Risk Management: A practical toolkit for identifying, analyzing, and coping with project risks

[article]
Member Submitted

and lower limit

Plan 60 à 90

Plan 60? Expressing that the value is in doubt

Plan 60?? Expressing that the value is in serious doubt

Plan 60 ß A wild guess Using the source of the nformation to show the doubt

Plan 60 ß A.N. Other Depends on A.N. Other's credibility in setting this value

Plan <60> Fuzzy brackets indicate data needing improvement

 All of the above signals can be used to warn of potential risk. Of course, the culture must encourage such specification rather than intimidate people from using it.

Plan [IF Euro is used in UK] 99%

The above is an example where the risk is controlled by making the specification totally dependent on the IF condition. There is no risk that anyone will plan to achieve 99% if the condition is false. However, they are warned to plan to achieve 99% should the condition turn true.

Note, you can also use IF qualifiers to constrain the use of a strategy (a means for achieving a goal). This reduces the risk that an expensive strategy is applied under inappropriate conditions.

Strategy99 [IF hunger famine in a country, IF road and rail transport unavailable] Aerial Supply of Food.

Principle 2. Maximize profit, not minimize risk
Focus on achieving the maximum benefits within budget and time-scales rather than on attempting to eliminate all risk.

Elimination of all risk is not practical, not necessary and, not even desirable.

All risk has to be controlled and balanced against the potential benefits. In some cases, it is appropriate to decide to use (and manage) a strategy with higher benefits and higher risks. I use Impact Estimation (IE) to help me assess the set of strategies I need to ensure I meet the required objectives. My focus is always on achieving the objectives in spite of the risks.

Outline Description of Impact Estimation (IE)
The basic IE idea is simple: estimate quantitatively how much your design ideas impact all critical requirements. This is achieved by completing an IE table. The left-hand column of the table should contain the objectives and, across the top of the table should be the proposed strategies. For the objectives, assuming you have expressed them using Planguage, it is a question of listing down all the quality and resource attributes you wish to consider. You need next to decide on a future date you want to use. This should be a system 'milestone'; a date for which you have specified Must and Plan
levels. Then, against each attribute, you state the current level and the Plan level for your chosen date. (If you are especially risk averse you would use the Must level!) For the strategies, you simply list them across the top of the IE table.

You then fill in the table, for each cell you answer the question, 'How does this strategy move the attribute from its current level towards the Plan level?' First you state the actual value you would expect and then you convert this into a percentage of the amount of required change.

For example, Training Time for Task A is currently 15 minutes and you require it to be 10 minutes within six months. You estimate Strategy B will reduce Training Time for Task A to 12 minutes. In other words, Strategy B will get you 60% of the way to meeting your objective. See Table 1.

TABLE 1

  Strategy B
  Real Impact % Impact
Training Time
Past = 15 minutes in June 1998
Plan = 10 minutes by end of Dec. 1998
12 minutes 60%
Resource = Development Budget
Plan

About the author

TechWell Contributor's picture TechWell Contributor

The opinions and positions expressed within these guest posts are those of the author alone and do not represent those of the TechWell Community Sites. Guest authors represent that they have the right to distribute this content and that such content is not violating the legal rights of others. If you would like to contribute content to a TechWell Community Site, email editors@techwell.com.

AgileConnection is one of the growing communities of the TechWell network.

Featuring fresh, insightful stories, TechWell.com is the place to go for what is happening in software development and delivery.  Join the conversation now!

Upcoming Events

May 04
May 04
May 04
Jun 01