Introduction Many software project managers take steps to ensure that their projects are done on time and within effort and cost constraints. However, project management involves far more than tracking effort and schedule. Managers must determine whether any unwelcome events may occur during development or maintenance, and make plans to avoid these events or, if they are inevitable, minimize their negative consequences. A risk is an unwanted event that has negative consequences. Project managers must engage in risk management to understand and control the risks on their projects.
Many events occur during software development.
A loss associated with the event. For example, if requirements change dramatically after the design is done, then the project can suffer from loss of control and understanding if the new requirements are for functions or features with which the design team is unfamiliar. A radical change in requirements is likely to lead to losses of time and money if the design is not flexible enough to be changed quickly and easily. The loss associated with a risk is called the risk impact. The likelihood that the event will occur.