Explain Risk Management -

A risk is a potential problem – it might happen and it might not. A software project can be affected by a large variety of risks. In order to be able to systematically identify the important risks which might affect a software project, it is necessary to categorize risks into different classes. The project manager can then examine which risks from each class are relevant to the project.
Conceptual definition of risk
- Risk concerns future happenings
- Risk involves change in mind, opinion, actions, places,
- Risk involves choice and the uncertainty that choice entails
Two characteristics of risk

Uncertainty – the risk may or may not happen, that is, there are no 100% risks (those, instead, are called constraints)
Loss – the risk becomes a reality and unwanted consequences or losses occur

They threaten the project plan
If they become real, it is likely that the project schedule will slip and that costs will increase

Those risks that can be uncovered after careful evaluation of the project plan, the business and technical environment in which the project is being developed, and other reliable information sources (e.g., unrealistic delivery date)

Those risks that can and do occur, but are extremely difficult to identify in advance

Market risk – building an excellent product or system that no one really wants
Strategic risk – building a product that no longer fits into the overall business strategy for the company
Sales risk – building a product that the sales force doesn’t understand how to sell
Management risk – losing the support of senior management due to a change in focus or a change in people
Budget risk – losing budgetary or personnel commitment