Risk is everywhere on projects. This risk comes from two types of uncertainty. Aleatory uncertainty, which is the naturally occurring yields variances in the underlying processes. This uncertainty is handled with cost, schedule, and technical performance margins. Epistemic uncertainty comes from probabilistic processes that can be addressed with handling responses.
The idea of risk and its management and handling is a critical success factor for all software development.
One of the most rigorous theorems of economics [1] proves that the existing means of production yields greater economic performance only through greater uncertainty that is, through greater risk. While it is futile to try and eliminate risk, and questionable to try and minimize it, it is essential that risk be taken be the right risks...
We must be about to choosing rationally among risk-taking courses of action, rather than plunge into uncertainty on the basis of hunch, hearsay, or incomplete experience, no matter how meticulously quantified.
- Peter Drucker (1975) Management (From The Principles of Software Engineering, Chapter 6, Tom Glib, 1988).
Managing in the presence of risk - and the uncertainty that creates the risk - requires we make risk-informed decisions. These decisions are informed by the probabilistic and statistical outcomes of those decisions in the future. In order to make risk-informed decisions, we must estimate the outcomes and the impacts of those outcomes on future activities (cost, schedule, and technical performance of products and services). Without these estimates, there is no risk management. And as Tim Lister reminds us
Without these estimates, there can be no risk management. And as Tim Lister reminds us
Risk Management is how Adults Manage Projects. Be an adult, make estimates of the future outcomes of your risk informed decisions.
[1] Control or Economic Law Paperback, Eugen von Boehm-Bawerk, 2010.
[2] "How Much Risk is Too Much Risk," Tim Lister, Boston SPIN
[3] "Risk Management is How Adults Manage Projects," Susanne Madsen
[4] "Risk Management and Agile Software Development," Glen B Alleman
