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Risk Analysis. Based on E.M. Bennatan, On Time, Within Budget . John Wiley & Sons, 1995. Risk Analysis. A project management technique in which potential problems are identified, their probability and severity of impact estimated, and plans devised to address them should they occur.

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Risk Analysis

Based on E.M. Bennatan, On Time, Within Budget. John Wiley & Sons, 1995.


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Risk Analysis

  • A project management technique in which potential problems are identified, their probability and severity of impact estimated, and plans devised to address them should they occur.

  • A problem that has been anticipated and planned for is far easier to solve than one that occurs unexpectedly.


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Risk Analysis Procedure

  • Anticipate problems.

  • Estimate the probability that the problem will occur.

  • Estimate the impact of the problem on the project.

  • Attribute a measure of severity to the problem.

  • Identify contingency plans for severe-impact problems.


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Anticipate Problems

  • Common SD problems:

    • Inadequate definition of requirements

    • Frequent changes (creeping requirements)

    • Poor estimates

    • Dependence on external sources

    • Difficulties in concluding the project

    • Staff turnover

    • Inadequate tracking and supervision


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Anticipate Problems ….

  • Review project technical and administrative plans:

    • Project plan (resources, schedule, task dependencies)

    • Requirements specification (difficulty in satisfying performance objectives)

    • Design specification (implementation decisions that may create problems)


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Anticipate Problems ….

  • Compile a list of potential problems, briefly describing each problem and its effect on the project, e.g.,

    • Staff turnover: Given the tight schedule and dependence on staff expertise, the loss of Developer A or any long-term loss of other personnel will cause the project to slip significantly.


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Estimate Probability and Impact

  • Estimate the probability that the problem will occur, assigning an expectation number between 1 (low) and 10 (high) to each problem.

  • Estimate the severity of the problem’s impact, assigning a number between 1 (low impact) and 10 (high impact) to each problem.

  • Multiply the expectation number by the impact number to produce the measure of severity for each problem.



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Identify Contingency Plans

  • Decide the “cut-off point” in severity ratings (e.g., 15 or 20).

  • Devise a contingency plan for each high-severity problem.

  • Assign a “tracker” to track the problem and to alert the project manager when the contingency plan needs to be implemented.



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When to Perform Risk Analysis

  • As part of the Project Plan

  • As planning for each major development stage:

    • Requirements Analysis

    • Design Specification

    • Implementation

  • Whenever a “significant event” occurs

  • Just as planning is an iterative process, so is risk analysis!


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Risk Analysis Costs and Benefits

  • RA is a kind of insurance.

  • Costs:

    • Time & effort to perform analysis

    • Cost of any fall-backs implemented

  • Benefits:

    • Minimized cost of problem resolution

    • Greater probability of successful project completion

    • Greater “peace of mind”


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