Marketplace Issues in Software Planning and Design, Essay Example

There are four steps to risk analysis: quantitative analysis, qualitative analysis, asset valuation and safeguard selection. It is important to quantify and evaluate risks in terms of cost because this helps define the extent of the risk. In this regard, all four steps to risk analysis are essential. During the risk analysis process, it is important to think about risks in terms of cost because it will provide realistic measurements of how risk can be reduced. Lower risks will ultimately result in higher profit, therefore making risk analysis an extremely important factor to consider.

Broadly, risk analysis is used to determine the factors that will contribute to the success or failure of a project. It is essential to alter decisions so as to emphasize the positive effects while eliminating the negative ones. While it is important to consider quantitative analysis, qualitative analysis, asset valuation, and safeguard selection as a part of this equation, it would be useful to utilize these factors in addition to cost in order to independently assess each aspect of a project. This will enable project managers to determine when input is too costly compared to the revenue that the output will generate. When this is done at each level of the project, it will allow for modifications that could result in the success of a project despite the failure of some of its components. It would be helpful to add to this analysis by using methods like applied information economics due to its ability to adjust subjective probabilities and determine the value of additional information in the project. Understanding of the subjective probabilities may allow the project team to more efficiently predict cost.

References

Messerschmitt DG, Szyperski C. (2004). Marketplace Issues in Software Planning and Design. IEEE Software, 21(3): 62–70.

Rao PM, Klein JA. (1994). Growing importance of marketing strategies for the software industry. Industrial marketing management, 23(1): 29–37.