Risk Summary

All members of the enterprise developing the system must understand the need to pay attention to the existence and changing nature of risk. Consequences that are unanticipated can seriously disrupt a development effort. The uneasy feeling that something is wrong, despite assurances that all is fine may be valid. These kinds of intuitions have allowed humanity to survive the slings and arrows of outrageous fortune throughout history. Though generally viewed as non-analytical, these apprehensions should not be ignored. Experience indicates those non-specific warnings have validity, and should be quantified as soon as possible.

Summary Points

• Risk is inherent in all activities.

• Risk is composed of knowledge of two characteristics of a possible, negative future event: probability of occurrence and consequences of occurrence.

• Risk management is associated with a clear understanding of probability.Risk management is an essential and integral part of technical program management (systems engineering).Risks and uncertainties must be identified, analysed, handled, and tracked.There are four basic ways of handling risk: avoidance, transfer, acceptance, and control.

• Program risks are classified as low, moderate, or high depending on consequences and probability of occurrence. Risk classification should be based on quantified data to the extent possible.