Overview

This article provides an overview of Risk Management and .

Let's start with the basic concepts.

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Concepts and Terminology

Risk

In general, we can define Risk

Concepts and Terminology

Risk

In general, we can define Risk as the “effect of uncertainty on objectives” (ISO 31000:2018) that can be positive (opportunity) or negative (threat).

We can also look at it as an uncertain event with a positive or negative effect on the measurable success-criteria of a project.

Therefore, and as a way to overcome a common misconception, risks are not always negative; however, many times we may be more focused on these ones. 

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• dependency on unsupported open-source library
• dependency on a closed, proprietary library without access to source-code 
• replacement of relational database with a NoSQL one
• lack of sample data
• inability to thoroughly verify/discuss requirement requirements with customer
• new technology, never used before
• lack of skills within the team

Level of Risk

The level of risk, sometimes just simply called "risk value" or "risk," , can be defined as a combination of the probability/likelihood and the impact/consequence of an event on the objectives.

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It can be defined as a percentage, a number interval (e.g. 0-4) or as a ordered list of values (e.g. "low", "medium", "high", "very high."). 

Probability can be evaluated using multiple weightned weighted criteria/factors (e.g. software maturity, software complexity, type of change, number of changed components, related defect rate, etc).

Impact / Consequence

Outcome The outcome of an event affecting objectives. In other words, it can also be defined as the overall loss or revenue that could occur IF the risk occurs.

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• Can be positive (i.e. an "opportunity") or negative (i.e. ”threat”)
• Can be evaluated using multiple weightned weighted criteria
  • frequency of use, number of affected users, category/significance of affected users, type of impact, etc

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Thus, if the probability of an event is 0, that risk won't happen. Likewise, a risk with no impact also leads to a risk score of 0.

Having an a high-impact risk by itself may be is not something not to worry much about unless the probability of the associated event is "high" enough.

Impact may be defined as a number interval (e.g. [0-4]) or as a ordered list of values (e.g. ["low", "medium", "high", "very high"]). 

Source

The risk source is the "element which alone or in combination has the intrinsic potential to give rise to risk" (ISO 31000). 

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• unclear requirements
• external library
• external stakeholder
• regulatory constraints
  
• adoption of new process 
• ...

Criteria

Risk criteria corresponds correspond to the "terms of reference against which the significance of a risk is evaluated" (ISO 31000).

"Criteria can be imposed by, or derived from, legal and regulatory requirements and other requirements to which the organization subscribeorganization subscribes."

This risk criteria includes the definition of multiple levels for the probability and impact variables. 

Assess the risks by calculating the likelihood and impact each requirement could have on the project taking the defined criteria's like cost, schedule, resources, scope, technical performance safety, reliability, complexity, etc. into consideration.

Examples: cost, schedule, resources, scope, technical performance safety, reliability, complexity, 

ers, together 
with the risk analyst, inform values to metrics like 
complexity, cost, size, quality, and others in order 
to find the Risk Exposure (RE) value for each 
functionality

Examples:

• ???

Categories

Risk categories are a way of classifying and grouping risks together.

Examples:

• business
• technical
• operational
• project management
• external
• compliance
• ...

"Types" of Risks

Inherent Risk

Categories

Risk categories are a way of classifying and grouping risks together.

Examples:

• business
• technical
• operational
• project management
• external
• compliance
• ...

"Types" of Risks

Inherent Risk

Existing risk, and implicit Existent risk, and implicitly risk level, before any treatment actions are taken.

Residual Risk

Remaining risk, and implicitly residual risk level, after risk treatment actions have been taken.

Exposures

Exposure

Although not part of ISO 31000, "exposure" is commonly used to refer a the categorization (e.g. "low", "medium", "high", "severe") of the risk based on its level. Sometimes it's also use used as a synonym for the calculated risk level value, so please be aware of it.

