A Financial Tool for Software Risk Measurement

Risk measurement of the software projects is presented based on analogies with financial risk measure models. Financial risk measure models assign a monetary value to a risk event to gauge the financial impact of the risk event on the financial investment. Estimated software cost is modeled as a financial investment and financial risk measure models are adopted to measure the monetary loss due to a risk event associated with the estimate cost of a software project. Further risk measure models are utilized for resource contingency planning needed to combat the worst case risk events.