Three Kinds of Business Risk

Posted By Jitendra on July 9, 2010 | Software Quality

C.K. Chesterton wrote, “The word ‘good’ has many meanings. For example, if a man were to shoot his mother at a range of five hundred yards, I should call him a good shot, but not necessarily a good man.”

“It’s the qualifier ‘necessarily’ that shows Chesterton possessed a truly philosophical mind”, write Thomas Cathcart and Daniel Klein, in their book Plato and a Platypus Walk into a Bar (p.81).

Yes indeed.

There’s something so neat-o about making distinctions. Good distinctions don’t simply classify — they illuminate and clarify.

I was reminded of that during a recent visit to Dallas to spend some time with Forrester analyst Mary Gerush. (That’s my colleague Lev Lesokhin, breaking into an off-the-charts-spinal-tap-volume-11 smile because he’s finally out of the Dallas heat and inside the cool Forrester digs.)

Let’s distinguish three kinds of business risk :

• Delivery Derailment Risk – risks that add IT cost or stop business revenue due to delayed launch or cancellation.
• Business Case Risk — risks that affect the quality of a delivered application; even though the application works, it doesn’t work as well as it should.  The number of successful transactions per unit time cannot be completed to fulfill the benefits articulated in the business case.
• Business Opportunity Risk — risks that make the application hard to maintain and change in the face of pressing business demand. The resulting loss of agility damages future business revenue.

You lie awake at night worrying about project derailment risk and pay scant attention to the other two.

Watch out!

Tags: business case risk, business disruption risk, business opportunity risk, delivery derailment risk, software risk