Cancellation

Risk is inherent in every challenging program; the key is to select or set realistic performance, cost and schedule requirements. To quote General Patton: "Take calculated risks. That is quite different from being brash." The "no-risk approach" option is rarely available. Instead there are many situations where major risks can be avoided through the techniques summarised below.

1. Requirements scrubbing - The requirements should be analysed to identify requirements of marginal value and these should be eliminated or scrubbed if they significantly complicate the hardware or software.Selection of most promising options - In most situations several options are available, and a trade study should be performed to select the most promising one.

2. Staffing and team building - A pro-active approach should be taken to avoid the risk of personnel shortfalls.

For high risk technical tasks, control and avoidance often need to be supplemented by the following approaches:

• Early initiation of development activities.Initiation of parallel developments.Implementation of extensive analysis and testing.

• Contingency planning.

The high risk technical tasks also involve high schedule and cost risks. Cost and schedule are impacted if technical difficulties arise and the tasks are not achieved as planned. Schedule risk is controlled by early development and procurement of long-lead items and provisions for parallel-path developments. However, these activities also result in increased early costs. Testing and analysis can provide useful data in support of key decision points. Finally, contingency planning involves weighing alternative risk mitigation options.

In many cases, risks will be accepted or watched, risk acceptance is usually done when the risk is judged too low for formal mitigation, or when there appears to be no viable way to reduce the risk. If a risk is accepted, the rationale for this decision should be documented. Risks are watched when there is an objectively defined, verifiable and documented threshold of performance, time, or risk exposure (the combination of likelihood and consequence) that will trigger risk mitigation planning or invoke a contingency plan if it is needed.

Adequate consideration should be given early to technology demonstrations, models, simulations, and prototypes as part of risk mitigation planning.