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It is widely recognized that enterprise software is integral to the success of any business. It is, therefore, important to ensure that your enterprise software is fit for purpose and operating at maximum efficiency to see the best return on investment. This means that, at some point, you are likely to need to undertake software development.
However, software development is a challenging and complex process that comes with a variety of risks, such as poor project management, scope creep, and budget overruns. To prevent these types of problems from occurring, it is essential to have a robust risk mitigation plan in place. However, there are many factors to consider when creating your management plan.
In this article, we will explore the most common software development risks and relevant mitigation strategies, equipping you to tackle your software development project with confidence.
Keep reading to learn more as we explore this subject in more detail.
What Is Software Risk Management?
Software risk management is the practice of identifying, analyzing, and responding to potential risks in the software development process. It allows you to anticipate and prepare for issues before they arise, minimizing impact. To better understand software risk management, let’s break it down:
- Identifying Risks: Software development risk management involves taking the time to review your software project and determining areas of concern.
- Analyzing Risks: Once you’ve identified those areas of concern, you then analyze the risks to identify how likely they are and what might cause them to occur.
- Responding Risks: After analyzing your software project’s potential risks, you’re then in a good position to effectively respond with risk mitigation strategies.
Software development risk management also includes preparing for unexpected issues which may arise. With 41% of businesses reporting that they encountered three or more critical risks in the last 12 months, effective risk management is essential to ensure the smooth running of your business. Software risk management is now even more important to modern businesses considering that enterprise software is now an integral part of any business.
Software risk management starts during the software development phase, as there are several risks associated with building an application. Managing these risks correctly allows you to effectively manage the software development lifecycle and leads to a better overall product.
Top Software Development Risks
If this is the first time you’ve embarked on a software development journey, knowing what risks to look out for may be challenging. While your development team should advise on software development risks, it’s essential that you understand them yourself to ensure that you remain in overall control of your project. Understanding these potential risks mitigates the chances of them happening as you can work to prevent them–it also encourages positive and informed project management.
Scope Creep
Scope creep refers to the gradual expansion of project requirements outside of the initially defined project parameters. This generally appears as minor changes and additions to the scope. For instance, adding new user account types or additional functionality to existing features. In a scheduling app, for example, you may decide to add a time zone feature that automatically adjusts meeting times accordingly.
While these additions may seem inconsequential at the time, multiple unplanned additions can cause budget, timeline, and resource overrun, potentially putting your project in jeopardy. Changing requirements account for 48% of software project failures, meaning that keeping scope creep to a minimum is essential for the success of your software development project.
Lack of Skilled Developers
Hiring a software developer who does not have the right expertise will affect overall software product quality as a result of knowledge gaps. For example, if you hire an inexperienced software developer to build an application that requires third-party API integration, but it’s not in their skill set, it’s likely to function incorrectly.
While looking for a software development partner, you will come across many skilled agencies, such as Idea Maker. However, you will also encounter vendors who lack quality development skills. Therefore, you need to ensure that you partner with agencies with proven track records by meticulously reviewing their portfolio and expertise. However, 80% of technical hiring managers say that there’s a lack of talent in the industry.
So, when employing a development partner, ensure that you consider:
- Their portfolio of previous projects
- Technological expertise
- Customer service skills
- Post-release support options
As a result, not only do you end up with a lower quality product but also a delayed development timeframe as they try to figure out how to plug their knowledge gaps.
Budget Overruns
On average, large software development projects overrun on budget by 45%, which causes a significant impact on project profitability. Budget overruns are caused by numerous factors including:
- A poorly defined scope
- Improper budgeting
- Development delays
- Unexpected development challenges
As projects face budget overruns, a domino effect can be observed as the overrun negatively impacts other areas of development. For example, your project scope may need to be changed to adhere to new budgetary constraints as well as deadlines. Creating a detailed budget with a contingency plan is an effective way to avoid budget overruns.
