Risk Management Overview
The SEI Definition
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Risk versus Opportunity
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Risk Principles
Related SEI Web pages
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For More Information
The SEI Definition
Continuous Risk Management is a software engineering practice with processes, methods, and tools for managing risks in a project. It provides a disciplined environment for proactive decision-making to:
- assess continuously what can go wrong (risks).
- determine what risks are important to deal with.
- implement strategies to deal with those risk.
Note: The SEI definition emphasizes the continuous aspect of risk management, hence the name Continuous Risk Management (CRM).
The SEI uses the Webster's definition of risk:
Risk is the possibility of suffering loss.
In a development project, the loss describes the impact to the project which could be in the form of diminished quality of the end product, increased costs, delayed completion, or failure.
Risk versus Opportunity
Risk and opportunity go hand in hand. Many development projects strive to advance current capabilities and achieve something that hasn't been done before. The opportunity for advancement cannot be achieved without taking risk.
"Risk in itself is not bad; risk is essential to progress, and failure is often a key part of learning. But we must learn to balance the possible negative consequences of risk against the potential benefits of its associated opportunity."
[Van Scoy, Roger L. Software Development Risk: Opportunity, Not Problem. Software Engineering Institute, CMU/SEI-92-TR-30, ADA 258743, September 1992]
Risk Management is a software engineering practice with processes, methods, and tools for managing risks in a project. It provides a disciplined environment for proactive decision-making to:
- assess continuously what can go wrong (risks).
- determine what risks are important to deal with.
- implement strategies to deal with those risk.
Note: The SEI definition emphasizes the continuous aspect of risk management.
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Risk Principles
There are seven principles which provide a framework for effective risk management:
- Global perspective
- Forward-looking view
- Open communications
- Integrated management
- Continuous process
- Shared product vision
- Teamwork
For more details, see The Principles of Risk Management
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Related SEI Web pages
CMMI
Commercial Off-The-Shelf (COTS)
Software Acquisition Management
For More Information
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