Systems Engineering for the Digital Age

Chapter 21Managing Risk

Michael Orosz

University of Southern California, Information Sciences Institute, Marina del Rey, California, USA

Introduction

This chapter discusses approaches to managing risk during project development and sustainment with a particular focus on agile‐based projects within large enterprise systems. In the Guide to the Systems Engineering Body of Knowledge (SEBoK), systems engineering risk is defined as:

… a measure of the potential inability to achieve overall program objectives within defined cost, schedule, and technical constraints [which] has two components:

1. The probability (or likelihood) of failing to achieve a particular outcome and
2. The consequences (or impact) of failing to achieve that outcome (DAU 2003)”

This definition is focused on identifying and managing risks to the processes used in designing, developing, and sustaining a system. The assumption is that the system being developed is targeted for an operating environment where customer needs and technical advances remain unchanged. The only concern in this development environment is ensuring that the product developed meets the original system requirements and is completed within a predefined budget and schedule. What is missing from this definition are the risks associated with failing to identify and capture evolving user, system, and technical requirements that are often driven by evolving end user or marketplace demands. Ignoring these evolving needs introduces risks, meaning you ...