Residual Exposure

Residual exposure corresponds to the exposure after treatment, based on the remaining residual risk. Sometimes it's also use a synonym used as a synonym for the calculated residual risk level value, so please be aware of it.

Risk Register

The Risk Register is used to store and document risks along with the risk treatment responses. It is an essential tool for assisting on with the risk management activities that can give visibility of current risks, and help on in the process of documenting and reviewing them.

Risk Management

Risk Management corresponds to the "coordinated activities to direct and control an organization with regard to risk.".

All organisations organizations and projects are subject to risks , of many different categories , that may or not happen and , if so, may impact on the defined objectives.

The purpose of Risk Management is to have a systematic approach to address risks effectively by having the defined objectives in mind, by taking advantage of them in case they're there are opportunities that benefit our objectives, or by minimizing threats that may impact negatively on what we foresee to achieve.

Risk Management Process

There are a set of activities that are part of the Risk Management Process: Establishing the Context, Risk Assessment, Risk Treatment, Monitoring & Reviewing. Risk Assessment is in turn composed of Identification, Analysis and Treatment.

The overall process starts by establishing the context, so users have a common understanding on of the objectives, on the internal/external "constraints" and agree on the definition of risk criteria.

After that, users will identify and describe the risks, analyze them as a means to obtain its their characteristics (e.g. risk level), and decide what actions (i.e. treatments), if any, to take depending on the latter.

Monitoring and reviewing of risks is an ongoing activity that provides a feedback loop to the whole Risk Management Process, to depict changes on in context, risk criteria, risks themselves and related treatments.

0.

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Establishing the Context

The foundation of the Risk Management Process is establishing the context.

The context Context provides information about the objectives that need to be pursued and also the internal and external environments or contexts that be are involved.

Part of setting the context is the definition of risk criteria itself, based on the internal and external contexts and on the objectives to be pursuepursued.

1. Risk Assessment

Risk assessment corresponds to the overall process of performing risk identification, analysis and evaluation (ISO 31000).

1.1. Risk Identification

Risk identification is the process of finding, recognizing and describing risks (ISO 31000). 

1.2. Risk Analysis

Per ISO 31000, it corresponds to the: "Process to comprehend the nature of risk and to determine the level of risk. Risk analysis provides the basis for risk evaluation and decisions about risk treatment. Risk analysis includes risk estimation."

In other words, and oversimplifying it a bit, the purpose of this activity is to assess the event probability/likelihood and impact for the identified risks. This may involve answering a set of well-defined weightned weighted questions to find out their value.

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Probability and Impact can be defined as integers with a limited range (e.g. 0-4). By having a very limited range for the values, it makes the process more manageable and easier to perform.

After having agreed on the risk's probability and impact, The the same principle can be applied to the calculated risk level which we may categorize by truncating it to something similar to, for example:

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If you segment the calculated value or not, and how you do that, is a bit more or less up to you.

This is an example of a risk matrix with the calculated risk levels. You may also use colours to quickly depict the higher risks.

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1.3. Risk Evaluation

Per ISO 31000, it corresponds to the "process of comparing the results of risk analysis with risk criteria to determine whether the risk and/or its magnitude is acceptable or tolerable. Risk evaluation assists in the decision about risk treatment".

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In the end, users need to decide whether risks are acceptable or tolerable, of or if they want to modify them instead by treatment measures. As an example, you may decide to apply treatments only on risks categorized as "high," , "very high" or "severe.".

2. Risk Treatment

Risk Treatment comes as a natural consequence of Risk Evaluation and it corresponds to the "process to modify risk" (ISO 31000).

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Whenever acting on a risk, users can apply one or more of the several possible response strategies (i.e. treatments,) , depending on the nature/consequence of the risk (i.e. positive or negative risk.).

