Saturday, June 16, 2012

Key risk areas that can impact the project success

Till recently and to some extent, even now, some of us don’t want our insurance advisor talk about our own risk of life. It has been the belief for some not to think or talk about the risk of losing life. However, things are changing and most of us today are managing personal risks well by atleast transferring the risk to the insurer for financial protection. Risk management is not just financial protection and there is more to it, even though finance makes the core part in most cases. The same way, if we look at managing software projects, the project manager and sponsors had to deal with so many issues every now and then, before it was felt that preventing such issues coming along the way is better than dealing with such issues, which is what is risk management.

The risk managers or risk experts always think of a what if scenario for every action / decision so that all possible risks are identified early on and this in the past was thought to be creating ‘negative vibes’ and did not receive much support from the project sponsors. Because, when much of the risks are identified upfront, it might be so that the project may have to be shelved at the start itself. Here again, things have changed and most CxOs are accepting ‘failing fast’ a better option than failing at the end. Failing at start is an even better option. Refer my own blog on ‘failing at start’.

Given that most of the project sponsors and project managers have realized that risk management is better than its only alternative crisis management and are believing that risk management is a key area of project management, let us explore the key risk areas in a broader context that need a close watch which if not could impact the success of an end to end software project.

User Expectations

Even though a well written functional specifications exist, and the development team developing to that requirement, there is a potential risk of end users when they look at the final product go back and say that “this is not working in a way we want’, and pushing back the product for rework. This is mainly due to the fact that everything around the business is changing with time. The more time the development team take in involving the end users, the chances are very much likely that the expectation would have changed. Agile is the solution to address this risk area, where by the end users are participating in the development and small chunks of the product are delivered every now and then for user feedback.

There are more to it, most projects do not have the non functional requirements documented and much of the user expectations go around such software capabilities, for instance application performance is a key non functional requirement, which the development team is expected to take care of as part of. While the solution for this lies with the solution architect, the project manager and the stakeholders should not lose sight of this important area and should be managing the user expectations all through the project execution.

If one can identify or spot the potential risks around the user expectation and manage it well, the chances of the project successfully reaching the milestone is very high.

Technology Shocks

This is a broader risk area and could be broken down into many sub areas. Many projects hit a road block when it get closer to production deployment, by when the infrastructure team may find heavy investment in terms of hardware and software tools required to support the product in production. Some projects even faces issues in the early stages as well, as the development team may find some tools or technology not suitable for the given solution.

A well done pre-project risk assessment can help address this risk as the architects involves in such assessments can anticipate and call out such road blocks, which might help the project sponsors to take a call. Development teams in most cases would want to jump on to the project and start building everything themselves without considering re-usable off the shelf components being available for most capabilities. This tendency can add to the schedule risk, as the project may take longer due to technical issues that the team may face.

Managing risks in this area early on is very important as certain choices might be very difficult to reverse in the middle of the project. It could also be a case where implementing certain requirements with a given technology platform or tools could be much more complex than with certain other tools. Much of this responsibility lies with the Architects, who should do a good job to take the project pass through this risk area.

Skill gaps

While this item is to some extent related to technology shock, there is more to skill than the technology itself and that made me to call this out as a separate risk area itself. Soft skills play a key role in taking the project on the success path. Staff attrition is inevitable in software projects and as such managing the dependency on people is very important. The resources holding key roles should have the right attitude of hand holding the teams, willing to share the knowledge, quick and effective in on-boarding new members to the team.

Such skills of key resources holding the lead role even influence staff leaving the team or even the organization and it could be some of the best resources of the project team exiting for such reasons. The Project Sponsors should play an important role here in getting to know of such risk items and manage them well so as to keep the morale of the team high and get the best of the team.

Every member of the project should contribute towards the success of the project, keeping in mind the project goals and objectives. It is not uncommon that some key members of the project make certain decisions in such a way that is beneficial to him or them and in turn putting the success of the project at risk. This is a sort of political behaviour by some members within the project. Here again, the sponsors should involve more into the project and look for such risks spotted early on, so that control measures can be put in place by changing the team composition or by imparting necessary training or counselling to the needy members.

This third risk, when identified and managed well will ensure the team members collaborate and communicate well and deliver their best which eventually will contribute towards project success.

Lack of Risk awareness

Finally, lack of risk awareness by the project stakeholders is the biggest risk. This calls for a proper risk strategy and objectives at the organization level and at every project level and letting every member of the project to actively participate in risk identification and management.

While most project managers do mandate risk management as part of the project charter and do maintain a risk register, they fail to apply the risk management principles consistently, which eventually lead to incorrect risk prioritization. Not to be stressed, the controls and tasks identified to reduce the risk level also need to be monitored on par with other project tasks for timely actions. It is also a common mistake that the project managers do by missing out to estimate the efforts for risk management and not making it part of the project schedule.

Another important aspect of risk management, which is normally ignored is the communication and continuous monitoring. Risks need continuous monitoring and need different levels of communication or escalation depending on the risk level. Most projects have a stale risk register, where the risks are just identified and no monitoring or follow ups being done on them. Use of an appropriate risk management tool is recommended as it will ensure the visibility of the risks to all concerned with automatic alerts and escalations and also will facilitate consolidation of risks across multiple projects, there by facilitating managing risks at enterprise level.


  1. You have covered the people, process and technology aspects under different headings and that is true and interesting! Managing user expectation, which includes requirements gathering, analysis & sign-off and the scope creep is continuing to be the biggest risk area, most project managers struggle to manage. Thanks for writing this up!

  2. Hi,

    You are right and as people, process and technology being the key elements for project success, I have tried to call out some of the key risks in those areas which, when managed well would lead to project success.

    Thanks for writing down your comments.


  3. Just came across an interesting blog post titled as 'Why do Products fail?'. Though the discussion is about product failure, I felt that the same can apply to projects as well. The author summarizes that picking wrong goals along with incorrect prioritization, could lead to product failure, which is what I have identified in my blog as User Expectations.

    Have a nice read,