2. Introduction
The purpose of Risk Management is to identify
potential problems before they occur so that
risk-handling activities can be planned and
invoked as needed across the life of the product
or project to mitigate adverse impacts on
achieving objectives.
4. Importance cont…
ISO 20000 (Service Management)
◦The ultimate goal of ISO 20000 is to:
◦Reduce operational exposure to risk
◦Meet contractual requirements
◦Demonstrate service quality
TL 9000 for Telecom Industry
◦ Similar to ISO 9000
ITIL
V3 (Best Practices for IT Service
Management)
◦ Risk Management and Analysis
5. Risk Management Process
Riskmanagement can be divided into three
processes:
◦Defining a risk management strategy;
◦Identifying and analysing risks; and
◦Handling identified risks, including the
implementation of risk mitigation plans when
needed.
◦
6. Activities Performed
Determine Risk Sources and Categories
◦Risk Source
◦Uncertain requirements
◦Unprecedented efforts—estimates unavailable
◦Infeasible design
◦Unavailable technology
◦Unrealistic schedule estimates or allocation
◦Inadequate staffing and skills
◦Cost or funding issues
◦Uncertain or inadequate subcontractor capability
◦Uncertain or inadequate vendor capability
◦Inadequate communication with actual or potential
customers or with their representatives
◦Disruptions to continuity of operations
Risk Categories
◦
7. Activities Performed cont…
Define Risk Parameters
Parameters for evaluating, categorizing, and
◦
prioritizing risks include the following:
◦Risk likelihood (i.e., probability of risk occurrence)
◦Risk consequence (i.e., impact and severity of risk
occurrence)
◦Thresholds to trigger management activities
◦
8. Activities Performed cont…
Establish a Risk Management Strategy
◦The scope of the risk management effort
◦Methods and tools to be used for risk identification,
risk analysis, risk mitigation, risk monitoring, and
communication
◦Project-specific sources of risks
◦How these risks are to be organized, categorized,
compared, and consolidated
◦Parameters, including likelihood, consequence, and
thresholds, for taking action on identified risks
◦Risk mitigation techniques to be used, such as
prototyping, piloting, simulation, alternative designs,
or evolutionary development
◦Definition of risk measures to monitor the status of
the risks
9. Activities Performed cont…
Identify Risks
◦Examine each element of the project work
breakdown structure to uncover risks.
◦Conduct a risk assessment using a risk taxonomy.
◦Interview subject matter experts.
◦Review risk management efforts from similar
products.
◦Examine lessons-learned documents or databases.
◦Examine design specifications and agreement
requirements.
10. Activities Performed cont…
Evaluate, Categorize, and Prioritize Risks
◦Each risk is evaluated and assigned values in
accordance with the defined risk parameters, which
may include likelihood, consequence (severity, or
impact), and thresholds.
◦Likelihood - remote, unlikely, likely, highly likely, or a
near certainty
◦Consequences –
Low, Medium, High, Negligible, Marginal, Significant, Criti
cal, Catastrophic
Risks are categorized into the defined risk
◦
categories, providing a means to look at risks
according to their source, taxonomy, or project
component
11. Activities Performed cont…
Develop Risk Mitigation Plans
◦Risk avoidance: Changing or lowering requirements
while still meeting the user’s needs
◦Risk control: Taking active steps to minimize risks
◦Risk transfer: Reallocating requirements to lower the
risks
◦Risk monitoring: Watching and periodically re-
evaluating the risk for changes to the assigned risk
parameters
◦Risk acceptance: Acknowledgment of risk but not
taking any action
12. Activities Performed cont…
Implement Risk Mitigation Plans
◦Monitor the status of each risk periodically and
implement the risk mitigation plan as appropriate.
13. Documents
Risk source lists (external and internal)
Risk categories list
Risk evaluation, categorization, and
prioritization criteria
Risk management requirements (e.g., control
and approval levels, and reassessment intervals)
Project risk management
List of identified risks, including the
context, conditions, and consequences of risk
occurrence
List of risks, with a priority assigned to each
risk
Documented handling options for each
