Controlling risks in projects is considered a major contributor to projects success, surveys suggested that only quarter of software projects succeed and completed as scheduled, on time and on budget, and this means billions of wasted dollars due to project failures (Charette, 2005, cited in Bannerman, 2008). It is argued that risk management for software projects could improve project outcomes, and I believe the same however, this is not limited to software projects, it covers all projects in varies industries. Good and effective risk management will improve project outcome, and help in increase project success ratio. Although risk management is so important and so effective, its outcome might not be that obvious as long as projects are running smoothly. To assess risk management processes and systems, predefined measurements should exist to better evaluate its outcome. “It is quite difficult to measure the benefits of risk management: successful risk management may prevent some problems from occurring and very few organizations have good enough measurement systems or data points to show the impact of risk management” (Kontio, 2001).
Risk management software can be divided into two main categories, being integrated and standalone. Those categories are with relation to project management software used by organizations, an example of an integrated tool is Monte Carlo add-on tool for Microsoft Project. Although Microsoft project has a PERT module that implements quantitative risk analysis, but Monte Carlo add-on overcomes some of its limitations being accuracy of results is limited to single dominant path through a precedence network, and accurate estimation of optimistic, most likely and pessimistic times (intaver, n.d.). There are other integrated tools such as @RISK and Risk+. On the other hand, standalone risk management software such as “Acertus Securac’s ERM software solution enables organizations to identify, measure, manage and mitigate risk and compliance in all aspects of the organization” (RiskWorld, n.d.). All those tools help in answering to risk related questions, and those are as identified by intaver:
· What is the chance of completing project on schedule and within budget?
· What is the chance that a certain task is on the critical path?
· Which tasks affect project duration?
· What is the project success rate?
The introduction of risk management brings lots of advantages and benefits for organizations, they “enhance various risk management processes” (Schwalbe, 2010). Organizations could use risk management software to create or update risk registers, as well track project risks and quantify them, those software aid in preparing charts and perform sensitivity analysis. “Software can be used to create decision trees and estimate expected monetary value” (Schwalbe, 2010). Advantages of risk management software vary and exceed basic benefits mentioned earlier, depending on complexity of features offered by the tool, for instance Monte Carlo simulation software “could develop models and use simulations to analyze and respond to various risks” (Schwalbe, 2010). As well some tools offer features like probabilistic and conditional branching, “An example of probabilistic branching is when the user defines that there is 40% chance that task A will be successor of task B and 60% chance that task C will be successor of task B. An example of conditional branching is when the user defines that task A task will be followed by task B if task A duration is greater or less then a certain value“ (Intaver, n.d.)
Although those tools ease project manager risk management related task, and increase project success rate, they have some disadvantages and limitations. A major limitation in risk management tools is that they rely on user input, for that if a risk was not presented to the tool because it was not originally identified, or user forgot to present it to the system it cannot be managed. For that project management should not over-rely on those tool, and still they need to identify the risks themselves, and based on their experience. “It takes hard work to develop and implement good risk response strategies” (Schwalbe, 2010, p. 450).
Other disadvantages could be software cost, as risk management software are expensive, and could add to the project budget f not already purchased and installed. Another problem could be conducting user trainings to employees and motivate them to use risk management tools instead of word editing and spreadsheets to maintain and log risks.
Risk management software could be very helpful and a major contributor to project success, as they offer lots of features that ease project manager job. Still those tools should be used with cautious, as they are bug free and require valid and complete input to provide us with expected results.
Reference:
Downes, D 2006, 'Risk management software solutions it's a fragmented marketplace', Accountancy Ireland, 38, 4, pp. 22-24, Business Source Premier, EBSCOhost, viewed 31 December 2011
Intaver, (n.d.), ‘Quantitative Risk Analysis with Microsoft Project’, [Online], Available from: http://www.intaver.com/Articles/Article_MSProjectRiskAnalysis.pdf
(Accessed 31 December 2011)
J Kontio, 2001 “Software Engineering Risk Management: A Method, Improvement Framework, and Empirical Evaluation” available online from: http://lib.tkk.fi/Diss/2001/isbn951225655X/isbn951225655X.pdf
Paul L. Bannerman, Risk and risk management in software projects: A reassessment, Journal of Systems and Software, Volume 81, Issue 12, December 2008, Pages 2118-2133, ISSN 0164-1212, 10.1016/j.jss.2008.03.059. (http://www.sciencedirect.com/science/article/pii/S0164121208000897)
RiskWorld, (n.d.), ‘Risk Related Software’, [Online, Available from: http://www.riskworld.com/software/sw5sw001.htm
(Accessed 31 December 2011)
Schwalbe, K., (2010), Information Technology Project Management (with Microsoft Project 2007 CD-ROM), 6th ed., Course Technology, 2010, ISBN 978-0-324-78692-7
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