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Risk management in IT project management

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Risk management in IT project management

Risk is an integral part of our everyday lives. We don’t think about it on a daily basis, especially when it comes to our private lives. However, large companies constantly assess and calculate all possible risks. They also try to avoid any negative occurrences. Still, there’s no way of eliminating all the risks. It will always be present and must always be taken under consideration. Especially as far as the big projects are concerned.

What is risk?

The term risk means simply a probability of undesirable occurrence, which can carry a negative outcome of some kind. Usually that outcome can be avoided or at least reduced to a minimum.

In risk management, a crucial element is recognizing all the risks. There are three main groups of such events:

  • External risk are the occurrences that are beyond the control of the company responsible for the project. It is usually related to the client and their decisions. Although external risk can also refer to economic or natural events, which can also contribute to the project not being implemented in time.
  • Internal risk refers to the process of programming itself. It usually results from some interaction issues inside the company and communication between employees.
  • Personal risk every team member can become the weakest link due to some health or family problems. 

In risk assessment we use the ratio of probability of some issue occurring to consequences it entails. If certain risks exceed the estimated level, the actions leading to minimizing them are advised.

For example, we can estimate a probability of power failure, which will result in all the company’s computers shutting down. All the files the team worked on, that are now lost are the losses the power outage brings. To minimize the risk, you can install auxiliary power source or work on notebooks. Another measure you can take is saving the progress frequently.

In practice, risk refers to events that are difficult to control, but the whole process looks exactly the same. The goal of risk management is maintaining its level below the estimated limit.

The risks most frequently encountered in IT

The example shown above was supposed to merely depict the way of estimating risk and its minimization. However what real events can pose a risk of the whole project failing? How to avoid them? Those are seven practical examples, which can be encountered in every software company.

The change in requirements and priorities

One of the greatest risk for the IT company at the start of a project, is a list of client’s requirements during the whole process. Changes implemented at the beginning of the project generate relatively low costs. On the other hand, decisions made in the final stages of the project can be quite costly. It comes from the possibility that most of the code can become completely useless, and sometimes the project gets abandoned altogether.

As a result, you have to introduce some additional team members to implement all the changes on time. To partially reduce cost those changes generate, most of the companies provide visualizations to show the client what the final product might look like. Determining the skills and possibilities at the very beginning of cooperation allows to reduce the cost of last minute changes.

Poor communication with a client

Lack of communication or long response time pose a huge risk for the timeliness of the whole project. Waiting for approval of changes or visualizations has a negative influence on the team and is wasting their time and energy for nothing. Motivation runs out due to idleness and long breaks.

It’s worth establishing more than one means of communication with a client, and in case of lack of response, the team leader has to make a decision either to start working on a project without approval or to focus on different tasks.

Lack of dedication among the team

For the project to succeed, full commitment of all the team members is required. Mutual understanding between all employees improves communication and the exchange of information and insight. If there’s no mutual support and understanding, some inconsistencies and mistakes might emerge, and correcting them may cause delays.

That’s why teamwork is very crucial. Long lasting cooperation contributes to better communication and helps sorting out the details. Proper motivation of employees through bonus system is also very important.

Poor communication

Misunderstandings can cause huge delays and lower efficiency of the whole process. Lack of communication between employees can cause duplicating of some parts of the code or incompatibility with the rest of the code.

Those problems can almost always be averted, if every team member has clearly established set of tasks and the communication between individual members is at the highest level. Team chemistry is also very important.

Incorrect documentation

Keeping correct documentation is crucial. Any errors in documentation pose a great risk of delays. What issues can arise as a consequence of negligence in that field?

  • Chaos in the company
  • Time wasted on questions and setting out the rules
  • No point of reference for the team
  • Lack of information regarding work progress

Although creating documentation is not considered a well-liked task, it is necessary for the team’s results and efficiency. Thanks to access to advanced tools such as Jira, Confluence or QA, keeping documentation from start to finish is much easier.

Absence of a team member

Although many risks can be predicted, personal problems of a team member, especially health issues, can often result in their absence. This kind of situations can cause disorganization and delays of the project’s implementation. In worst case scenario, when the key member of the team is missing, there’s no one that can replace them.

Failure to meet the deadline

Number of risks is very large, and most of them cause delays in the implementation of the project. It’s a very substantial risk, because failure to meet the deadline often means penalties or refusal to adopt the project by the client. That’s why it’s important to take some delay into account at the planning stage of the project. Spare few days “just in case” is a great safety measure, and if you manage to finish the project earlier, gives you the time for additional tests and corrections. It’s also very important to inform the client of any delays as soon as possible.

Is risk assessment a good idea?

Every project has its own risks. If they weren’t correctly identified, it can catch the team off guard and cause many negative consequences, including significant delays. That’s why it’s better to estimate the risk at the very beginning of the project, and include it in the plan. Additional time in case of delays, proper distribution of tasks, and providing the client with visualization of the software helps to avoid negative outcome of such events.

Listed below are the things that can help you correctly assess the risk:

  • Documentation. It allows to see the risks which occurred in the past and avoid them in future projects.
  • Detailed analysis. Analysis of possible risk, based on experience and knowledge helps to predict and estimate many risks, that can appear in the project.
  • Brainstorming. Conversation with every member of the team and discussing about potential risks together can bring surprising results.

If you make correct decisions and constantly assess the risk during the whole process of project implementation, you can prevent not only certain negative occurrences, but also their consequences.

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