Risk Management

Risk is a kind of event that can influence the project flow in a positive or negative way. Risk management process is a process of risks evaluation, analysis and effective management. And a goal of risk management process is an effective risks identification and management to increase positive and decrease negative risk influence. Due to fact that IT projects have their own specific related to fast technology evolution, risk management gains life-critical priority to the project success as the result of risk management process is one of the significant part of project and product management.

For project that has frequently changing requirements, configuration and other, there are a lot of risks the project can face with, as a result risk management process should be paid more attention to and risk evaluation and mitigation should be performed more frequently. Continuous changes in project and environmental demands requires from project team regular review of the risks, plans and strategies, checking for new risks which can appear. These actions should be easily integrated into project configuration.

Risks Management Process

One of the key points of risk management procedure is a preventive problem evaluation and early making of risk elimination plan and strategy beforehand corrective actions penetration. Also corrective plans should be developed in case risk appeared. Risks preventive evaluation and beforehand management decrease the efforts and time when risk is originated and as the result the negative impact of the risk can be completely eliminated or decreased. Another aspect of risk management process is making decisions in uncertainty and vagueness conditions; thereby it is necessary that detailed risk description would be provided. This assures clear and unambiguous understanding of risk by every team member and helps to know the reason and conditions of probable risk appearance, to have the mitigation plan.

There are six steps of risk management process:

• Detection and identification;
• Analysis and prioritizing;
• Planning;
• Monitoring and supervising;
• Adjustment and correction;
• Evaluation and lessons learning.

Contingency and Mitigation Strategies

There are two major strategies used to eliminate or ease risk effect: the mitigation and contingency strategy.

Mitigation plan include actions and activities performed ahead of time to either prevent a risk from occurring altogether or to reduce the impact or consequences of its occurring to an acceptable level. Risk mitigation differs from risk avoidance because mitigation focuses on prevention and minimization of risk to acceptable levels, whereas risk avoidance changes the scope of a project to remove activities having unacceptable risk.

The main goal of risk mitigation is to reduce the probability of occurrence. Not every project risk has a reasonable and cost-effective mitigation strategy. In cases where a mitigation strategy is not available, it is essential to consider effective contingency planning instead.

Risk contingency planning involves creation of one or more fallback plans that can be activated in case efforts to prevent the adverse event fail. Contingency plans are necessary for all risks, including those that have mitigation plans. They address what to do if the risk occurs and focus on the consequence and how to minimize its impact. To be effective, the team should make contingency plans well in advance. Often the team can establish trigger values for the contingency plan based on the type of risk or the type of impact that will be encountered.

There are two types of contingency triggers:

• Point-in-time triggers are built around dates, generally the latest date by which something has to happen;
• Threshold triggers rely on things that can be measured or counted.

It is important for the team to agree on contingency triggers and their values with the appropriate managers as early as possible so that there is no delay committing budgets or resources needed to carry out the contingency plan.

Risks Description

Below the most common risks are described:

• Loosing a key team player – This risk is easily removed by working with OnCleverSoft since it is a relatively big company and replacement is possible in acceptable time;
• Communication and other delays at client’s side – This risk should be removed at the client’s side by assigning a coordinator.

Some kind of technology risks:

• Use of Third Party Software – This risks are related to the fact that the third party software may have some inconsistencies, problems and other points which can be related to the main project implementation and stabilization;
• Changes in licensing/policies of involved major software vendors (this risk can’t be addressed).