Briefly, some possible "treatments" are:

• Positive Risk (i.e. "opportunity")
  • Enhance (increase the probability of happening)
  • Share (allocate some/all ownership to a third party)
  • Exploit (ensure opportunity is realized)
  • Accept (leave it as-is and simply take advantage of it, if and when it happens)
• Negative Risk (i.e. "threat")
  • Mitigate (reduce probability of happening)
  • Transfer (transfer it to a third party entity, which may leave some residual risk though) 
  • Avoid (remove/eliminate risk source)
  • Accept (acklowledge acknowledge it; don't do nothing anything about it)

3. Parallel, ongoing activities

3.1. Communication and consultation

"Communication and consultation with external and internal stakeholders should take place during all stages of the risk management process."

 Communication should happen continuously in order to leverage other activities.

First of all, internal and external stakeholders should be consulted, as a means to establish the context (or reviewing it later on.) . However, all of them are invited to provide feedback on the remaining activities as projects/systems and risks evolve in a dynamic.

3.2. Risk Monitoring and Reviewing

These are some of the questions we need to answer.

• Can a risk be closed?
• Did the impact or likelihood change?
• Have new risks arisearisen?
• Did any of the contexts change?
• What have we learn learned from past events? Are we actively analyzing them?

"Risk monitoring and reviewing" tries try to answer the previous questions; it can be seen as an active surveillance over the whole process as means to ensure that we're effectively on control.

Risk Management in Jira

There are several apps for Risk Management in Jira.

However, they follow different approaches for to handling risk. 

Some of them perform Risk Management...

• at the issue level with some custom fields
• or at the project level, using a specific issue type

References

• Risk

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RBT (Risk-Based Testing) is a testing strategy that follows the principles of Risk Management but in testing context.

In software development projects, or in any development project in general, there are a set of common objectives among other ones:

• "quality" 
•  cost control
• time-to-market (i.e. target release/delivery dates)

These goals can be affected by risks coming from different sources (internal or external), due to all sorts of factors. In case of negative risks, the risk level will depend on things such as the complexity of the change, number and kind of impacted users, frequency of usage, likelihood of failure, etc.

Risks can affect the overall quality, including the customer perceived quality. Quality is a broad word embracing "fit" of the product to customer needs and many quality attributes. Intrinsic part of quality is ensuring that a product has few bugs (or at least reduce the probability of bugs on important/risky areas).

If testing is performed as means to find/avoid bugs, RBT can be used as a "mitigation", or even as a "avoidance", strategy.

On the other hand, testing is also about understanding, discovering and providing valuable feedback that can help build "better" features and better products. In that sense, RBT may be used to perform thoroughly testing or doing it more lighter/roughly depending on the risk. 

Thus, RBT can be seen as a strategy that uses risks as means to adequate testing (depth and priority) in order to maximize testing goals. It will affect all testing activities (e.g test planning, design, execution).

Therefore, RBT assists on taking testing related decisions based on assessment of risks.

Purpose

The main purpose of RBT is to use risk management principles to adequate testing.

First of all, it provides a framework for clear communication and discussion of risks, by defining terms and a common language; it also makes risks visible and actionable.

RBT covers customer needs and also development team needs, using risks as the input to support testing activities.

Customer are mostly concerning about business features, timing, visible quality and costs.

Development team has similar concerns; however, it sees quality in a broader scope as it has to maintain and possibly evolve the product being developed. Timing and costs need to be managed effectively to be on budget and avoid delays; however quality must not be hurt and if decisions need to be taken to meet timing/costs criteria, RBT can provide the means to ensure that focus will be given to the features/issues that matter most to customers.

Both customers and development team want to avoid important defects, thus RBT focus testing effort in what matters most, on where we can get most value from.

