size of database created or used by the product?
• number of users of the product?
• number of projected changes to the requirements
for the product? before delivery? after delivery?
• amount of reused software?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 17
Risk Due to Business
Impact
Attributes that affect risk:
• affect of this product on company revenue?
• visibility of this product by senior management?
• reasonableness of delivery deadline?
• number of customers who will use this product
• interoperability constraints
• sophistication of end users?
• amount and quality of product documentation that
must be produced and delivered to the customer?
• governmental constraints
• costs associated with late delivery?
• costs associated with a defective product?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 18
Risks Due to the
Customer
Questions that must be answered:
• Have you worked with the customer in the past?
• Does the customer have a solid idea of requirements?
• Has the customer agreed to spend time with you?
• Is the customer willing to participate in reviews?
• Is the customer technically sophisticated?
• Is the customer willing to let your people do their
job—that is, will the customer resist looking over your
shoulder during technically detailed work?
• Does the customer understand the software
engineering process?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 19
Risks Due to Process
Maturity
Questions that must be answered:
• Have you established a common process framework?
• Is it followed by project teams?
• Do you have management support for
software engineering
• Do you have a proactive approach to SQA?
• Do you conduct formal technical reviews?
• Are CASE tools used for analysis, design and
testing?
• Are the tools integrated with one another?
• Have document formats been established?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 20
Technology Risks
Questions that must be answered:
• Is the technology new to your organization?
• Are new algorithms, I/O technology required?
• Is new or unproven hardware involved?
• Does the application interface with new software?
• Is a specialized user interface required?
• Is the application radically different?
• Are you using new software engineering methods?
• Are you using unconventional software development
methods, such as formal methods, AI-based approaches,
artificial neural networks?
• Are there significant performance constraints?
• Is there doubt the functionality requested is "do-able?"
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 21
Staff/People Risks
Questions that must be answered:
• Are the best people available?
• Does staff have the right skills?
• Are enough people available?
• Are staff committed for entire duration?
• Will some people work part time?
• Do staff have the right expectations?
• Have staff received necessary training?
• Will turnover among staff be low?
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 22
Recording Risk
Information
Project: Embedded software for XYZ system
Risk type: schedule risk
Priority (1 low ... 5 critical): 4
Risk factor: Project completion will depend on tests which require
hardware component under development. Hardware component
delivery may be delayed
Probability: 60 %
Impact: Project completion will be delayed for each day that
hardware is unavailable for use in software testing
Monitoring approach:
Scheduled milestone reviews with hardware group
Contingency plan:
Modification of testing strategy to accommodate delay using
software simulation
Estimated resources: 6 additional person months beginning 7-1-96
These courseware materials are to be used in conjunction with Software Engineering: A Practitioner’s Approach, 6/e
and are provided with permission by R.S. Pressman & Associates, Inc., copyright © 1996, 2001, 2005 23
