3.6 The Role of the Risk Analysis

A risk analysis is a list of the risks that may influence the development of the application; the risks are prioritized by the impact of each risk if realized and the likelihood of the risk. The risk analysis helps establish clearly whether this development effort should even be attempted. Table 3.2 is an example of a risk analysis.

Table 3.2. Sample Risk Analysis

No.	Category	Risk	Resolution Needed By	Status	Days Lost If It Occurs	Likelihood It Will Happen	Risk Rating
001	Interfaces	A new application needs to interface with SAP that has not yet been put into production. There could be schedule delays if this project must wait two months for the SAP project.	Jul 1, 2004	Unresolved	50	50%	25
002	User time	The majority of the user group is heavily involved in a reengineering effort. If the project team members cannot get their time, the project will be delayed.	May 15, 2004	Being investigated	70	80%	56

The risk rating is calculated by multiplying the days lost if it occurs and the likelihood it will happen. It represents the total days that should be reserved as a contingency to handle the possibility of this risk.

NOTE:

This idea is from Rapid Development (McConnell 1996).