Overall, RBT purpose and benefits can be sumed up as:

• Focus more on customer
  • test more thoroughly what customers are more concerned with
    
    • deliver what is most important to business
• Reduce probability and impact of negative risks
  
  • by focusing testing on higher, negative risks, probability of missing important defects lowers and therefore the probability assigned to the risk lowers as its corresponding risk level; on the other hand, as testing also provides feedback to the team including its developers, impact of a certain risk may be also decreased as the feature being worked out may be done differently/better
• Increase risk level of positive risks
  • If an opportunity is identified, RBT can be used to provide thoroughly testing and take advantage of it. If a feature is being implemented and if the team finds that making it slighter differently, perhaps by generalizing it further, for examplem or making it more visible, it can increase the probability of the positive risk happen, as end users may start using it for additional scenarios and thus increase the product added value. Using testing as a constructive feedback loop, knowing the opportunities and their relative relevance, can increase the likelihood, impact and the overall risk level for opportunities
• Find important defects sooner
  
  • RBT can help on finding more important defects first, by focused testing on higher risks (paper)
• Optimize QA effort
  • RBT can answer questions such as...

• • • What should we test? Everything? But we don't have time...
    • When can we stop testing? We have to make the release and move on...
    • Can we reduce the testing effort somehow? How and at what "cost"?
    • If we have more time for testing, what is the best way to take advantage of it?
  • RBT provides the means to define the testing scope, focusing on what is relevant, by identifying what tests to execute and their execution priority, given time and resource constraints 
  • RBT provides a way (based on risks) to choose tests for regression testing
  • RBT provides some clues for selecting candidates for automation

• Make a release go/no go decision based on risks
  • sometimes you may need to ship the product sooner, for time or budget constraints
    • RBT can give you visibility of risks, so you can take a go/no go decision "knowing the risk"
  • RBT implicitly explains why certain tests where executed over other ones, and thus eases communication with other stakeholders and avoids discussion on why some tests where not executed at all
• Increased confidence
  • by focused testing on the higher risks (or risky areas/features), RBT ensures that important items are exhaustively tested and import defects are found sooner; thus, product and it's most important items (e.g. features) can be released with a high degree of confidence, while ensuring they meet expected quality goals

RBT at different levels

Risks may be evaluated at different levels:

• at project level

  Expand
  title Examples...
  missing cross-functional knowledge on team outsourcing IP

• at "requirement" (e.g. Story) level

  Expand
  title Examples...
  open-source library support performance degradation in concurrent scenarios

• directly at Test level

  Expand
  title Examples...
  validation of specific scenarios/use cases

Many teams perform RBT identifying and evaluating risks at "requirement"/Story level: thoroughly testing is performed on risky "requirements", while less riskier "requirements" are tested in a more pragmatic way.

However, sometimes "requirements" may not exist at all, defined explicitly as such. This may be common in scenarios where teams inherit legacy projects, that have few or no "requirements" but that have Tests that validate the intended behaviour.

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Project level

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"Requirement" / User Story level

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Test level

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Pros

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• some risks may simply be project wide

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• most common approach
• allows to decide whether a story should be addressed and how based on its risk
• shapes the tests definition on the Test Design phase taking into account the risk

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• allows distinct priorization of Test cases for the same requirement
• allows RBT in projects without requirements (e.g. legacy projects)

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Cons

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• misses a more granular way of assessing risks and addressing them

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• not differentiates between Tests for the same story, although some additional criteria (e.g. ”priority”) could be used for that
• not applicable to projects without requirements

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• a lot of effort to evaluate Risk for tons of test cases
• Tests are not specified taking into account requirement risk; applies only to existing test cases and not to new ones (at the acceptance criteria would probably be a better approach)

• management - Principles and guidelines: ISO 31000:2009(E)
• ISO/IEC 25010:2011 and old ISO 9126:1999 (brief, non-official overview)

RBT Process

RBT is much more besides selecting what Tests to execute and their order; RBT affects test planning, authoring and execution.

1. Risk Identification
2. Risk Analysis
3. Risk Response
4. Test Scoping
5. Test Process definition

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The overall process involves the following macro-activities.

