Proactive Risk Management Strategy: Identification and Classification

Stages of a Proactive Strategy

Identification of potential risks - Assessment of its probability and its impact on the project - Prioritize by importance - Establish a plan to manage that risk.

4.3. Classification of Risks (Phase 1)

Risks can be included in different categories:

a) Depending on where they occur

1. Project risks: These threaten the project plan itself. If they occur, timing will be delayed and costs will rise. This group includes risks related to resources, project requirements, customer attitude, etc.
2. Technical risks: These threaten the quality and viability of the software and planning accordingly. If this risk occurs, implementation may be impossible or very difficult. This group would include problems of design, implementation, interface, etc.
3. Risks of business: These threaten the viability of building the software and often jeopardize the project or product. They occur in situations such as:
   • The product does not fit the business strategy of the company.
   • We build a product that the sales department does not know how to sell.
   • You lose the support of management in the project.
   • Budget allocated resources is lost or reduced.

B) According to the knowledge we have about them

1. Known risks: These are those that can be detected with a careful evaluation of the project plan for your technical environment.
2. Predictable risks: Those we can extrapolate from previous projects or from our experience.
3. Unpredictable risks: These are extremely difficult to identify.

Checklist for Risk Factors (Step 1)

1. Size of Project
2. Impact of Business
3. Client Features
4. Process Definition
5. Environment Development
6. Technology to build
7. Size and experience of the person

4.5. Projected Risk (Stage 2 and 3)

The projection of risk, also called risk estimation, attempts to evaluate each risk and the probability of it happening, as well as the consequences of the problems if they occur. The project manager must perform the following activities:

1. Establish a scale that reflects the estimated probability.
2. Define the consequences of risk.
3. Estimate the impact on the project and product.

Impact: 1 - Catastrophic 2 - Critical 3 - Marginal 4 - Negligible

The likelihood and impact of risk have different influences on project management. A risk that has a great impact but little chance should not absorb management time. However, a risk with little impact but high probability should be considered in the risk management procedures. This is classified in the previous table by probability and impact, setting a line so that the risks have been higher if we consider management.