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7 Main Types of Software Development Risks

Sep 22, 2020

Discover what software development risks can affect the IT project and how to mitigate them.

The long-standing phrase that no one is immune to risk is no longer relevant. Only a business with poor or no risk management is not insured against risk. Each area, industry, and sphere have its own pitfalls and bottlenecks that must be taken into account and IT is no exception. Here are a few software development risks to consider.

Common Software Development Risks

Of course, there is no single software development risks list that fully reflects all possible situations that arise during a development project. Moreover, the lists of each of the parties – the customer and the contractor – will differ. Here are the most widespread categories of risk in software engineering from the client’s point of view.

1. Bad Timing

Speed ​​matters. In a highly competitive environment, one day can mean big profits or big setbacks. Scheduling problems can arise for a variety of reasons, for example:

· the time for the project was initially incorrectly calculated and set;
· the project manager does not properly track employees, skills, task status;
· the functional features of the final product were not determined in a timely manner;
· unexpected and urgent expansion of the project scope;
· lack of resources, etc.

Tips to avoid this software development risk: apply agile methodologies, ensure the maximum involvement of all team members in planning and estimating, receive feedback at all stages, starting from the earliest ones, involve the Owner or Stakeholders. Another solution may be an emergency expansion of the team to increase the speed of development, however, this can significantly affect the project budget.

2. Incorrect Budget Estimation

Intended use of budgetary funds of the IT project is also often referred to the category of main risks. With the wrong or untimely budget management, the project can be completed in the middle or go far beyond the agreed cost. The main causes of cost risks in software development include:

· the budget was initially calculated incorrectly;
· no funds have been reserved;
· unplanned project expansion.

Tips on how to mitigate or avoid this risk are fairly simple. It is necessary to maintain constant control of the budget and development process. When introducing additional functions – or the need for any changes – calculate their cost at the discussion stage.

Man calculates the budget

3. Poor Code Quality and Technical Risks

Technical risks in software development are often a pitfall, something that is not immediately noticeable but with serious negative consequences. In an effort to get an innovative product, companies often require the use of cutting-edge technologies, which themselves can have a number of significant disadvantages. However, this is not the only reason that increases the risks:

· lack of professionalism and knowledge of team members;
· constant changes in software requirements;
· the technology used does not have a sufficient level of development and community support (it cannot provide the necessary functionality);
· too complex multi-part project;
· the implementation of project modules (in, for example, an existing platform or application) turned out to be more difficult than expected.

In this case, only flexible risk management can help. However, as practice shows, in case of serious obstacles, it will not be possible to completely avoid risks – only to mitigate them.

4. Poor Productivity

Drop-in productivity is also among software development risks. This usually occurs when working on projects with a long timeline. Engineers motivated at the very beginning by the end of the project can hardly cope with the tasks. The downside of a long project can be a waste of time in the early stages when the illusion persists that the deadline is not too soon. The reasons for poor productivity include:

· poor project management;
· incorrectly chosen methodology;
· incorrectly matched team members.

Tips to this type of risk are hidden in their reasons: using agile methodologies allows to maintain the productivity and motivation of all team members throughout the project since the processes are divided into shorter periods of time. In addition, it is an opportunity for the project manager to mentor and coach the team, which also helps to increase and maintain a high level of developer involvement. The Product Owner will also be more informed about the state of tasks and will be able to observe the project.

5. Poor Management

As statistics show, 32% of projects fail due to poor project management. This concept usually includes:

· poor communication and interaction within the team;
· insufficient qualification level of PM;
· lack of leadership and analytical skills;
· poor risk management in software development.

One of the consequences of poor project management can be the turnover of employees: key project developers leave the team, without passing on crucial information on the project to anyone, this entails delays in development, failure to meet deadlines, and budget.

Therefore, high standards are always set for the project manager. He must combine the traits and skills of a strategist and tactician, be deeply involved in the project, effectively communicate with the team, build a strong organizational framework, and implement elaborate documentation processes.

6. User Engagement

Perhaps this software development risk would be worth putting at the top of the list since its impact is quite large on the final product. User engagement allows you to understand how successful and profitable the product will be. Many leading software development service companies take it into account at the consulting stage, enabling them to avoid project failure. And yet, in what cases such a risk may appear:

· insufficiently deeply conducted research to identify the target audience of the project and its needs;
· incorrectly selected solution for the key needs of the target audience;
· poorly thought out, outdated, or not engaging product UX/UI design.

The answer to this risk will be a deep analysis of the needs of the finished product’s target audience, which is carried out by professional business analysts. This also allows taking into account certain features when developing the appearance and usability of the product.

7. Unpredictable External Risks

Unpredictability is another enemy that can be encountered while running a digital project. External risks in software development are not so rare as to exclude them from the general list, because it is impossible to be immune to:

· sudden market changes;
· the fast growth of a competitor (with more resources available);
· implementation of new government regulations;
· changes in consumer behavior and priorities.

This is where a business analyst is needed again. His tasks include research the market, country of operation, and worldwide tendencies to analyze the current situation. The goal is to discern the patterns on the market and make sure that they are favorable for the product and business model. The latest technologies such as Machine Learning and Big Data Analytics are empowering a business analyst to make better decisions.

So, here is the answer to the “what are risks in software development” question, if consider risks from the customer’s point of view. It should be noted that the list of software development risks and mitigation methods is not comprehensive and may be supplemented depending on the complexity of the project, industry, and external circumstances. However, a high level of competence and a well thought out risk management strategy significantly reduces the impact of risks on the project.

To find out more about how Computools avoids or mitigates software project risks, get an estimation of your project or consultation, feel free to contact the company’s experts via email info@computools.com or using the form below.

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