UNIT 4

RISK : any uncertain event that may/may not occur and can cause loss to the project or could lead to
an unsuccessful project.

RISK MANAGEMENT: refers to identification of the possible risksand drawing up plans to minimise
their effect on a project.

1 Project risks affect schedule or resources;

2 Product risks affect the quality or performance of the software being developed;
3 Business risks affect the organisation developing or procuring the software.

(OVERVIEW) RISK MANAGEMENT PROCESS INCLUDES:

Risk identification
Identify project, product and business risks;

Risk analysis
Assess the likelihood and consequences of these risks;

Risk planning
Draw up plans to avoid or minimise the effects of the risk;

Risk monitoring
Monitor the risks throughout the project;

RISK IDENTIFICATION :

Identifying risk is one of most important or essential and initial steps in risk management
process. Generally, identification of risk is an iterative process. It basically includes generating or
creating comprehensive list of threats that are based on events that can delay successful
achievement of objectives. In simple words, if you don’t find or identify risk, you won’t be able to
manage it.

A project may contain large variety of risk such as

1 Technology risks. Eg database processing is low.

2 People risks. : eg key staff unavil at critical times.
3 Organisational risks: eg financial prob leads to reduced budget
 4 Requirements risks. Eg change in req leads to change in design
5 Estimation risks. Eg size of s/w underestimated

STEPS :
1. Prepare a risk item check list based on components like product size,staff size ,business
impact etc.
2. Create risk components and driver list along with the probability of occurrence .
Risk components: performance, cost,support ,schedule

RISK ANALYSIS / RISK ASSESSMENT ( SAME)

1 Assess probability and seriousness of each risk.

2 Probability may be very low, low, moderate, high or very high.
3 Risk effects might be catastrophic, serious, tolerable or insignificant.

Risk exposure = probability/likelihood * severity/consequence

We may use the risk matrix to assign
thresholds that group the potential problems into priority categories.
 RISK PLANNING

Consider each risk and develop a strategy to manage that risk.

1 Avoidance strategies
The probability that the risk will arise is reduced;
2 Minimisation strategies
The impact of the risk on the project or product will be reduced;
3 Contingency plans
If the risk arises, contingency plans are plans to deal with that risk;

RISK MONITORING
Assess each identified risks regularly to decide whether or not it is becoming less or more probable.
Also assess whether the effects of the risk have changed.
Each key risk should be discussed at management progress meetings.

Risk management strategies

RMMM( RISK MITIGATION, MONITORING, MANAGEMENT)

Risk Mitigation :

It is an activity used to avoid problems (Risk Avoidance).

Steps for mitigating the risks as follows.

1. Finding out the risk.

2. Removing causes that are the reason for risk creation.
3. Controlling the corresponding documents from time to time.
4. Conducting timely reviews to speed up the work.

Risk Monitoring:
As the project proceeds, risk monitoring activities commence. The project manager monitors
factors that may provide an indication of whether the risk is becoming more or less likely.
Has following objectives :
1. To check if predicted risks occur or not.
2. To ensure proper application of risk aversion steps defined for risk.
3. To collect data for future risk analysis.
4. To allocate what problems are caused by which risks throughout the project.

Risk Management and planning :

It assumes that the mitigation activity failed and the risk is a reality. This task is done by Project
manager when risk becomes reality and causes severe problems. If the project manager effectively
uses project mitigation to remove risks successfully then it is easier to manage the risks. This shows
that the response that will be taken for each risk by a manager. The main objective of the risk
management plan is the risk register. This risk register describes and focuses on the predicted
threats to a software project.

EVALUATING SCHEDULE RISK USING PERT

The risk analysis will give the project manager information to say to the customer, “My risk analysis
indicates that the date you imposed on this project has only a 3 percent likelihood of occurring. You
need an extra two months to bring this up to the 50–50 point.
PERT assumes that the schedule logic represents how the project is going to be accomplished. Also,
similar to schedule risk analysis, PERT focuses on the uncertainty of the activity durations.

