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Risk Management Strategy for Software Development

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Software development requires a high level of technical expertise and strong knowledge of the rapid evolution of available technologies. This results in an ongoing state of change and uncertainty that exposes development projects to risk.


A risk management strategy keeps companies abreast of such risks; by virtue of identifying, prioritizing, and managing them proactively rather than when they arise, because they always do.


Defining Risk & Risk Management in Software Development

A risk is any potential problem that can happen. In software development, common problems include limiting efficiency, growth, and user experience. Risk management is a core tenant in the early stages of product development and saves time, money, and headaches down the line.


No risk is 100% avoidable, so risk management strategies usually aim to identify and mitigate known risks. Addressing these risks early frees up resources to deal with any unforeseen problems that may occur.


Risk Management Strategy

The basics of risk management strategy follow three foundations. Assess potential risks. Prioritize by importance, severity, and capability. Manage the risk in sequence of priority. We apply these foundations in a 5 step process.


Step 1: Identify Risks

Experience is a key factor in accurately identifying risks. This is one of the benefits of working with an outside software development team. They can draw on past development projects for insights on what potential risks might arise.


Once the risks are identified, it’s important to classify them. This classification should identify the source of the risk, the potential triggers, and the signs of it emerging. Using this makes it easy to monitor and react to issues in a timely and effective manner.


Step 2: Prioritize Risks

Trying to eliminate all risk factors before product launch can feel like playing whack-a-mole. Every time you put down one risk, another rears its head. To release products on time and on budget, eliminating all risks is not typically practical. 


Instead, the best approach is to deal with the biggest threats first while monitoring other known risks as you go. It’s a similar practice to launching with a Minimum Viable Product- you release the most important features first, refining and improving with future iterations.


In prioritizing risks, look not only at their impact on your software but also on what you can do about them. For instance, if your product would be heavily impacted by a stock market crash, that would be a risk concern - but, it’s also a risk outside of your control. Focus on what you can resolve first.

Step 3: Create A Risk Management Plan

You have classified the risks and their triggers, you’ve listed them by priority, the next step is putting together a plan to manage them. This plan should establish clear timelines and responsibilities.

  • Who is responsible for addressing specific risks?

  • When should each management strategy be implemented?

  • What tools, technology, or support is required?

  • How is each risk to be addressed?

Step 4: Implementation

Plain and simple, reference the risk management plan and implement strategies accordingly.

Step 5: Monitor 

Once you implement your risk management strategies, continue to monitor for risks and their triggers. It’s important to stay on top of all known risks, avoiding potential triggers, and addressing issues as they appear.


Common Project Risks in Software Development

Implementation of New Technologies

Any new technology has possible unknown and unprecedented risks. The unknown and unproven present new risk factors. This can make it more difficult to assess risk and makes active management especially important.


Organization & Architecture

Organization and architecture risks affect processes, workflows, and the functionality of your tech ecosystem. Project and technology roadmaps can improve risk identification and management.


User Experience & Performance

All features and functions need to work together seamlessly and intuitively for optimal UX performance. A technology audit and analysis can ensure you have all the right tools in place, but it’s still important to monitor for identified risks.


Software Development Services in Toronto

Torinit is a strategic technology partner headquartered in Toronto. Our team helps businesses grow at all stages, from pre-seed through enterprise. Benefit from our business and product development services, technical audits, unique expertise, and specialized partnerships.


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