Security Vulnerabilities
Cybercrime is cited as a top concern for 58% of risk officers, which is unsurprising when you consider the number of digital threats businesses face on a daily basis. Software security vulnerabilities are often more prominent during the development phase as the application is not yet complete, leaving it open to malicious interference. This can come in the form of:
- Hacking
- Poor password management
- Poor user permission management
- Temporary cloud storage solutions
If security vulnerabilities are not addressed during the initial development phase, then they are likely to persist through the software’s development lifecycle. This not only puts your software development at risk but also your users and their personal information.
Poor Project Management
The key to a successful software development project is solid project management. Project managers are responsible for overseeing all aspects of your software development project and ensuring that your resources are allocated appropriately; this may include labor and spending. As a result, poor project management quickly causes the custom software development process to encounter issues.
Effects of poor project management include:
- Miscommunication between team members
- Misguided or incorrect development goals
- Missing features
- Poor quality assurance
- Budget overruns
- Timeframe delays
As you can see from the above list, poor project management can impact all areas of your software development. This is because your project management team is central to the success or failure of your software development project, as they are the thread that weaves all aspects of your project together.
Technology and Tooling Challenges
When new technology and frameworks arrive, promising more bells and whistles than previous versions, it’s tempting to adopt them. However, using new frameworks over legacy systems with proven efficacy, brings several risks, including:
- Instability
- Lack of developer knowledge
- Lack of API and hardware capability
- Lack of documentation and support
As a result, while new technologies and frameworks are often enticing, you must ensure that they are fit for purpose. This means, assessing their compatibility, scalability, and available resources. It may be that you need to use a long-standing, proven framework, then migrate to the new system when it’s more widely used.
The risks of using new technology without an established positive track record go hand in hand with choosing the wrong tech stack. For example, you might choose to use React Native over Flutter for cross-platform app development. While both frameworks offer support for iOS and Android, they come with different advantages. React Native, for instance, is better suited to apps that utilize JavaScript.
Strategies to Reduce Software Development Risks
One of the many benefits of customer software development is that you are in complete control of your project. This gives you the power to implement effective risk mitigation strategies aimed at facilitating a smooth overall development.
Your level of control, however, is dependent upon which software development outsourcing models you have chosen. For instance, if you’ve elected to build an in-house team using outsourced freelancers, then you’ll have a high level of control. On the other hand, if you’ve hired a development agency to handle your project, you may have less control over the process, but they will implement their own risk management strategy.
Whichever way you choose, it’s good for you to understand some effective ways of limiting the risks surrounding software development.
Comprehensive Planning and Requirements Analysis
Thorough planning is at the heart of effective risk management, allowing you to take a comprehensive view of your project. By having such an overview, you’re in a strong position to identify and analyze potential risks. In particular, in-depth planning helps you to understand exactly what features your software needs, informing your budgetary decisions and timeline estimates.
While it’s easy to suggest that you comprehensively plan your software development, what does this actually look like? This involves creating a project specification that outlines the following:
- Required software features
- Design expectations
- User account types
- User permission
- Required development frameworks
- Development road map
Once you’ve defined your detailed project spec, you should then create a contingency plan that outlines the potential risks associated with your development and how you plan to address them.
Agile and Iterative Development
Agile refers to an iterative approach to software development, where software is built in flexible stages. This allows for modifications to be made to your software throughout its development and reduces the usual constraints of rigorous development.
The benefit of Agile software development methodology is that it allows you to act immediately upon issues as they arise, giving you the freedom to adjust iterations accordingly. For example, if your budget looks like it’s going to overrun, you can mitigate features from future iterations.
Additionally, Agile facilitates a feedback-first approach to development. Each iteration undergoes testing as if it’s the final product, meaning that every feature is subject to rigorous quality control. This allows you to identify any technical errors early on before they are built into the entire software architecture.
