Managing Risk:
Methods for Software Systems Development

Elaine M. Hall, Ph.D.

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Addison-Wesley
An Imprint of Addison Wesley Longman, Inc.

Reading, Massachusetts Image Harlow, England Image Menlo Park, California
Berkeley, California Image Don Mills, Ontario Image Sydney
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Software Engineering Institute

The SEI Series in Software Engineering

Library of Congress Cataloging-in-Publication Data
Hall, Elaine M.
      Managing risk: methods for software systems development / Elaine
    M. Hall.
           p.  cm.—(SEI series in software engineering)
       Includes bibliographical references and index.
       ISBN 0-201-25592-8
       1.  Computer software.    2.  Risk management.    I. Title.
    II.  Series.
    QA76.754.H346    1997
    005.1‘068‘1—DC21
                                                                                     97–24703
                                                                                                CIP

FOR MY HUSBAND

Contents

Foreword: Running Toward Risk

Preface

About the Author

Part I Risk Management Discovery

Chapter 1 Software Risk Management

1.1 Foundations

1.2 Risk in the Large

1.3 Risk in the Small

1.4 Consequences of Knowledge

1.5 Consequences of Ignorance

1.6 Summary

1.7 Questions for Discussion

1.8 References

Chapter 2 P2I2 Success Formula

2.1 Major Factors in Risk Management Capability

2.2 People: The Human Element

2.3 Process: The Steps to Manage Risk

2.4 Infrastructure: The Organizational Foundation

2.5 Implementation: The Project Execution

2.6 Summary

2.7 Questions for Discussion

2.8 References

Chapter 3 Risk Management Map

3.1 The Road to Risk Management Capability

3.2 Risk Management Map Directions

3.3 Journey from Problem to Opportunity

3.4 Journey from Novice to Expert

3.5 Summary

3.6 Questions for Discussion

3.7 References

Part II Risk Management Process

Chapter 4 Identify Risk

4.1 Define the Risk Identification Process

4.2 Develop Risk Checklists

4.3 Define the Risk Assessment Method

4.4 Develop the Risk Management Form

4.5 Establish the Risk Database Schema

4.6 Summary

4.7 Questions for Discussion

4.8 References

Chapter 5 Analyze Risk

5.1 Define the Risk Analysis Process

5.2 Define Risk Analysis Techniques

5.3 Define Risk Evaluation Criteria

5.4 Establish the Risk Prioritization Scheme

5.5 Summary

5.6 Questions for Discussion

5.7 References

Chapter 6 Plan Risk

6.1 Define the Risk Planning Process

6.2 Define Risk Resolution Strategies

6.3 Define Selection Criteria

6.4 Develop the Risk Action Plan Template

6.5 Summary

6.6 Questions for Discussion

6.7 References

Chapter 7 Track Risk

7.1 Define the Risk Tracking Process

7.2 Define Risk Tracking Techniques

7.3 Define Risk Measures and Metrics

7.4 Define Triggering Devices

7.5 Summary

7.6 Questions for Discussion

7.7 References

Chapter 8 Resolve Risk

8.1 Define the Risk Resolution Process

8.2 Define Risk Resolution Techniques

8.3 Define Risk Management Return on Investment

8.4 Develop a Corrective Action Procedure

8.5 Summary

8.6 Questions for Discussion

8.7 References

Part III Risk Management Infrastructure

Chapter 9 Develop the Policy

9.1 Obtain Commitment

9.2 Allocate Resources

9.3 Survey Existing Practice

9.4 Define Draft Policy

9.5 Review Draft Policy

9.6 Document Policy

9.7 Approve Policy

9.8 Communicate Policy

9.9 Summary

9.10 Questions for Discussion

9.11 References

Chapter 10 Define Standard Process

10.1 Establish an Action Team

10.2 Develop the Draft Standard Process

10.3 Review the Draft Standard Process

10.4 Document the Standard Process

10.5 Approve the Standard Process

10.6 Distribute the Standard Process

10.7 Summary

