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What is Risk Management?

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A risk is a probable problem it might happen, or it might not. There are main two characteristics of risk.

Uncertainty- the risk may or may not happen which means there are no 100% risks.
Loss- If the risk occurs in reality, undesirable results or losses will occur.

Risk management is a sequence of steps that help a software team to understand, analyze, and manage uncertainty. Risk management consists of 

  1. Risk Identification
  2. Risk analysis
  3. Risk Planning
  4. Risk Monitoring

A computer code project may be laid low with an outsized sort of risk. To be ready to consistently establish the necessary risks that could affect a computer code project, it’s necessary to group risks into completely different categories. The project manager will then examine the risks from every category square measure relevant to the project. 

There are mainly 3 classes of risks that may affect a computer code project: 

  1. Project Risks: 
    Project risks concern various sorts of monetary funds, schedules, personnel, resources, and customer-related issues. A vital project risk is schedule slippage. Since computer code is intangible, it’s tough to observe and manage a computer code project. It’s tough to manage one thing that can not be seen. For any producing project, like producing cars, the project manager will see the merchandise taking form. 

    For example, see that the engine is fitted, at the moment the area of the door unit is fitted, the automotive is being painted, etc. so he will simply assess the progress of the work and manage it. The physical property of the merchandise being developed is a vital reason why several computer codes come to suffer from the danger of schedule slippage. 
  2. Technical Risks: 
    Technical risks concern potential style, implementation, interfacing, testing, and maintenance issues. Technical risks conjointly embody ambiguous specifications, incomplete specifications, dynamic specifications, technical uncertainty, and technical degeneration. Most technical risks occur thanks to the event team’s lean information concerning the project. 
     
  3. Business Risks: 
    This type of risk embodies the risks of building a superb product that nobody needs, losing monetary funds or personal commitments, etc. 

Classification of Risk in a project:

Example: Let us consider a satellite-based mobile communication project. The project manager can identify many risks in this project. Let us classify them appropriately.

  • What if the project cost escalates and overshoots what was estimated? – Project Risk
  • What if the mobile phones that are developed become too bulky to conveniently carry? Business Risk
  • What if call hand-off between satellites becomes too difficult to implement? Technical Risk
     

Last Updated : 09 Jan, 2024
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