1. What and how "things" can affect our project?
   1. Risk Identification
      1. identification of risks to product (e.g. software/hardware) features; this is normally performed by the team and discussed together
      2. risks are identified before implementation starts and are reviewed throughout the development life cycle; new risks can be identified during implementation
   2. Risk Analysis
      1. risks are discussed together in the team (may involve customer)
      2. risks impact and probability are calculated, and thus the related risk level
2. How will he handle it, in the most effective way (i.e. the one that can return most value)?
   1. Risk Evaluation and Treatment
      1. Test Planning
         
         1. using the input from Risk Analysis, the test manager can  ..
         2. define test strategy (e.g. level of testing to perform, techniques to use, environments to choose)
         3. estimate testing effort
         4. define/estimate schedule (target dates, number of testing iterations)
      2. Test Design
         1. specification of the Tests taking the identified risks as input
         2. use more extensive data for data-driven testing if needed, using automated testing/checking
         3. tests are designed to mitigate the risk (i.e. diminish their probability)
      3. Test Execution
         1. perform testing by descending order of risk level (i.e. execute Tests related with higher risks first); experienced testers, with high degree of domain knowledge may provide more valuable feedback 
         2. thoroughly test risky items, using scripted and exploratory approaches
   2. Risk Monitoring and Reviewing
      1. look at items where you assessed the risk and evaluate if you need to take additional measures/treatments ("Are those items having failed tests? Were bugs founds? Are those bugs relevant? Did we found any new risk while testing?")

RBT in Waterfall

In projects following waterfall methodology in their SDLC, RBT can fit as follows.

<WATERFALL DIAGRAM>

1. Risk Identification & Risk Assessment
   1. BAs together with the team on the ”Requirements” (analysis) phase
2. Risk Treatment
   1. by testers, during the “Testing/Validation” phase
3. Risk Monitoring and Reviewing
   1. throughout the project lifecycle

Please note that risk factors are present in all development phases as each one is prone to risks.

RBT in Agile

Projects adopting Agile principles and values releases, software is delivered incrementaly and frequently, highly focused on customer needs and feedback. In Agile changes are welcome and not really tied to "long phases". Both Agile Software Development and RBT have the customer and its (most important needs/concerns) at the center. 

A possible implementation of RBT in Scrum based projects could be as follows. 

1. Risk Identification and Assessment
   1. Release planning (by "business stakeholders" - PO?)
      1. Highest-risk tasks must be placed in the earliest sprints
   2. Sprint planning (by the whole agile team)
      1. Testers can start creating a risk-based analysis by using the stories given for that iteration, identifying the high-risk stories that can be tested on that iteration, and prioritizing the user stories depending on their criticality to the business
      2. Risk’s impact and likelihood can be evaluated using “Risk Poker” (like planning poker)
2. Risk Treatment (by "testers")
   1. During sprint lifetime, by performing more extensive testing on high-risk stories (including for regression testing purposes)
3. Risk Monitoring and Reviewing (by whom?)
   1. During sprint lifetime,(( how??)

"Traditional", RBT and Hybrid RBT approaches

While in "traditional" testing tests are executed in "ad-hoc" way, in RBT risk is used to choose what tests to execute and their order of execution.

RBT also conditionates how testing is done (and how test cases are specified): focus is given to tests associated, directly or indirectly, with and higher risk.

In hybrid RBT, non risk-based Tests (i.e. tests specified without considering risks) are executed by the risk descending order.

References

• Risk management - Principles and guidelines: ISO 31000:2009(E)

• Souza, Ellen Polliana & Gusmao, Cristine & Venâncio, Júlio. (2010). Risk-Based Testing: A Case Study. 1032 - 1037. 10.1109/ITNG.2010.203. 

• RISK FACTORS IN SOFTWARE DEVELOPMENT PHASES, Haneen Hijazi, Msc Hashemite University, Jordan Shihadeh Alqrainy, PhD; Hasan Muaidi, PhD; Thair Khdour, PhD; Albalqa Applied University, Jordan