It s All About Risk


It's All About Risk

Risk is perhaps the most important parameter to consider in funding and planning a project. That is why the simple model I have defined in this chapter correlates four traditional project parametersscope, quality, speed, frugalityand then adds risk as a fifth variable. If you were planning to paddle a canoe down a river, you'd want to know whether the rapids were class three or class five. The latter would be a lot riskier, so you might decide to spend a little more money on your boat. The same is true for software development investments: It is worthwhile to assess the risks before deciding what resources to allocate to a project. But remember, resources are only one side of the square base; you must consider them in concert with scope, time, and quality. It is the combination of these four parameters, along with the quality of the team, which ultimately determines the risk profile.

The simple pyramid model also shows how much you must trade off to improve your probability of success. Although it is speculative, the model helps us to soberly decide whether we are willing to invest the resources required to raise our probability of success above the minimum threshold acceptable for our business, given the scope, quality, and time constraints that we specify.[11]

[11] Max Wideman has incorporated some of the material of this chapter in his recent book, A Management Framework for Project, Program and Portfolio Integration (Victoria: Trafford Publishing, 2004) with my blessing. His Chapter 8 begins with the project pyramid idea and further extends it. As I began my study with "his" tetrahedron, this is only fitting and proper.




The Software Development Edge(c) Essays on Managing Successful Projects
The Software Development Edge(c) Essays on Managing Successful Projects
ISBN: N/A
EAN: N/A
Year: 2006
Pages: 269

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