4 common risks in software development projects

Risks in software development

Sometimes, even the most elaborately planned projects can still run into trouble. No matter how much thought you’ve put into a project, there is still some amount of risk associated with it. And, it’s no different with software development projects. Team members may quit, resources may become unavailable, and sometimes, there’s just nothing you can do about it.

But, does that mean that you are completely helpless?

No, you’re not. By using risk planning and identifying what can go wrong, you can take preventive actions to ensure that the technical risks in software development are altogether avoided or at least minimized. In this blog post, we’ll explore the 4 common risks in software development projects and how you can eliminate them by implementing the right project management strategies.

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Why is risk management becoming increasingly important for IT projects?

There are several reasons why identifying the risks in software development projects has become the need of the hour. Some of them include:

To evaluate the entire project

Studies show that over 32% of all projects fail due to shortsightedness. Effectively identifying the risks in a software development project allows you to determine the strengths, weaknesses, threats, and opportunities of that project. Thus, by planning ahead, you can evaluate the best course of action to ensure that the project is a sure success rather than turning a blind eye to the big picture.

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Only 23% of organizations use standardized project management practices across the entire organization
Source: PMI Annual Survey, 2019.

To plan for success

Fundamentally, risk management involves making an exhaustive list of all the internal and external risks to the project. This involves identifying the risks, their probability of occurrence, their impact on the success of the project, and the proposed action. By devising the right strategies, you are well on your way to executing a successful project.

Other reasons why identifying the risks in software development projects is so important, include maximising results, meeting the deadlines, and to be proactive rather than reactive.

What are some common risks in software development projects?

1. Tight Schedules

Often, project managers face the pressure of having to deliver the project earlier than anticipated. This can happen due to many different reasons – lack of resources, poor planning, or even technical glitches. 

What can you do?

Sometimes, all you really need is more resources. Project managers call this strategy ‘crashing the schedule’ where more team members are tagged to the critical paths of the project. This reduces the time required significantly, but on the flip side, it can also create chaos if not handled properly. However, finding the right engineers can be quite a task. This is where some companies outsource their software development to external vendors for the duration of the project. Alternatively, going offshore and building your own development team and scaling it quickly, can also prove to be beneficial, especially in the long run. That being said, one must also be aware of the risks in offshore software development, especially when engaging with the wrong partner. 

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A PwC study of over 10,640 projects found that only 2.5% projects were completed successfully. The rest either failed to meet some of their original targets, missed the original budget or deadlines.
Source: Gallup

Another strategy that can be implemented when faced with a tight schedule is fast-tracking. For instance, two teams can parallelly work on requirement analysis and development at the same time. As long as both the teams practice good communication, this technique can help deliver projects at a faster pace.

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2. Budget Changes

Budget changes are a common occurrence, especially in software development projects. A common reason why this happens is ‘scope creep’. Scope creep is when you start off your project with a set of clear, well-defined requirements, but as you approach the finish line, so many requirements are added or deleted that all you’re left with is one big mess.

45% IT projects run over budget

Other times, your engineers may fail to understand the specific requirements of the project and add extra functionalities in an attempt to deliver an improvised version of the initial project. Even if the client didn’t ask for it, they are left with a better product but with a bigger price tag attached to it.

What can you do?

Double-check that your team is aware of the exact requirements of the project. Talk to them about the change control process and how they should only work on what is approved. If the list of requirements keeps climbing, it’s time to take a step back and analyse which changes will lead to a better outcome, and which ones won’t. The key is to stay as close to the original goals and objectives of the project, without compromising on output quality.

3. Technical Difficulties

Data security, information privacy, large-scale system implementation, software integration, and compliance are some areas where you are likely to run into unpredictable problems.

What can you do? 

In such scenarios, risk management plays a crucial role. Identifying the technical risks in software development projects, their impact, remediation, and monitoring becomes the highest priority. You can start by identifying and documenting the controls currently in place to manage the identified risks. The risks remaining after these controls, also known as residual risks, must be addressed while designing your strategies. These strategies are known as risk mitigation strategies.

Risk mitigation may involve one or more of the following – transferring the risk to an external party, financing it, avoiding it entirely, or accepting it. Developing the right strategies will help manage risks to an acceptable level. At the end of the day, the goal is to mitigate the risks to the point where the cost of mitigation outweighs the potential benefit.

Project fails because of poor management

4. Poor Management

This may be a no-brainer but is unfortunately overlooked in many projects. While many may blame budget overshoots and time constraints as the reasons why software projects fail, the underlying reason is always poor management.

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The right project manager will be able to efficiently plan devise strategies that ensure that the risks associated with the project are minimised. Further, by practicing effective communication with the teams, building a strong organisational framework, and implementing elaborate documentation processes, the percentage of projects that fail can be significantly reduced.

If you want to know how you can avert these risks in software development by building your ideal team of developers in India, feel free to reach out to us by filling out the contact form. One of our senior executives will get back to you within 24 hours.