
Software development projects are inherently complex and incorporate a degree of uncertainty. Even the most meticulous of plans will encounter issues. Effective risk management processes are necessary to protect the success of every project. Failure to properly manage risk in software projects can compromise the final product, which has significant ramifications on the wider organisation. This is especially true when the project is central to operations.
Fortunately, there have also been many learnings obtained in past failures and the development of risk management methodology has adapted more generally. This article discusses seven crucial steps to help you risk-proof your projects and emphasises the importance of pre-emptive planning.
Achieving buy-in from stakeholders in the early stages of your software development project can have the most significant impact on its success or failure. Key stakeholders in any project will include the following:
A key focus for the project team should be to agree on key objectives and outcomes with stakeholders and ensure that everyone is on the same page in terms of what will be delivered. It also provides an opportunity for the delivery team to understand factors that are external to the project, such as broader operational or organisation activities, needs and expectations.
While risk management processes are becoming commonplace in most modern software development projects, there is often difficulty in achieving buy-in from all involved parties, particularly when there is pressure to “just get on with it”. But risk management processes do not necessarily have to be onerous and are often undertaken as a more commonsense approach, regardless of any formal requirement to be followed.
A key component of risk management for software development projects is the identification of both technical risks and broader business risks, ensuring that all risks that could be reasonably anticipated are identified.
Preparation of a risk register is recommended to document identification of risks, rating the likelihood of the risk occurring and the impact that the risk will have on the project if it does occur. They are also vital for pre-emptive planning of risk mitigation strategies that include avoiding, controlling, transferring, monitoring or accepting the risk.
An initial risk register should be created prior to commencement of the project and reassessed as progress is made when a better understanding of past and future risks are identified.
Breaking down a large software development project into manageable chunks is beneficial for many reasons, including:
Forming a working relationship with the holder of the purse strings is an important step when there are significant financial implications tied to the successful execution of the project. This is particularly important for project teams who possess significant technical knowledge but have limited experience in budgeting or cost management.
Finance teams should have a good understanding from their involvement in other projects of the types of costs that might be encountered. Assistance should be sought to create a sufficiently detailed budget that considers all cost implications including technical materials and equipment, resource costs, and any business overheads.
In the event of cost overruns, finance teams will also have previous knowledge of the likely areas where this may occur so they can make provisions where required. They can assist in securing additional funding if required, despite best efforts to identify correct allocations in the initial budgeting process. A study conducted by McKinsey & Company, in conjunction with the University of Oxford in 2012, found that half of all large IT projects “massively blow their budgets”, with software projects specifically identified as having the “highest risk of cost and schedule overruns”.
Communication of the progress of a project is crucial to keeping stakeholders informed and engaged. This is best achieved through regular reporting in a succinct dashboard (or similar) containing key metrics and relevant information such as key activities, progress to plan, issues encountered, and key risks or new risks identified.
Regular reporting is also useful to support:
It may be difficult to maintain momentum and keep staff engaged and motivated throughout the life of the project, particularly in long term projects and high stress environments. This is crucial in software development as the project is heavily reliant on the technical expertise of its team, and the project specific knowledge that increases and becomes more difficult to replace as the project progresses. As staff near the end of a long project it’s likely that they will look to consider their next opportunity before the project is completed, which may have an impact on the resourcing and expertise needed at crucial testing and implementation phases.
To effectively manage staff throughout the life of the project, consider aligning personal goals to those of the project, and incentivise behaviours required for success, such as final completion of the work, meeting deadlines agreed in planning, and meeting budget requirements.
While the project is ongoing it’s important to implement a formal quality check or audit process to provide an independent view of the progress and likelihood of success. This can be hugely beneficial when core project team members are deeply involved in specific areas, making it difficult to see the project from an objective and project-wide viewpoint.
Similarly, at the end of the project it’s important to reflect on the outcomes and learnings of the work undertaken, so that future projects benefit from understanding what worked well and what could have been done better.
Following these seven steps will help you risk-proof your software development projects and execute effective risk management strategies. Quality pre-emptive planning will save time and money and help deliver project goals on time and on budget.
Are you undertaking a small or large-scale IT project? If you’re looking to optimise your project outcomes while minimising the associated financial risks, speak to the team at Testpoint today and discover the best way to achieve success.
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