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Indy Risk School
Project Risk Assessment
For most business people, there are two different project types. Pure business projects such as implementing a new Equal Employment Opportunity policy and, IT-related projects. As a result, there are two different project risk assessment procedures.
Software Project Risk Assessment
Fig. 4 - Risk Management: Informal risk assessment and risk exposure
Software project risk assessment is a sub-set of the broader processes of business risk management. However in the past, the process of risk assessment in software projects has tended to be intuitive and hidden.
As shown in Figure 4, whenever a software guru is asked to estimate how long a project will take, he or she will undertake a most amazing process. In essence, the software person intuitively assesses factors that he or she has learnt from bitter experience will influence the length of the project, assesses the impact of those factors depending on the specific tasks, adjusts the estimates by the relative weights of the factors, assesses the probability of the factors actually occurring and then calculates an adjusted estimate. No wonder computing folks are considered clever!
Project risk management is simply the formalization of a process that has been covert and subjective. As a result, it has been poorly understood and practised. [Note: most contemporary business and IT project management texts do not even mention risk management.]
When undertaking formal software project risk management, the risk of a project can be assessed by considering the following risk categories:
- system or product complexity;
- client or target environment; and
- team environment.