Managing risks is a crucial part of any software development project. Risks are uncertainties that can affect the quality, schedule, budget, or scope of the project. If not identified, assessed, and mitigated, risks can lead to failures, delays, cost overruns, or unhappy customers. In this article, you will learn how to manage SDLC risks using a systematic and proactive approach.
The first step to manage SDLC risks is to define a risk management plan. This is a document that outlines the objectives, roles, responsibilities, processes, and tools for risk management in the project. The plan should also include the criteria for risk identification, analysis, prioritization, response, monitoring, and communication. A risk management plan helps to establish a common understanding and a consistent approach for dealing with risks throughout the project lifecycle.
A big emphasis needs to be put on communication. Stakeholders for a risk communication plan need to be identified and communicated to. It’s not enough for the implementation team to understand the risks and consequences but those need to be broadcasted to a wider audience so stakeholders are not surprised in the future.
The next step is to identify and document the potential risks that could affect the project. This can be done by using various techniques, such as brainstorming, interviews, surveys, checklists, historical data, or expert opinions. The risks should be recorded in a risk register, which is a tool that captures the risk name, description, category, probability, impact, owner, and status. The risk register helps to keep track of the identified risks and their attributes.
An example of a risk register I’ve used at various firms is called the RAID log. RAID stands for Risks, Actions, Issues and Decisions. If used effectively, the RAID log can serve as the single source of truth for all important decisions that impact a project.
The third step is to analyze and prioritize the risks based on their probability and impact. This can be done by using qualitative or quantitative methods, such as risk matrices, scoring models, simulations, or decision trees. The purpose of this step is to determine which risks are the most significant and require the most attention. The risks should be ranked according to their severity and urgency.
In my experience, it is always important to pick at least two prioritization techniques from the beginning of the project(s) to foster alignment to the evaluation
The fourth step is to plan and implement the appropriate risk responses for each risk. This can be done by using four strategies: avoid, transfer, mitigate, or accept. Avoiding means eliminating the risk or its source. Transferring means shifting the risk or its consequences to a third party. Mitigating means reducing the probability or impact of the risk. Accepting means acknowledging the risk and its effects. The risk responses should be documented in the risk register and assigned to the responsible parties.
The fifth step is to monitor and control the risks throughout the project. This can be done by using various tools, such as risk reviews, audits, reports, dashboards, or indicators. The purpose of this step is to measure the performance of the risk management process and the effectiveness of the risk responses. The risks should be updated, tracked, and communicated regularly. The risk register should be reviewed and revised as needed.
The sixth and final step is to learn and improve from the risks and their outcomes. This can be done by using techniques, such as lessons learned, feedback, or retrospectives. The purpose of this step is to capture the best practices, challenges, and opportunities for improvement in risk management. The lessons learned should be documented and shared with the relevant stakeholders and applied to future projects.
How about reducing your exposure to risk? If you have a maximum of 2 weeks of undelivered work at any time, that's a lot less exposure to risk than if you have 6 months or more of undelivered work. If you seriously cut down your exposure to risk, then you can seriously cut the effort and money you need to spend on other approaches to risk.