Methodology for risk management in systems development Vrassidas LEOPOULOS Mechanical Engineer Dpt National Technical University of Athens Iroon Polytechniou 9 GREECE Konstantinos KIRYTOPOULOS Mechanical Engineer Dpt National Technical University of Athens Iroon Polytechniou 9 GREECE Abstract: - Aim of this paper is to provide a framework, able to identify and aid the assessment of risks on specific systems’ structures. A company (provider) develops the aforementioned systems for a client. Risk management is considered as a key tool for decision making in the early and most critical phase of this development, namely the bidding phase. The goal is a method for the use of Risk Management as an integrative decision factor during the determination of the most appropriate system among all the possible ones, for each specific bid. The paper is illustrated by a Case Study for the development and installation of a Production Planning and Control System, which presents the approach and the benefits stemmed from the method. Key-Words: - risk management, bidding process, systems solutions 1 Introduction A systems’ provider, when submitting a proposal for undertaking the implementation of a system, considers often alternative technical solutions. However, most of the times, only one solution has to be chosen as the best and final to incorporate in the offer to the possible customer. Bid managers have to capture the critical decision factor that will point out the system with the higher possibility to be accepted by the customer. On the other hand, this possibility should be balanced to the ability of the provider (contractor) to fulfil the terms and agreements of the contract if the project is finally assigned. Moreover, that procedure is limited by the short period of time that the bidding lasts. In this paper a method is proposed, that uses Risk Management as an integrative decision factor during the determination of the most appropriate system, for each specific bid. The study is based on an innovative methodology, which reduces significantly the time required to prepare and evaluate different system solutions. Furthermore, Risk Management is integrated in the methodology processes and aids the Bid Manager to distinguish between the high and low risk systems, in terms of bidding success probability and development feasibility. The rest of this paper is organised as follows: In Section 2 the problem of the study is formulated. The method proposed for the solution of the problem is described in Section 3. In Section 4 one can find the presentation of the case study that illustrates the method, and the results are analysed. Finally, in Section 5 the conclusions and opportunities for further research in the topic are presented. 2 Problem Formulation The description of the method follows three processes. The first one concerns the bidding process itself and how this is organised in practice. The second one concerns the sub-process of the development of potential technical (systems) solutions fulfilling the client’s specifications. And the last one is the Risk Management sub-process and the decision support. 2.1 Bidding Process In a provider – client relationship for systems’ development, the bidding process has been recognised as the most critical phase during the whole development’s life cycle [1]. The intrinsic uncertainty may either be used in favour of the provider as an opportunity or against him as a threat. The typical bidding process is composed of eight