Software Risk Management

Identify and manage threats and hazards that can jeopardize the safety or efficacy of software, systems, and smart products.

What is risk management in software engineering?

The Oxford English Dictionary defines “risk” as the possibility of loss, injury, or other adverse or unwelcome circumstance. Risk management in software engineering is the process of identifying and managing threats and hazards that can jeopardize the safety or efficacy of software products, software-based services, or software embedded in products such as airplanes, pacemakers, or automobiles.

Software risk management best practices

Risk Reuse

As products become more sophisticated, providing teams with easy access to shared assets, such as risk information, is a critical success factor. A centralized risk registry with logical groupings, such as risk classes, allows organizations to work collaboratively on projects. The ability to branch and merge sets of risk information enables teams to jump-start analysis of new products and reduce overall costs.

Risk Traceability

Risk traceability is the ability to associate risk management information with project information such as requirements, test cases, versions, and releases. Risk traceability allows organizations to understand risks in context. It is essential for managing change, tracking risk activities, and instilling a culture of safety and risk management throughout the organization.

Risk Change Management

Risks change as analysis uncovers new information, product requirements evolve, or new adverse events are reported. Successful risk management requires a process to analyze, approve, and communicate changes to project stakeholders. It also requires traceability in order to notify individuals and teams of new information that may impact work in progress.

Risk Management Workflows

Risk management workflows help tame the complexity of managing risk-related activities throughout your product portfolio. Customizable workflows help organizations follow a structured process to manage risk in new projects, respond rapidly to escalations, or prepare for regulatory audits.

Risk Monitoring and Reporting

Monitor your overall risk levels through dashboard, reports, and matrix diagrams that let you analyze the performance of your mitigation actions at a glance. Risk monitoring and reporting helps keep all team members up to date with the latest information.

Failure Mode Effects Analysis (FMEA)

FMEA is a powerful technique for managing risk. The FMEA framework is built around the identification of potential failure modes, or risks. Each risk is analyzed to determine its probability, detectability (controllability), and severity. Once analyzed, risks are prioritized and classified, and a mitigation strategy developed. FMEA is widely used in safety-critical systems development and can play an important role in achieving compliance with regulatory standards.

Corrective Action Preventive Action (CAPA)

CAPA improves process quality by documenting, identifying, and fixing the root cause of errors. It tracks non-conformities, which can consist of undesirable outcomes (i.e. a rash when using a medical device), production errors (i.e. a substandard paint job), and other negative outcomes. The CAPA framework enables organizations to conduct root cause analyses, improve design, manufacturing and QA processes, and continuously monitor outcomes.

The risk management lifecycle

Hazard Analysis

The first step is to evaluate potential conditions that may lead to failure or accidents, group these hazards into scenarios, and identify each scenario’s high-level probability.

Risk Identification

Risk identification consists of a detailed assessment of potential adverse events, their probability of occurrence, and their potential impact, or severity. When hazards have already been identified, this step provides more detailed analysis.

Classification and Assessment

Risks are classified according to industry-specific guidelines that take both probability and severity into account. Classification guidelines vary by industry, and within industries, by regulatory authority. Proper classification helps ensure that products are fit for the market.

Risk Mitigation

Risks are mitigated by identifying controls that can either prevent, reduce the likelihood of, or minimize the severity of their occurrence. For example, to prevent potential injuries from falling out of a moving automobile, automatic door locking may be proposed as a control. Controls may consist of product features, QA automation, performance requirements, inspections, and more.

Risk Reduction Planning

Controls are put into a plan to make them actionable by the organization. The plan identifies the steps the organization will take to implement the controls and assigns them to responsible individuals or teams.

Documentation and Reporting

Dashboards, reports, and other documentation help organizations monitor the fulfillment of risk mitigation tasks, and provide auditable evidence of good risk management practices. In safety-critical industries, risk reporting may be required as a condition for selling into specific markets.

Software risk management solution: Codebeamer

Ensure lifecycle-wide adherence to the highest risk management standards with Codebeamer, a requirements, risk, and test management solution that helps teams integrate risk management with day-to-day activities. Create a robust risk registry to identify, analyze, and mitigate hazards and risks. Comply with ISO 14971, IEC 60812, ISO 26262, IEC 61508, IEC 62304, IEC 60601, DO-178C, and other safety-critical regulations. Document and manage CAPA, FMEA, and other risk-related activities, and respond to regulatory audits with confidence. Benefit from closed-loop integration with the PTC engineering digital thread. Codebeamer helps build a culture of safety and quality throughout your organization. 

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Frequently asked questions

Why is risk management in software engineering important?

Adverse events can not only cause injury or death—they can also inflict grave reputational damage to brands and companies. Mature risk management practices reduce the probability of adverse events and help mitigate their impact when they do occur. Good risk management practices:

  • Improve customer satisfaction
  • Help protect customers from adverse events
  • Help protect companies from reputational damage
  • Required for participation in safety-critical industries

What are some common industry standards that reference risk management?

While not a complete list, the following standards and regulations utilize and/or reference common risk management practices:

  • Medical and pharmaceutical:
    • EU MDR and US FDA regulations and applicable standards: IEC 82304-1, IEC 62304, ISO 14971, ISO 13485, FDA 21 CFR Parts 11 & 820, GAMP 5, ISO 9001
  • Automotive and transportation:
    • ISO 26262, Automotive SPICE, CMMI, ISO 9001
  • Avionics and defense:
    • DO-178C, DO-254, AMC 20152A, ARP4754A