There are always dangers involved in software development. Additionally, not every danger is the same. The success of the project is more seriously threatened by some risks in software development than by others. You might be surprised to learn that in 2021, the global cost of handling integrated risk management in the IT sector was estimated to be $5473 million.

Additionally, Statista estimates that 54% of the world faces cybersecurity threats, with nations like Brazil and India experiencing rates of cybercrime of 76% and 69%, respectively. Software development risks are now a top issue for established SMEs, entrepreneurs, businesses, etc. due to an increase in internet dangers.

Software development is a collection of procedures used to conceptualize and produce software. Software development risks are elements that may have an impact on a project’s success. Both internal and external factors might provide hazards to the software development process. To ensure the success of a project, it is critical to plan for and reduce the risks associated with software development.

Risk is defined as unpredictable events connected to future events that have a chance of happening but may or may not, and if they do, cause loss to the project. The task of risk identification and management is crucial for software project development since it determines whether a project will succeed or fail.

Software development projects are complex undertakings often involving a big team and a huge budget.

However, the relentless pursuit of software development opportunities without adequately mitigating the risks involved can fail. Some project managers see risk management in software development and its attendant tasks as extra work and expense that doesn’t advance the core product development process.

This mindset is wrong and can prove to be costly if the project were to fail.

Adequate risk management in software development will:

• Save money by cutting expenses associated with responding to unmitigated emergencies
• Allow the development team to work faster by focusing on the core project, knowing that all risks are covered
• Allows for a more accurate project estimate cost, without the risk of overrun costs due to unidentified risks
• Builds the reputation of the company/agency by ensuring that software development projects go as planned

Simply put, we cannot overstate the importance of risk management in software development.

Read Also: How to Make Money Coding as a Beginner

Here are some of the major risks associated with software development and steps you may take to reduce them:

1. Schedule Risk :
   Schedule related risks refer to time related risks or project delivery related planning risks. The wrong schedule affects the project development and delivery. These risks mainly indicate to running behind time as a result project development doesn’t progress timely and it directly impacts to delivery of the project. Finally, if schedule risks are not managed properly it gives rise to project failure and at last it affects to organization/company economy very badly. Some reasons for Schedule risks –
   • Time is not estimated perfectly
   • Improper resource allocation
   • Tracking of resources like system, skill, staff etc
   • Frequent project scope expansion
   • Failure in function identification and its’ completion
2. Budget Risk :
   Budget related risks refer to the monetary risks mainly it occurs due to budget overruns. Always the financial aspect of the project should be managed as per decided but if the financial aspect of the project is mismanaged then budget concerns will arise by giving rise to budget risks. So proper finance distribution and management are required for the success of the project otherwise it may lead to project failure. Some reasons for Budget risks –
   • Wrong/Improper budget estimation
   • Unexpected Project Scope Expansion
   • Mismanagement in budget handling
   • Cost overruns
   • Improper tracking of Budget
3. Operational Risks :
   Operational risk refers to procedural risks means which are the risks that happen in day-to-day operational activities during project development due to improper process implementation or some external operational risks. Some reasons for Operational risks –
   • Insufficient resources
   • The conflict between tasks and employees
   • Improper management of tasks
   • No proper planning for the project
   • Less number of skilled people
   • Lack of communication and cooperation
   • Lack of clarity in roles and responsibilities
   • Insufficient training
4. Technical Risks :
   Technical risks refers to the functional risk or performance risk which means this technical risk mainly associated with functionality of product or performance part of the software product. Some reasons for Technical risks –
   • Frequent changes in requirement
   • Less use of future technologies
   • Less number of skilled employee
   • High complexity in implementation
   • Improper integration of modules
5. Programmatic Risks :
   Programmatic risks refers to the external risk or other unavoidable risks. These are the external risks that are unavoidable in nature. These risks come from outside and it is out of the control of programs. Some reasons for Programmatic risks –
   • Rapid development of market
   • Running out of fund / Limited fund for project development
   • Changes in Government rules/policy
   • Loss of contracts due to any reason

Below are some other risks you need to pay attention to:

1. Code issues

One significant risk involved with software development is poor quality code. Projects may contain poor quality code because of rushed work and many other factors. Issues with code may include bugs, logical errors and more. You can mitigate risks related to code quality by:

• Testing code frequently
• Resolving bugs and logical errors when they’re found
• Creating coding standards for software developers
• Using coding best practices

2. Aggressive deadlines

Sometimes, software development projects have tight deadlines. In some cases, software development teams may be unable to meet these deadlines. You can mitigate this risk by creating a thorough project plan that allows you to set realistic deadlines.

3. Unmet expectations

Another risk involved with software development is inaccurate estimations that lead to unmet expectations. Often, software development projects require estimations, and estimations can sometimes be inaccurate. Inaccurate estimations of costs, deadlines and outcomes can cause software development projects to not meet the expectations of customers. You can mitigate this risk by clarifying the likelihood of your estimations, including how optimistic they are. This can help stakeholders form realistic expectations of your project.

