Program Management - Risk Management

Risks are inherent in any system development activity. Note: systems comprise people, policy, procedure and machine. Furthermore, risk taking is essential to progress, and failure is often a key part of learning. On the other hand, the inevitability of risks does not imply the inability to recognize and manage risks to minimize potential negative consequences while retaining the opportunities for creating new and better systems.

Risk Identification

Before risks can be managed, they must be identified. Identification surfaces risks before they become problems and adversely affect a project. Risk identification produces lists of the project specific risk items likely to compromise a projects success. Typical risk-identification techniques applied by DSA include checklists, examination of decision drivers, comparisons with experience (assumption analysis), and decomposition.

Risk Analysis

Analysis is the conversion of risk data into decision making information. Analysis provides the basis for the project manager to work on the “right” risks. Risk analysis as applied by DSA assesses the loss probability and loss magnitude for each identified risk item, and its interaction or triggering potential of other risks Typical techniques applied by DSA include performance models, network analysis, statistical decision analysis, quality factor (like reliability, availability, and security) analysis.

Risk Prioritization

Risk prioritization produces a ranked order of the risk items identified and analyzed. Typical techniques applied by DSA include risk-exposure analysis, risk reduction leverage analysis (particularly involving cost-benefit analysis), and Delphi or group-consensus techniques.

Risk Planning

Planning turns risk information into decisions and actions (both present and future). Planning involves developing actions to address individual risks, prioritizing risk actions, and creating an integrated risk management plan. Typical techniques applied by DSA include checklists of resolution techniques, cost benefit analysis, and standard risk management plan outlines, forms, and elements.

Risk Resolution

Risk resolution corrects for deviations, provides for action tracking, and a top 10 risk item list that is highlighted at project review from planned risk items. Once risk metrics and triggering events have been chosen, there is nothing unique about risk control. Rather, risk control melds into project management and relies on project management processes to control risk action plans, correct for variations from plans, respond to triggering events, and improve risk management processes. Typical techniques applied by DSA include prototypes, simulations, benchmarks, mission analysis, key-personnel agreements, design-to-cost approaches, and incremental development.

Risk Monitoring

Risk monitoring involves tracking the project’s progress toward resolving it’s risk items and taking corrective action where appropriate. Typical techniques applied by DSA include milestone tracking, and a top 10 risk item list which is evaluated at project review for reassessment and additional corrective action.

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