Friday, July 4, 2008

Types of Risks in Software Projects

Are you developing any Test plan or test strategy for your project? Have you
addressed all risks properly in your test plan or test strategy?


As testing is the last part of the project, it’s always under pressure and
time constraint. To save time and money you should be able to prioritize your
testing work. How will prioritize testing work? For this you should be able to
judge more important and less important testing work. How will you decide which
work is more or less important? Here comes need of risk-based testing.


What is Risk?
“Risk are future uncertain events with a
probability of occurrence and a potential for loss”


Risk identification and management are the main concerns in every software
project. Effective analysis of software risks will help to effective planning
and assignments of work.


In this article I will cover what are the “types of risks”.
In next articles I will try to focus on risk identification, risk management and
mitigation.


Risks are identified, classified and managed before actual execution of
program. These risks are classified in different categories.


Categories of risks:


Schedule Risk:
Project schedule get slip when project
tasks and schedule release risks are not addressed properly.
Schedule risks
mainly affect on project and finally on company economy and may lead to project
failure.
Schedules often slip due to following reasons:


  • Wrong time estimation
  • Resources are not tracked properly. All resources like staff, systems,
    skills of individuals etc.
  • Failure to identify complex functionalities and time required to develop
    those functionalities.
  • Unexpected project scope expansions.

Budget Risk:


  • Wrong budget estimation.
  • Cost overruns
  • Project scope expansion

Operational Risks:
Risks of loss due to improper process
implementation, failed system or some external events risks.
Causes of
Operational risks:


  • Failure to address priority conflicts
  • Failure to resolve the responsibilities
  • Insufficient resources
  • No proper subject training
  • No resource planning
  • No communication in team.

Technical risks:
Technical risks generally leads to
failure of functionality and performance.
Causes of technical risks are:


  • Continuous changing requirements
  • No advanced technology available or the existing technology is in initial
    stages.
  • Product is complex to implement.
  • Difficult project modules integration.

Programmatic Risks:
These are the external risks beyond
the operational limits. These are all uncertain risks are outside the control of
the program.
These external events can be:


  • Running out of fund.
  • Market development
  • Changing customer product strategy and priority
  • Government rule changes.

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