Software Project Management - Old Questions

3. Explain the risk type and also explain in details how will you managing risks.

Answered by Anonymous

Risk is an unexpected event; happening of which can cause loss or sort of harm.

Risk Types: Interest Rate Risk: It is the risk of adverse effect of interest rate movements on a firm’s profits or balance sheet. Credit Risk: It is the risk which may arise due to default of the counter-party. Liquidity Risk: It is the risk which arises if the given asset or fund is not traded at right time in the market. Internal Business Risk: it is due the inefficiency of management in the business. External Business Risk: This type of risk arises due to external environment in the business. Financial Risks: This risk originates due to improper composition of the operations. Market Risk: This is the risk which occurs due to market conditions which results in reduction in returns expected on investment. It is also referred to as price risk. All risk management processes follow the same basic steps, although sometimes different jargon is used to describe these steps. Together these 5 risk management process steps combine to deliver a simple and effective risk management process

Step 1: Identify the Risk. You and your team uncover, recognize and describe risks that might affect your project or its outcomes. There are a number of techniques you can use to find project risks. During this step you start to prepare your Project Risk Register.

Step 2: Analyze the risk. Once risks are identified you determine the likelihood and consequence of each risk. You develop an understanding of the nature of the risk and its potential to affect project goals and objectives. This information is also input to your Project Risk Register.

Step 3: Evaluate or Rank the Risk. You evaluate or rank the risk by determining the risk magnitude, which is the combination of likelihood and consequence. You make decisions about whether the risk is acceptable or whether it is serious enough to warrant treatment. These risk rankings are also added to your Project Risk Register.

Step 4: Treat the Risk. This is also referred to as Risk Response Planning. During this step you assess your highest ranked risks and set out a plan to treat or modify these risks to achieve acceptable risk levels. How can you minimize the probability of the negative risks as well as enhancing the opportunities? You create risk mitigation strategies, preventive plans and contingency plans in this step. And you add the risk treatment measures for the highest ranking or most serious risks to your Project Risk Register.

Step 5: Monitor and Review the risk. This is the step where you take your Project Risk Register and use it to monitor, track and review risks.