The steps for using PERT are:

■ Use a three-point estimate to represent the uncertainty in durations. The three points are the
durations under optimistic, most likely, and pessimistic scenarios.
■ Calculate the average duration and its standard deviation for each activity. For the beta
distribution, the average is typically approximated as (low + 4 * most likely + high) / 6.)
■ Compute the completion date for the total project by adding the average duration of the activities
along the PERT critical path, which is the longest path through the network using those averages
■ Compute the standard deviation of the schedule path. (The standard deviation of the completion
date is computed by taking the square root of the sum of the activity duration variances along the
“PERT critical path.”
■ Assume a shape for the probability distribution of the total project completion date and use it to
determine the likelihood of any particular date happening, based on the average and standard
deviations computed earlier.
Measurement of physical progress/ financial progress:
( uses EVA : earned value analysis)
Physical Progress: Example: If you had 1000 metres of railway track to install, and you have already
installed 500 metres, then you are physically 50% complete. However, do not confuse Schedule %
Complete with Physical % Complete. Schedule % Complete is relevant to the duration of the project -
and has nothing to do with Physical progress. You can be physically 20% complete and yet be 50%
though the project duration.
Financial Progress: "How Much Money Have We Spent For The Work That We Have Done?" The
answer to this question will help determine your cash-flow and your profit.

EARNED VALUE ANALYSIS

Earned Value Analysis” is:
an industry standard way to: measure a project’s progress, forecast its completion date and final cost,
and provide schedule and budget variances along the way.
Links
https://www.youtube.com/watch?v=skb-m8UOKqg
https://www.youtube.com/watch?v=46FHU8zpNlQ
https://www.youtube.com/watch?v=z7b3SYQuqJM

STATUS REPORT
A project status report is a document that describes the progress of a
project within a specific time period and compares it against the
project plan. Project managers use status reports to keep stakeholders
informed of progress and monitor costs, risks, time and work.

Elements of a project report

1. General Project Info

1. General project information, such as the project’s name, code, etc.

2. Names of the project manager and any important team members
3. Date of the status report, including the cadence (e.g., weekly, bi-weekly, or
monthly)
2. Project Summary- Reminding all stakeholders what are we actually
building, projects scope. contains a concise, comprehensive overview of
an entire project and its key details. It usually consists of a project’s
objectives, background information, requirements

3. HIGH LEVEL- milestones :

 The completion of any highly significant task, event, occurrence or decision.

 Reaching a significant checkpoint or phase in the project lifecycle.

4. PROJECT DILEVERABLES AND THEIR STATUS: Project deliverables are such

outputs as the project plans, project reports and even meeting minutes

DELIVERABLE STATUS (R.A.G)

GREEN: ON TRACK

: POTENTIAL RISK (TEAM MONITORING RISK)

RED: ISSUE (TEAM WORKING ON SOLVING ISSUE)

5. ISSUE AND RISKS: anything that impacts scope,time and budget. How
are you going to address such problems is mentioned.

MILESTONE REPORT

The “Milestones” report displays the list of milestones from

your project sorted by start date.

Milestones in which we are lacking behind, the once we need to achieve

in future, and the once we have completed all are mentioned properly
 CHANGE CONTROL

A change control process is a way for project managers to submit requests to stakeholders for
review, that are then approved or denied.

When it comes to managing multiple projects, things can get complicated. From coordinating work
timelines to tracking objectives and results, the last thing you want to deal with is a major project
change. But with a change control process in place, submitting project change requests is a
breeze.

Change control is a process used to manage change requests for projects and big initiatives. It’s
part of a change management plan, which defines the roles for managing change within a team or
company.

In most cases, any stakeholder will be able to request a change. A request could be as small as a
slight edit to the project schedule or as large as a new deliverable. It’s important to keep in mind
that not all requests will be approved, as it’s up to key stakeholders to approve or deny change
requests.

Benefits of change control:

1. Increased productivity

2. Effective communication

3. Better teamwork and collaboration

 PROJECT CLOSING
What Is Project Closure?
Project closure is the last phase of a project. It’s when the project
manager verifies that the client, stakeholder or customer has accepted
the project deliverables. If the project or product is ongoing after the
project, then maintenance must be set up.

Project Closing is the combination of the following when applied to a project:

. Assurance that all the work has been completed,

. Assurance that all agreed upon project management processes have been executed, and

. Formal recognition of the completion of a project—everyone agrees that it is completed.

If a project is not closed properly, the project management team and the project
team's efforts, time, and credibility may be negatively perceived for matters that are
not their fault or responsibility.

LESSON LEARNED REPORT

A lessons learned report is one of the most important documents of a project. Every
important event, challenge, constrain, risk, and uncertainty faced during the project
are documented in a lessons learned report along with the healthy and timely
solutions you came up with for them.

Well, it is important to write a lessons learned report to record the desired outcomes
and solutions for all future projects. In this way, it helps in avoiding the same
mistakes again. The lessons learned report from the previous projects can be viewed
and analyzed before starting a new project to remember the mistakes that are not to
be made

When you plan to write a lessons learned report for your project, an important thing
to consider is that which will be the healthiest and best steps to write it.

Process: