Risk Management

Software Engineering Risk Analysis: Understanding the basics

The importance of risk analysis in software projects is obvious from the fact that no Software Development Life Cycle has been completed without active consideration of areas with different types of risks.

The areas most vulnerable are those covered by the risk analysis process

1) Assessment of Risk

2) Identification of Risk

3) Communication about the Risk

4) Risk Management

5) Defining Risk-Related Policies

These terms, which are related to Risk Analysis, must be understood.

Let’s find out what Risk Analysis actually is.
It’s a technique that is used to assess and identify various factors that could impact the success of a project. These factors could pose a risk to the project. This is why risk analysis includes the scientific assessment and evaluation of potential threats to the achievement of organizational goals.

The risk analysis technique helps to identify preventive measures that will reduce the likelihood of these threatening factors. This includes the identification of countermeasures that can be used to overcome these constraints. The goal is to prevent the company from suffering devastating trade-related consequences.

FRAP (Facilitated Risk Analysis Process), is one of the most popular risk analysis techniques in IT sector.

What is Risk Assessment?
The purpose of risk assessment is to determine the amount and quality of risks associated with a known threat. It covers thorough evaluation of existing security & environment related aspects with a view to assess the probability of harmful effects of the threats to the organization. A risk assessment is the first and most important step in a risk management plan.

What is Business Impact Analysis (BIA)?
Business impact analysis is the study of critical functions that are essential to the operation of an organization. Business impact analysis is the process of identifying critical and non-critical functions within an organization. If the implications of a function are unacceptable to the company, or if it is required by customers or has constraint on internal operations, or if they have unacceptable financial consequences, that function is considered critical.

What is Risk Management?
Risk management is a method of managing uncertainty that comes with a threat. The development of strategies to manage the risk is part of risk management.

– Transferring the risk to another party

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– Take actions to eliminate all risk

– To reduce the damage caused by the inevitable risk

– Accepting some or all of the risks associated with a given risk.

Below are some of the most common risks associated with software products.

1) Product size-related risks
Unexpectedly large deviations from the expectations can also be a problem due to the product’s size. As a best practice, the expectations from the product are compared with similar situations encountered in the past & learning from the past happenings.

Some of the potential risks associated with large software products can be:

– It is possible to be threatened by judging the size of the product

– A threat to the product’s use can be the judge on its usage.

– A threat to the database’s size can be judged

Uncontrolled changes to product requirements could pose a danger to product size

2) Business Risks
Certain risks and threats could have an adverse effect on the business’s performance. These are some examples of such risks:

– The software product’s quality has an impact on the company’s revenue.

– Products delivery dates that have an impact on the company’s business, as well as costs associated with delayed delivery.

– Uncertain customer needs having an impact on company business

– The company has seen a dramatic change in the number expected to use its product, which is a negative impact on their business.

– The customer is not receiving the necessary help or documentation.

3) Customers’ Risks
Every customer has a unique personality. We can categorize customers in the following way according to their behavior & reaction to the product delivered to them.

Type of customers who will happily accept a product as is upon delivery

– Type of customers who are of complaining nature & usually tend to grumble on the quality of the product delivered to them. This customer poses a risk to the project manager.

Type of customers who have been associated with the product development company in the past

– Customers who are knowledgeable about the product.

– These customers have a good understanding of how to use the product

– Customers who are able to understand the process of software engineering

Type of customers that are open to participating in the SDLC review process

– Type of customers who are not much aware of the product & start using it as & when it comes

– Type of customers who are technically clear about their requirements / expectations from the product & are able to define the scope of the project clearly

4) Software Engineering Process-related Risks
A clear definition of the entire software engineering process is crucial for its success. Poor planning will lead to a product that is not only dangerous for the company but also for its users.

Following guidelines / checklist can be helpful in identifying the software engineering related threats & planning their counter measures.

Ensure documentation is made available for software development.

– Make sure that everyone on the product development team, whether they are in-house or external, follows the documented process.

– Ensure the availability of a mechanism for monitoring the activities & performance of third party developers & testers, if any.

– Ensuring that someone is available to monitor and participate in the technical reviews performed by both the development and testing teams.

Ensure that the correct documentation is kept of the technical reviews’ outcomes, detailing which resources were used to identify what kind of software bugs.

Ensure that a mechanism for configuration management is available to ensure consistency in product design, development, and testing in accordance with the requirements.

Ensure that there is a way to deal with customer requests for product changes. The system should allow you to see the effect of such changes on your software product.

5) The Technology of Development Risks
Software product success is often threatened by technological issues. Following guidelines / checklist can be helpful in identifying the technology related threats & planning their counter measures.

– The use of a totally new technology to build the software can pose a threat for the company.

– Unless proper interface is developed between the software & hardware of some new configurations, there can be a cause of threat.

– If the functionality, performance, and interface of the database systems have not been demonstrated across the specific application area, it could be a sign of danger.

– The product may also require a highly specialized or new interface.

– Some specialized requirements for certain types of design or testing tools and techniques may be a source of concern or risk.

– To many requirements from the customer can place a lot on the product’s performance.

Productivity-related and quality metrics that are not available to product developers can lead to poor product quality.

6) Risks associated with development & Testing Tools:
Different types of tools and methods of testing can also cause concern during the SDLC.

Some common methods of analysis may be problematic.

Using some common documentation methods can cause concern.

– It is possible to be concerned about the use of certain methods for designing test cases.

– The use of standard tools to manage project activities could be problematic.

– Using particular tools during the SDLC for configuration management can be problematic

– Prototyping can lead to concern if you use certain tools.

– Software testing can be complicated by the use of certain tools.

– The use of certain tools to manage documentation can cause concern

7) Risks associated with the development Environment
Product success is also dependent on the environment in which it is developed. Certain factors and situations can present a risk.

– Availability of an adequate tool for the management of the software product & its development processes.

– Access to a good tool for analysis and design.

– Adequacy of performance for tools used in design and analysis of product being created

– The availability of code generators or compatriots compatible with the product being developed

– Accessibility of appropriate testing tools compatible with the product being developed.

– Possibility of configuration management tools that are compatible with the product being built.

– Compatibility between the databases and the environment in which they are used.

– Integration or compatibility of all software tools

– Equipment of skills/training to all members of the team in regards to application of tools.

8) The quality of the development personnel is a risk:
The organization will be at risk if a product is accidentally handed to lower skilled personnel. This checklist will help you to bridge the gaps.

– The deployment of the best qualified personnel for the project

– When in a team, proper combination of various personnel with different temperament & skill levels is important.

It is crucial that the designated personnel are available throughout the duration of the project. The project can be severely affected if there are nominated personnel.


We are a team of professionals with each having two decades of experience in start-ups, sales, marketing, finance, HR, large scale project and profit centre management and running mature cross functional operations. At Molw.net we are big believers that knowledge transfer is critical to our industry’s evolution. We love to share our experiences and learnings through our online resources.

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