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RiskManagement

Risk management

Every activity bears a certain amount of risk. Where development and/or business management are concerned, it's often important to quantify that risk, to have a basis for making rational decisions.

The simplest way to quantify risk is to allocate

1. ) a probability of the negative outcome occurring
2. ) the impact of the negative outcome.

Tabulating these as follows:

Risk	                           Probability	Impact
Catastrophic data corruption       low	        V High
UI errors	                   High 	low

provides a basis for deciding whether the risk is worth running or not.

Equally importantly, risks should be documented. Every project by its very nature goes through change, often a risk can disappear, only to be replaced by another one (or more). A centralised record of the risks associated with a project or activity is vital information that can head off disaster before it happens.

The book 'Managing Projects with Prince2' has a thorough discussion of risk recording and management.