ISBN : 978-81-963532-2-3 (E-Book) p =r* s Where, p is the priority with which the risk must be handled, r is the probability of the riskbecoming true, and s is the severity of damage caused due to the risk becoming true. If allidentified risks are prioritized, then the most likely and damaging risks can be handled first andmorecomprehensive riskabatementprocedures can bedesignedfor theserisks. RiskContainment After all the identified risks of a project are assessed, plans must be made to contain the mostdamaging and the most likely risks. Different risks require different containment procedures. Infact,most risks requireingenuityon the part oftheproject manager in tacklingthe risk. Therearethreemain strategiestoplanforriskcontainment: Avoid the risk- This may take several forms such as discussing with the customer to change therequirements to reduce the scope of the work, giving incentives to the engineers to avoid the riskofmanpower turnover,etc. Transfer the risk- This strategy involves getting the risky component developed by athirdparty,buyinginsurancecover, etc. Riskreduction-Thisinvolvesplanningwaystocontainthedamageduetoarisk.Forexample,ifthereis risk that somekeypersonnel mightleave, new recruitment maybeplanned. RiskLeverage To choose between the different strategies of handling a risk, the project manager must considerthe cost of handling the risk and the corresponding reduction of risk. For this the risk leverage ofthedifferent risks can becomputed. Risk leverage is the difference in risk exposure divided by the cost of reducing the risk. Moreformally, riskleverage=(riskexposurebeforereduction– riskexposureafterreduction)/(costofreduction) Riskrelatedtoscheduleslippage Even though there are three broad ways to handle any risk, but still risk handling requires a lot ofingenuity on the part of a project manager. As an example, it can be considered the optionsavailable to contain an important type of risk that occurs in many software projects – that 193 Software Engineering Keerthana P, Manasa KN, Ganga D Bengal
199 Publizr Home