Affordable web hosting - Chapter 5: Planning for Software Project Risks 117
Chapter 5: Planning for Software Project Risks 117 quantitative analysis because of the time and cost involved to do it correctly. It s up to you to convince them that it s worth the extra effort. The investment in completing the interviews, prototypes, and simulations is generally much smaller than responding to the crushing effects on a project s time and cost baselines if a risk is realized. Here s a trick to remember the difference between qualitative and quantitative analyses: Qualitative analysis means that you re describing the qualities of the risks; quantitative analysis gives a quantity, usually a number, and often with a dollar sign next to it, of the impacts of those risks. Qualitative analysis is better for smaller projects (under $100,000 and shorter than three months). Larger projects, with more money at stake and longer durations, require more quantitative analysis. Creating a Contingency Reserve Quantitative analysis also uses a risk impact matrix, like qualitative analysis, though a cardinal scale is mostly used here (see Ranking risks, earlier in this chapter). This risk impact matrix also quantifies the dollars or time the project stands to lose, or gain, because of the risk. What the project needs is a contingency reserve that will alleviate the expenses of the risks should they come into fruition. You know how much to set aside for this contingency reserve by using the quantitative risk impact matrix. Table 5-2 gives you an idea of what a matrix might reveal. Table 5-2 Sample Quantitative Risk Impact Matrix Risk Probability Impact Risk Score Server crashes .10 ($5,000) ($500) Lack of developers .90 ($80,000) ($72,000) Firmware changes .20 (10 days) (2 days) Requirement to install service packs .70 ($2,000) ($1,400) Rebate from Manufacturer (risk opportunity) .80 $1,000 $800 Contingency reserve needed $73,100
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