What is Risk Management? Give Brief Ideas for Risk Assessment and Control

Any large project involves certain risks, and that is true for software projects. Risk management is an emerging area that aims to address the problem of identifying and managing the risks associated with a software project.

 Risk is a project of the possibility that the defined goals are not met. The basic motivation of having risk management is to avoid disasters and heavy losses. The current interest in risk management is due to the fact that the history of software development projects is full of major and minor failures. A large percentage of projects have run considerably over budget and behind schedule, and many of these have been abandoned midway. It is now argued that many of these failures were due to the fact that the risks were not identified and managed properly.

Risk management is an important area, particularly for large projects. Like any management activity, proper planning of that activity is central to success. Here we discuss various aspects of risk management and planning.

Risk Management Overview

Risk is defined as an exposure to the chance of injury of loss (Kon94]. That is, risk implies that there is a possibility that negative may happen. In the context of software projects, negative implies that here is an adverse effect on cost, quality, or schedule. Risk management is the area that tries to ensure that the impact of risks on cost, quality, and schedule is minimum.

Like configuration management, which minimizes the impact of change, risk management minimizes the impact of risks. However, risk management is generally done by the project management. For this reason we have not considered risk management as a separate process   (through it can validly be considered one) but have considered such activities as part of project management.

Risk management can be considered as dealing with the possibility and actual occurrence of those events that are not “regular” or commonly expected. Normally project management handles the commonly expected events, such as people going on leave or some requirements changing. It deals with events that are infrequent, somewhat out of the control of the project management, and are large enough (i.e. can have a major impact on the project) to justify special attention.