10.8 Questions for Discussion

10.9 References

Chapter 11 Train Risk Technology

11.1 Prepare for Training

11.2 Develop Training Material

11.3 Apply Training Metrics

11.4 Deliver Training

11.5 Obtain Training Feedback

11.6 Summary

11.7 Questions for Discussion

11.8 References

Chapter 12 Verify Compliance

12.1 Review the Risk Management Plan

12.2 Audit Agents and Artifacts

12.3 Generate an Audit Report

12.4 Track Action Items

12.5 Summary

12.6 Questions for Discussion

12.7 References

Chapter 13 Improve Practice

13.1 Develop an Appraisal Method

13.2 Assess Risk Practices

13.3 Develop an Improvement Plan

13.4 Implement the Improvement Plan

13.5 Summary

13.6 Questions for Discussion

13.7 References

Part IV Risk Management Implementation

Chapter 14 Establish the Initiative

14.1 Review Risk Management Requirements

14.2 Plan Risk Management Activities

14.3 Budget Risk Management Activities

14.4 Schedule Risk Management Activities

14.5 Staff Risk Management Activities

14.6 Coordinate Risk Management Training

14.7 Summary

14.8 Questions for Discussion

14.9 References

Chapter 15 Develop the Plan

15.1 Outline the Risk Management Plan

15.2 Define Risk Management Goals

15.3 Define the Risk Management Strategy

15.4 Define the Risk Management Process

15.5 Define Risk Management Verification

15.6 Define Risk Management Mechanisms

15.7 Summary

15.8 Questions for Discussion

15.9 References

Chapter 16 Tailor the Standard Process

16.1 Review the Standard Process

16.2 Examine Tailoring Options

16.3 List Unique Project Factors

16.4 Recommend Process Changes

16.5 Document Standard Process Deviations

16.6 Summary

16.7 Questions for Discussion

16.8 References

Chapter 17 Assess Risk

17.1 Conduct a Risk Assessment

17.2 Develop a Candidate Risk List

17.3 Define Risk Attributes

17.4 Document Identified Risk

17.5 Communicate Identified Risk

17.6 Estimate and Evaluate Risk

17.7 Prioritize Risk

17.8 Summary

17.9 Questions for Discussion

17.10 References

Chapter 18 Control Risk

18.1 Develop Risk Resolution Alternatives

18.2 Select the Risk Resolution Strategy

18.3 Develop the Risk Action Plan

18.4 Monitor Risk Status

18.5 Execute the Risk Action Plan

18.6 Take Corrective Action as Required

18.7 Summary

18.8 Questions for Discussion

18.9 References

Part V People in Crisis and Control

Chapter 19 Stage 1: Problem

19.1 Problem Project Overview

19.2 The Process Improvement Initiative

19.3 Process Assessment

19.4 Process Assessment Results

19.5 Initiative Hindsight

19.6 Summary and Conclusions

19.7 Questions for Discussion

19.8 References

Chapter 20 Stage 2: Mitigation

20.1 Mitigation Project Overview

20.2 Risk Assessment Preparation

20.3 Risk Assessment Training

20.4 Project Risk Assessment

20.5 Project Risk Management

20.6 Project Risk Retrospective

20.7 Summary and Conclusions

20.8 Questions for Discussion

20.9 References

Chapter 21 Stage 3: Prevention

21.1 Prevention Project Overview

21.2 Risk Assessment Results

21.3 Risk Manager

21.4 Risk Practice Survey

21.5 Risk Practice Observations

21.6 Summary and Conclusions

21.7 Questions for Discussion

21.8 References

Chapter 22 Stage 4: Anticipation

22.1 Anticipation Project Overview

22.2 Proactive Risk Management

22.3 Organization Measurement Practices

22.4 Risk Management Committee

22.5 Living Lifecycle Model

22.6 Summary and Conclusions

22.7 Questions for Discussion

22.8 References

Chapter 23 Stage 5: Opportunity

23.1 Opportunity Project Overview

23.2 Fixed-Price Problems

23.3 Routine Risk Management

23.4 High-Performance Engineering

23.5 The Power Pyramid

23.6 Summary and Conclusions

23.7 Questions for Discussion

23.8 References

Epilogue

Glossary

Index

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