Risk Management
Proactive strategies for
minimizing the effects of bad things
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Software Risk Management:
Principles and Practices
Barry Boehm
IEEE Software, Jan1991
text pp443-452
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Survey
 35%
of 600 firms “had at least one runaway
software project”
 In most cases “their problems would have
been avoided or strongly reduced if there
had been an explicit early concern with
identifying and resolving their high-risk
elements”
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Risks
 Bad
things that might happen
 two characteristics
– uncertainty - probability of happening
– loss - cost if it happens
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Risk Management
 Risk Assessment
– Risk Identification
– Risk Analysis
– Risk Prioritization
 Risk
Control
– Risk-management Planning
– Risk Resolution
– Risk Monitoring
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Risk Categories
 Project
risks
– budget, schedule, personnel, requirements
 Technical
risks
– design, implementation, interface, testing
problems
 Business
risks
– product viability
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Risk Exposure
 A.
the possibility of catastrophic loss
 B. probability times potential loss
 C. the factors that distinguish successful
projects from unsuccessful projects
 D. decision tree
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Risk Exposure Example
 Is
it better to play game 1 or game2 with a
die?
 1 - pay $3 upfront and get paid $1 per dot
 2 - roll die and pay $3 for 1, $2 for a 2, get
paid $3 for a 6, get paid $2 for a 4
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L12aS9 Individual Task
 In
figure 1, p444, what is the combined risk
exposure if “the experiment team could
reduce its critical-error probability to less
than 0.04”? Assume all the remaining ratios
are the same.
 Due
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Thursday, 7/12 (off due Monday, 7/16)
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