How to Identify and Monitor Risks During Project Implementation

Software development is always risky since a lot of market segments are saturated with ready-made solutions. The creation of customized software for a specific business also requires a lot of analysis and research before proceeding to technical implementation.

Assessing risks is one of the essential tasks in the pre-production stage. What’s more, risk management in software development doesn’t end after the digital product launch, so we are going to share the experience of our Senior Project Manager Dmytro Liesov and explain how to deal with different kinds of risks in the application development process.

What are the Risks in Software Development?

The risks in software development like any other type of business activity are the events that may or may not happen, and if they do they will affect the project development process, time, costs, specifics, and final results.

Why do we need risk management in software development? Reasonable risk assumptions (or risk management planning), their sound assessment, and the development of a response strategy allow the project to stay organized and flexible, and have a better chance of being released even if some of the risky events take place.

How Will the Risks Affect Your Project?

There are three ways risks in software projects affect their outcome.

• Positive risks or opportunities. When talking about risks, one always thinks of negative events. However, there are also positive risks or opportunities like new ways to develop and grow the project. These events allow the project to reduce costs, increase value, become more competitive, and accelerate the time it takes to bring the product to market.
• Negative risks. In contrast, negative risks are events that have the potential to reduce the value of a project and increase its costs. Critical risks are part of negative risks and can be defined as events that jeopardize the overall success of the project, for example, if the use of applications for a certain industry was suddenly prohibited by law like some messenger apps that are now allowed in the United Arab Emirates.
• No risks. These are the standard events that are part of the development process and have no critical importance on the future project. They may be defined as those risks where we know that the specific event will occur or will not occur (i.e when there is no uncertainty of the risk occurring.)

What are the Three Milestones of Risk Management?

Risk management in software development projects is based on the three following milestones, each of which is aimed at helping you with reasonable software development risk assessment and software development risk management plan creation.

#1 Find the Origins of the Risks

At the first stage of software development risk analysis, you should find out what you are going to deal with, or to put it simply, it is necessary to identify the type and origin of the risk to come up with a specific response strategy.

Software development project risks are divided into four categories.

• Technological. These are the risks related to the technical implementation of the project. For example, bad legacy code, technological debt, or the wrong choice of technologies are examples of this type of risk.
• Operating. These are the organizational risks, for example, the risk of downtime because of long searches for specific specialists needed for the project creation. This can be classified as an operational risk.
• Business. As for business risks, these are all kinds of positive and negative events that directly affect business growth and solvency. For example, if the company goes bankrupt because of debt.
• External. External risks cover all the predictable and totally unexpected situations that may positively or negatively affect the business itself, and consequently the project it is working on. For example, the recent pandemic became one of the unprecedented and unpredictable negative external risks for the majority of businesses.

#2 Use a Risk Breakdown Structure (RBS)

After the risks and their origins are identified, it makes sense to gather them into a holistic picture and get an all-encompassing impression of the environment in which the project will be created. A project risk management tool such as the Risk Breakdown Structure will be useful for this task.

Here is what it may look like.