Browse the main risks in software development. From scope creep, technical debt to miscommunications, understanding these pitfalls helps with timely mitigation.
There are always risks associated with any business venture. When you create software, the risks only increase. After all, technology is constantly changing, the possibility of bugs is omnipresent, and there can be countless changes and hiccups that threaten to completely disrupt your operations.
While there is no way to completely prevent obstacles or errors from occurring during the software development life cycle (SDLC), careful planning will allow you to know how to proceed when setbacks occur.
Main risks in software development
Understanding the technical dangers inherent in software development is vital to bringing a project to fruition. However, focusing only on technical risks provides an incomplete picture. Managerial and external risks are also integral components of the overall risk profile of software projects.
Clear communication, an organized allocation of resources and realistic deadlines are essential to mitigate management risks.
Meanwhile, monitoring market competition, legal/regulatory restrictions and economic changes is crucial to face external risks. Only by comprehensively addressing all risk categories – technical, managerial and external – can software teams substantially improve the chances of completing projects on time, within budget and with quality results. While technical risks are a critical piece, comprehensive risk management, encompassing all potential sources of risk, is critical to successful software development.
Technical Risks
Technical risks are directly related to the technologies, tools and techniques used in a project. They arise from the development process itself and can seriously impact results.
Inadequate technical skills: Inadequate technical skills of the team can be a major risk in software development. It includes lack of experience with the required technology, insufficient domain knowledge, and inability to resolve technical issues.
- Statistics : According to PMI ( Project Management Institute), 29% of project failures are due to a lack of competent team members.
- Mitigation : Regular training sessions and hiring experienced developers can help mitigate this risk.
Technological uncertainty: Technological uncertainty refers to the risks associated with the use of new or unproven technologies. It includes the risk that the chosen technology will become obsolete or not work as expected.
- Example : The FBI's Virtual Case File (VCF) project failed due to the use of outdated and incompatible technology, leading to a loss of $170 million.
- Mitigation : Conducting a thorough technological feasibility study before starting the project can help mitigate this risk.
Project Complexity: The complexity of a project increases with the number of requirements, the difficulty in implementing them and the interdependence between the different parts of the project. High complexity increases the likelihood of errors and omissions.
- Example : The Healthcare.gov website had a highly complex design with many interconnected parts, leading to its initial launch failure .
- Mitigation : Breaking the project into manageable parts and using modular design can help mitigate this risk.
Management Risks
Management risks refer to the risks associated with managing the project and team. These risks can affect the project schedule, budget, and quality.
Poor communication: Poor communication within the team and with stakeholders can lead to misunderstandings, wrong assumptions and, ultimately, project failure.
- Statistics : According to PMI, 56% of project failures are due to poor communication .
- Mitigation : Implementing effective communication strategies and using appropriate communication tools can help mitigate this risk.
Inadequate resource management: Inadequate resource management includes insufficient allocation of resources, overallocation of resources and not having the right resources at the right time.
- Example : The failure of Denver International Airport's baggage handling system was due to poor resource management, leading to a loss of $560 million.
- Mitigation : Proper resource planning and regular monitoring of resource usage can help mitigate this risk.
Unrealistic deadlines: Setting unrealistic deadlines can lead to inadequate testing, poor quality, and ultimately project failure.
- Statistics : According to PMI, 25% of project failures are due to unrealistic deadlines.
- Mitigation : Setting realistic deadlines based on proper project planning and estimating can help mitigate this risk.
External Risks
External risks refer to risks outside the control of the project team and the organization. These risks can affect the project schedule, budget, and quality.
Market Competition: Market competition includes the risk that a competitor will launch a similar product before your project is completed or that market needs may change.
- Example : Microsoft's Zune failed partially due to market competition from Apple's iPod.
- Mitigation : Conducting thorough market research and regularly monitoring market trends can help mitigate this risk.
Legal and Regulatory Risks : Custom legal software development can help mitigate legal and regulatory risks, which include the risk of changes in laws and regulations that may affect the project. It also includes the risk of legal action against the project or organization.
- Example : The failure of the Google Glass project was partially due to privacy concerns and legal issues.
- Mitigation : Understanding project legal and regulatory requirements and regularly monitoring changes to laws and regulations can help mitigate this risk.
Economic Fluctuations: Economic fluctuations include the risk of changes in the economic environment that may affect the project. Includes changes in exchange rates, inflation and interest rates.