Effective Project Management Practices
As we discussed earlier in this article, good project management is at the core of a successful software development strategy. Managing a project effectively requires a thorough understanding of the project and its requirements. Whether you’re managing your project yourself or working with a project manager, you should consider the following effective project management strategies:
- Periodical Risk Assessments: Project managers should regularly run risk assessments throughout the software development process. For example, if you’re following an Agile approach, it’s good practice to reassess the likelihood of risks occurring after each iteration.
- Maintain Clear Reporting Channels: While it’s your project manager’s job to identify and manage risks, you should maintain clear communication channels between team members. This means that if, for example, a software developer comes across a potential problem they can easily and comfortably report them.
- Work Closely With Your QA Office: As you’ll be running risk assessments periodically, if you have a quality assurance office, you can work closely with them to help manage risks. This takes some of the burden off your project manager, allowing them to work more effectively.
- Develop a Risk Mitigation Strategy: Before embarking on a software development project, you should identify and assess risks that you’re likely to encounter. You can then create a risk mitigation strategy that directs your project manager on how to handle certain issues.
Strong project management relies on clear communication, meaning that you need defined communication channels that all team members use. This can simply be via email or you can use enterprise tools like Slack. You must also have an effective task management system in place–at Idea Maker, we use ClickUp, but alternatives, such as Asana are also available.
Skill Development and Team Building
Vigilance is crucial in staying on top of risks. As a result, your development team should be trained in the necessary skills to identify, report, and manage risks. This way, your development team can work as a well-oiled machine, poised for a smooth development process.
In order to effectively develop your team’s skills and teach them collaboration, you should:
- Ensure clear communication between team members
- Implement an open-door management policy
- Provide clear learning materials
- Teach employees about associated risks
- Involve employees in key project decisions
- Regularly check in with progress
- Offer opportunities for feedback
Following the above tips allows you to foster a culture of continuous learning within your team. Doing so will help employees understand risks and know what to do in the event of risk identification.
Budget Management and Financial Planning
Before embarking on your software development project, thorough financial planning and budget management are essential. Having a clear understanding of your business’s finances and what you can afford to spend on your projects, allows you to define project variables more accurately. For example, if you determine that you can only afford to build a minimal viable product (MVP), then you can restrict features in your project scope.
Some financial models you can use to effectively manage your budget include:
- Analogous Estimating: This budgeting model involves analyzing the budgets of previous projects with similar scopes, giving you a general idea of potential costs.
- Parametric Estimating: Parametric estimating uses historical project data while considering flexible project variables. Sometimes advanced financial algorithms are used to analyze and scale historical budgets.
- Top-Down Estimating: Top-down estimating is where you split your project into smaller components and estimate costs for each project area. For instance, you might evaluate the cost of a third-party plugin integration separately from the cost of the quality assurance process.
Half of your budget management challenge is understanding how much money you need to effectively deliver a project. By using the above three methods to estimate your project budget, you will then be in an excellent position to manage costs.
Security First Approach
Security vulnerabilities are a great risk as a result of their knock-on effects, causing additional risks to come to fruition. For instance, a security flaw that needs to be patched will require extended development time and potentially cause budget overruns. Taking a security-first approach is an excellent way to mitigate the chances of security vulnerabilities appearing.
A security-first approach means conducting regular security audits to identify vulnerabilities before malicious parties can take advantage of them. If you’re taking an Agile approach to development, then these security audits can be conducted with each software iteration. Otherwise, you’ll need to analyze your project and identify at which point it’s best to conduct security audits.
Software Development Risks Key Takeaways
By now, you should have a solid understanding of software development risks to expect and how they can be mitigated. Risks include budget overrun, scope creep, lack of technical skills, and poor project management. Ultimately, most risks can be mitigated by fostering a positive culture of learning, clear communication, and risk prevention.
If you’re looking for custom software development without the hassle of managing risks yourself, consider working with Idea Maker. We have a team of expert software developers and experienced project managers dedicated to delivering exceptional software. Schedule a free consultation today to get started.
