If we search internet on  “IT project failure rates” or “IT project success rates”, the amount of research papers on the reasons for failure and the statistics around the failure rates are amazing. We can find various organisations doing the research, published very many dimensions of reasons and categorisation of projects.    One common theme evolving out of these, is around Project Management in general and Risk Management in particular.

The purpose of this article is to bring out a list of major risks that surround the IT projects and if organisations can evaluate their projects before hand against these risk items, then it would help them to plan for the mitigation of the risks and set realistic goals to ensure higher success rate of IT projects for their organisations.

Please note that the risks given below are not in any particular sequence and this is not an exhaustive list.   Again, the importance of these risks could vary from project to project and could change from time to time during the course of the project.   The project team should consider all these meticulously as a checklist, before finalising the project plan.

1. The maturity of the Products and Technologies – higher the stability of the technology and products, the lower will be the probability of this risk.  This will be applied to all project components such as Hardware, Software, Databases, Network, Service providers for Cloud infrastructure etc.
2. Prior experience of the deployment – there could be more than one product and more than one technology that could go into a single project.   The experience and knowledge of deploying each of the components has a direct bearing on the project risk.
3. Overall duration – both, too short a duration or too long a duration of the project, pose equally higher level of risks for the project.  While shorter duration projects have limited time to recover, in case of any unforeseen circumstances, the longer duration projects are subject to higher level of changes during the course of the project.
4. The number of entities involved – generally the probability of risk goes up along with the number of entities involved, as there could be potential delays in some of the decision making cycles.   Number of departments, head office, branches, systems involving outside parties, like government agencies, banks, vendors, channel partners and customers are the potential entities.
5. The geographical distribution of the entities – if the entire project team is one location and have the ability to get connected with each other easily and frequently, then the probability of success for such projects is higher, as such environment eliminates or minimises the risks.
6. The users or the customers’ commitment to make the project successful -Higher, the level of commitment and support from the management and users, the lower will be probability of risks.
7. The flexibility on the schedule – If the schedule is rigid, like a project time line controlled by outside agencies such as, Government or regulatory body setting a cut-off date, then the risks tend to be higher.  If the project management team has a flexibility to manage or adjust the schedule of the project, then the risks tend to be lower.
8. Early formation and involvement of the project team – The project risks around the requirements tend to be low, if the project team is involved at a very early stage, like, the conceptualization.  The reverse is also true, the risks tend to be higher, if the project team is inducted at a later stage.

To summarise,  it is clear that the IT projects will have different types of risks and each risk will have different probability of occurrence and different level of impact on the project.   Again both the probability and impact could vary over the project life cycle and it is one of the key responsibilities of the project management function to manage these risks continuously.

Risk Checklist Example

The specific combinations of the probability and impact that lead to a risk to being rated as Very Low, Low, Medium, High and Very High, importance are usually set by the organsiation.  The ability of the  organisation to identify the exact position of the importance of each risk in the above spectrum, enhances the risk management skills in the organisation and thereby increases the project success rate.

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