Risk Identification

The second step in risk management is to identify all potential risk issues. This may include a survey of the program, customer, and users for concerns and problems.

Some degree of risk always exists in project, technical, test, logistics, production, and engineering areas. Project risks include cost, funding, schedule, contract relationships, and political risks. (Cost and schedule risks are often so fundamental to a project that they may be treated as stand-alone risk categories.) Technical risks, such as related to engineering and technology, may involve the risk of meeting a performance requirement, but may also involve risks in the feasibility of a design concept or the risks associated with using state-of-the-art equipment or software. Production risk includes concerns over packaging, manufacturing, lead times, and material availability. Support risks include maintainability, operability, and trainability concerns.4 The understanding of risks in these and other areas evolves over time. Consequently, risk identification must continue through all project phases.

The methods for identifying risk are numerous. Common practice is to classify project risk according to its source, either objective or subjective.

• Objective sources: Recorded experience from past projects and the current project as it proceeds

• Lessons learned files

• Program documentation evaluations

• Current performance data

• Subjective sources: Experiences based upon knowledgeable experts

• Interviews and other data from subject matter experts

Risks can also be identified according to life-cycle phases, as shown in Figure 17-5. In the early life-cycle phases, the total project risk is high because of the lack of information. In the later life-cycle phases, the financial risk is the greatest.

Any source of information that allows recognition of a potential problem can be used for risk identification. These include, but are not limited to

• Systems engineering documentation

• Life-cycle cost analysis

• Plan/WBS decomposition

• Schedule analysis

• Baseline cost estimates

4. In the broadest sense, technical risk can include engineering (often termed design) and technology, production (manufacturing), and support risks.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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