- Example : The failure of the Euro Disney project was partly due to the economic recession in Europe.
- Mitigation : Regularly monitoring economic trends and having a contingency plan for economic fluctuations can help mitigate this risk.
How to mitigate risks in software development projects
Once you have formulated a plan to mitigate software development risks, it is essential to implement that plan and continually monitor its effectiveness. The engineering manager must collaborate with the software development team and quality assurance teams to implement the strategies defined in the plan.
Regular meetings and updates should be scheduled to ensure all team members are aligned with the plan's objectives and aware of their responsibilities. Furthermore, remaining adaptable is crucial, as new risks may materialize during development, necessitating adjustments to the initial plan.
Frequently reviewing and updating the risk management strategy ensures that the team is always prepared and proactive in facing any challenges. Ultimately, a well-implemented risk mitigation plan will not only help in preventing project failures but also facilitate the successful and timely completion of the software development project.
#1 Determine the Most Likely Software Development Risks
Before you start addressing and preventing software risks, you need to identify what they are. What could hinder the development of the project? All software projects have risks, but they can still vary depending on the nature and type of product you want to create and the people and processes involved in it. Identify what these might be up front and then routinely assess whether new risks have presented themselves during development.
#2 Categorize and prioritize
Once you've identified the risks associated with your project, it's time to categorize them and determine which ones are the most urgent. The ones that pose the biggest threats are the ones you should try to tackle first.
Categorize these risks on your list based on the type of concern they present and when you need to address them. You must also identify how much effort they will require in terms of resources and personnel, as well as how difficult they will be to resolve. This doesn't necessarily mean that the most complex threats are the highest priority — it's just a way to classify your risks to make planning easier.
#3 Create a plan
In addition to identifying the risks, you'll need to have a clear plan to actually mitigate them. The engineering manager will likely lead this effort, but will need input from the software development and QA teams on what is feasible and what types of efforts can be undertaken to reduce or resolve the issues.
This is the most effective way to prevent problems from escalating and wreaking havoc on the development of your project. Instead of dealing with problems as they arise, you think long term and recognize what you need to do in advance.
#4 Make Sure Your Employees Are Properly Trained
With tools and technology constantly evolving, every member of your team needs to be at the top of their game. Reducing risk means ensuring that everyone has adequate training on how to use these technologies. They also need to be kept up to date on the processes and policies in place.
#5: Account for Requirement Changes
Requirements may change during the project and you need to be prepared for these changes if they occur. This, of course, is another risk. Have a process in place for working through changing requirements from customers, engineering managers, leaders, and other stakeholders so they don't disrupt project development.
#6: Search Compliance
You will need to comply with the laws of any area or territory in which you operate or release software. If your product is wide-reaching and refers to global markets, it could mean that you are facing many different laws and legalities. But this is a risk you cannot leave to chance. You will need to thoroughly research the compliance laws that govern any region where individuals will be using your technology.
It's a good idea to have a dedicated legal or compliance professional investigate these matters and ensure you are complying with restrictions.
#7 Continuously Monitor
Even with a clear and thorough plan in place, you cannot stray from the risk mitigation process. You will need to continue monitoring risks and problems as they occur. There should be regular check-ins, reports, feedback, analysis of how various concerns were addressed, project tracking tools, and more.
#8 Communicate
Communication is an essential part of any software development project – it plays an important role in reducing risks and keeping them under control. Ensure that there are established means of communication between interested parties, including the development team, quality assurance professionals, the client and other people involved or with an interest in the development of the project.
Your company must keep the customer informed about all efforts, while the customer, in turn, must provide timely feedback. Team members should also communicate with each other, raising any concerns, obstacles, and successes as they occur. There should be a system for tracking risks and their status, such as through a registry or portal, highlighting concerns and whether they have been resolved.
#9 Implement a rigorous quality assurance process
Quality control testing is one of the key ways to truly mitigate risk. This complete process involves professionals analyzing your product's features, such as usability, performance, security, load limits and more. Leveraging the skills of QA professionals will help protect your company from the threat of releasing a product that is not up to par and full of vulnerabilities, as well as protecting the end user.
While it's impossible to completely eliminate all risks from building software – after all, every software development project is risky to some extent – you can protect yourself by establishing a clear plan. This way, you can reduce the chances of these threats getting the better of your product and business and increase your chances of success.
