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

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in practice. But it does so at such an early stage, that we have a fair chance to do something about the problems.

Principle 7. Communicate about risk
There must be no unexpected surprises. If people have followed guidelines and are open about what work they have done, then others have the opportunity to comment constructively. Where there are risks, then share the information.

Hopefully, readers will by now have begun to understand that Planguage and IE are good means of communicating risk. Let me now introduce Inspection as a third useful method.

Inspection is a direct weapon for risk reduction. [GILB93]. Early Inspections on all written specifications is a powerful way to measure, identify and reduce risk of bad plans becoming bad investments. The key idea is that Major defects are measured, removed, and that people learn to avoid them, by getting detailed feedback from colleagues. A defect is a violation of a 'best practice' rule. A Major defect is defined as a defect which can have substantial economic effect 'downstream' (in practice, in 'test' phases and in the field). By this definition, a Major defect is a 'risk'. So Inspection measures risks!

Many people think that the main benefit from Inspection is in identifying and removing Major defects early (e.g. before source code reaches test phases). This is not the case. (My experience is that Inspection is as bad as testing in % defect-removal effectiveness. In very rough terms half of every defect present is not identified or removed.) The really important economic effect of Inspection is not what happens at the level of a single document, but in teaching the people and the organization. The real effect of Inspection is in:

  • teaching individual engineers exactly how often they violate best practice rules
  • motivating the engineers to take rules seriously ( really avoid injecting Major defects)
  • regulating flow of documentation, so that high Major defect documents
  • can neither exit nor enter adjacent work processes.

Staff involved in Inspections learn very quickly how to stop injecting defects. Typically, the defects introduced by an author reduce at the rate of about 50% every time a new document is written and Inspected. For example, using Inspection, Raytheon reduced 'rework' costs, as a % of development costs, from 43% to 5% in an eight year period [DION95].

One other little-appreciated aspect of Inspection is that you can use it by sampling a small section of a large document, rather than trying to 'clean up' the entire document. If the sample shows a high Major defect density (say more than one Major/Page) then the document is probably 'polluted' and action can be taken to analyze the defect sources. A complete rewrite may be necessary using appropriate specification rules or new/improved source documents. This is generally cheaper than trying to clean up the entire document using defect removal Inspection or testing.

Principle 8. Reuse what you learn about risk
Standards, rules and guidance must capture and assist good practice. Continuous process improvement is also needed.

In the previous section, the importance of Inspection was discussed and rules were highlighted as one of the essentials required to support it. It is worth emphasizing the aspect of reuse that is occurring here. The more effort that is put into making rules more effective and efficient by incorporating feedback from Inspections, the more productive the Inspections and the greater the reduction in risk.

Even more benefit can be achieved if what is learnt from Inspection is used to modify the processes that are causing the defects; Continuous Process Improvement has been shown to have a

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