4. Low productivity

Productivity issues can also be risks in software development. Sometimes, software development teams may struggle with productivity, which can happen because of delays, employee burnout and many other factors. You can increase your team’s productivity by:

• Creating a well-paced project plan to lower stress and avoid burnout
• Communicating effectively about project details and problems
• Find a great leader who can motivate and manage the team

Another action that can help boost productivity is setting good goals. Strong goals can help your employees stay motivated and on track. You can use the SMART technique to set goals that are:

• Specific
• Measurable
• Attainable
• Realistic
• Timely

5. Budget issues

Another software development risk is budget issues. Software development budgets can change as project scopes change, but it’s important to monitor projects so that they don’t go over budget. Be sure to adjust your project plan and budget whenever changes are made to avoid raising project costs.

6. Poor risk management

Poor risk management can be a risk itself. Good risk management is essential for software development teams to spot risks and effectively respond to them. You can improve your risk management by:

• Identifying potential risks
• Calculating the likelihood of each risk
• Creating risk mitigation plans
• Carefully monitoring risks

7. Inadequate project management

Similarly to risk management, another risk in software development is inadequate project management. Good project management is important to the success of a project, as it can result in clear goals, expectations, timeframes and deadlines. You can improve your project management by:

• Hiring a project manager
• Developing a project plan
• Utilizing project management software
• Creating clear communication lines throughout your organization

8. Scope creep

Changing project scopes can also cause risks in software development. Scope creep refers to a project’s scope morphing into something completely different than it was initially. Scope creep can cause risks when it causes software developments to miss project deadlines and extend project timeframes. You can monitor scope creep by separating your project into manageable segments or iterations and frequently reviewing the scope.

9. Stakeholder issues

Another software development risk is stakeholder issues like low engagement and inaccurate expectations. It’s important to communicate with stakeholders effectively so that they understand software development projects and engage with your software development team. Stakeholders can have large effects on the success of projects, so forming great stakeholder relationships is essential. You can improve your stakeholder engagement by:

• Communicating with stakeholders frequently
• Creating solid project plans for stakeholders to know what to expect from projects
• Setting clear project goals

10. How users respond

The user response to a project is another software development risk. The success of a project directly depends on how many users purchase and adopt the software, so user response is extremely important. You can mitigate this risk by:

• Testing software in advance through beta testing and user testing
• Sending surveys to users
• Conducting focus groups to gather information about users

11. Project team members leaving

Employee turnover, including key team members leaving projects, is another significant risk in software development. When team members leave software development projects, it can be hard to replace their skills, expertise and project background. You can mitigate this risk by:

• Documenting the details of your project
• Creating a training program for new team members
• Asking employees who are leaving to prepare transition plans

12. External risks

There are also external risks worth considering. External risks can include unpredictable factors like changes in laws, economic shifts and natural disasters. It can be challenging to avoid external risks, but there are actions you can take to mitigate them. Obtaining insurance can help you prepare for certain risks, and staying informed on software development laws and current events can allow you to respond quickly to external risks as they arise.

What are the Technical Risks of Software Project?

Low quality code

The most common software development risks can’t be mentioned without the poor quality of the code. This is also a headache for clients as for the most part, they don’t understand the code and hence fail to assess it. The causes of this risk vary, including but not limited to:

• Lack of professionalism and low expertise of development team members
• Continual changes in product requirements
• The technology used lacks a sufficient level of development and community support (so it cannot provide the functionality needed)
• Too sophisticated multi-part project
• The implementation of project modules (on an existing platform or application, for instance) turned out to be harder than expected.

One outcome is, at the final stage of the project, the product doesn’t work because the developers wrote low-quality code with a lot of bugs, and no testing.

Solutions:

• User Acceptance Criteria need to be implemented.
• Clients can hire a project manager or CTO to evaluate the code quality and supervise the developing process.
• Sticking to the Clear Coding Standards and Guidelines of the company.
• Have the product tested carefully.
• When choosing a developing team or a company to work with, clients should look at some of their previous projects, have a technical interview, or check out their Clear Coding Standards.

Not using reliable tools

One of the most alarming software development risks is choosing improper tools to aid in your process of software development. If the right tools are put into use, they’ll help you efficiently keep tabs on your process and provide reports with accurate data.

Solutions:

Opt for cloud computing tools, for example, JIRA, to improve communication between team members and stakeholders. These tools also help you to track time, testing cycles, the working progress, and other data of your project.

Bad timing

No matter what your project is, speed matters. In a highly competitive market, one day can either be big profits or big setbacks. Failure at timing and scheduling can arise from:

• The total project was incorrectly calculated and set in the first place
• The project manager fails to properly track employees and task status
• The functions of the final product were not decided timely
• Unexpected and emergency expansion of the project scope
• Inadequate resources

Solutions:

• To avoid poor timing and thereby lost opportunity cost, you should:
• Apply agile methodologies
• Make sure that all team members are involved in planning and estimating
• Take in feedback at all stages, starting from the first ones
• Have the Owner or Stakeholders involved
• Carry out an urgent expansion of the team size to speed up the development, however, this can dramatically affect the project budget.