Evaluating software project portfolio risks

Like any other business, software development organizations try to maximize their profits and minimize their risks. Such risks represent the uncertain events and conditions that may prevent enterprises from reaching their goals. This possibility has turned risk management into a major concern, not only for project managers but also for executive officers involved with strategic objectives. In this sense, economical concepts can greatly support Software Engineers in the effort to better quantify the uncertainties of either a single project or even a project portfolio. In this paper, we present a technique to evaluate a software project risk level by means of analogies with economical concepts. Such technique allows a manager to estimate the probability distribution of earnings and losses incurred by an organization according to its software project portfolio. This approach has been calibrated by data collected in an empirical study planned and executed to provide information about the relative importance of risk factors in software projects. A usage example of such approach is presented. Finally, we introduce a CASE tool specially built to support the application of the proposed techniques.