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Risk in Software Development Series
Introduction - What is Risk?
Risk is often defined as the combination of the likelihood
of a problem occurring and the impact of the problem if
it were to occur.
- Risk concerns future happenings.
- Risk involves change in mind, opinion, actions, or
places.
- Risk involves choice and all the uncertainty that
that choice itself entails.
Risk is something with which we are all somewhat familiar.
We know that it is risky to jump out of planes, or invest
money in the stock market. But we don't always think of
software development as risky - particularly if our software
is not mission critical (that is, people's lives don't depend
on it). While insurance companies and actuarial analysts
spend most of their days dealing with risk, software development
teams often spend a mere fraction of their project schedule
thinking about risk.
In this series, we introduce you to some basic concepts
and principles of risk management, and how these concepts
and principles can be applied to software development projects
to increase the probability of success.
In everyday life a risk is an exposure to the chance of
injury or loss - a thing or course of action involving uncertainty
and therefore danger. A risk, in the software industry,
can be anything that may threaten the successful completion
of a project: increased costs, delayed completion, loss
of quality, or loss of market-share.
Two factors can be used to determine the magnitude of a
risk: likelihood of occurrence, and impact of occurrence.
When combined into a single indicator the risk can be judged
relative to other risks as High, Moderate, or Low.
Many organizations still do not identify risks at the beginning
of a project, or review and update those risks throughout
the course of the product lifecycle. Estimating and planning
is done as if all variables are known, and outcomes certain.
The reality is that risk results from changes in development
personnel, market conditions, customer expectations, and
even business conditions for the development organization.
Experience shows that the large majority of risks have
a direct or indirect impact on schedule, and therefore implicitly
on cost. Some have a direct impact on cost. The rest may
have no direct impact on cost or schedule, but affect other
areas of the project such as quality.
Some common risks include: the technical requirements of
the product or system, constraints placed upon the project
or product by the customer(s), budget, or schedule.
Types of Risks
It's important to distinguish between direct and indirect
risks. A direct risk is one over which some degree of control
is possible whereas an indirect risk is one that cannot
be controlled.
While one should not be unaware of the indirect risks,
they are of little consequence in a practical sense: since
one cannot change them, there is little to be gained by
worrying about them.
Sometimes, an indirect risk may actually be a direct risk.
For example, you may be dependent on an external supplier
for a component or platform for your product. This appears
to be a risk that cannot be controlled. But, by having contingency
plans for those components, you can take control of the
risk: develop a relationship with the supplier so they listen
to your needs, choose alternate suppliers, or choose to
develop the needed components yourself.
With indirect risks, you either have to gain some degree
of control, or you need to just make note of them. Having
them documented will allow you to easily revisit the risk
and the decisions that were made as necessary.
To help determine if your project would benefit from Risk
Management, look at your project and ask yourself the following
questions.
- Is the project scope firm or does the scope keep
expanding?
- Are estimates accurate?
- Is there time to "do it right"?
- Has the technology been proven?
- Are the users of the system experienced with the
type of system being developed?
These are just a few of the questions to ask yourself when
looking for potential risks related to your project. If
your answer was "No" or "Unknown" to any of them, it means
that you are facing at least one risk to your project being
a success.
QA Labs is a powerful player on your team supplying the critical competitive advantage you need today. Our mission is to help you make your software products succeed in the marketplace, whatever the climate. We work with you to make wise choices that reflect project constraints, industry trends, and business considerations. We are the largest independent software quality assurance and testing service provider in Canada. For more information, please visit www.qalabs.com.
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