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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

Risk Analysis

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

risk analysis2
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.
risk analysis procedure
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.
anticipate problems
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
anticipate problems5
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)
anticipate problems6
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.
estimate probability and impact
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.
identify contingency plans
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.
when to perform risk analysis
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!
risk analysis costs and benefits
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”