Risky BusinessPosted by Tim Ballard at April 23rd, 2015
What is risk? Risk is the possibility of loss. That can be a financial loss, a loss of time, a loss of opportunity, or loss of credibility. There is no way to completely eliminate risk, but it can be managed. Identifying and mitigating risks is a crucial part of software management and Buena Digital can help you ensure your project will be a success.
Our project workflow always begins with a discovery period in which we work with our clients to help identify risks they will face in their upcoming project. Not effectively assessing and managing risks can cause your software project to be over budget, late or outright fail. There are several potential risks that need to be identified and assessed before a project begins.
Some risks are project risks, that most every software team faces. Other risks are business risks, which has to do with the economic viability of your product. There is a third risk type that often gets completely overlooked, the risk of inaction, which is the risk associated with not doing anything at all. I’ve divided the most important risks by these risk types, with my notes on what I’ve seen as a project manager:
- Knowledge - Does your team have the skills needed to complete this project? Do an assessment of the talent you have on the project. Does your team have enough working knowledge to complete the project as requested?
Research shows the level of competency required is higher than that employed within projects for 70 percent of companies.Whatever you need to do to ensure you have enough knowledge and talent on your team, you do it. Technical knowledge is often a weakness for companies, but it is Buena Digital's biggest strength. We have been using Microsoft tools to create software solutions since 2010, and our team has over 30 years of combined experience in software development. We've also helped many clients as a technology consultant, answering their questions about technology and pointing them in the right direction to succeed.
- Availability - Once you have the necessary talent, you need to know if you have enough of it. Do you need another designer to help out on creating the new PSD’s? Do you have enough developers to realistically complete the project on time? NOTE: Plan for emergencies. People get sick, disasters happen, have a contingency plan in place. Availability is another of Buena Digital's strengths. We are an agile software team that can ramp up to fit any project size with minimal notice.
- Requirements - Do you and your project stakeholders have a clear understanding of the project requirements, and a system in place to manage change requests? Spend the extra time at the beginning of a project to fully review and document the requirements, you will save yourself a lot of trouble in the long run because changes in scope late in the game are a recipe for failure. Make sure change requests don’t just get lost in the ether, document and prioritize all change requests. Some people are afraid of saying no to change requests, but you don’t have to say no outright, just add the request into the backlog for phase 2 of the project.
Typically over 41 percent of the IT development budget for software, staff and external professional services will be consumed by poor requirements at the average company using average analysts versus the optimal organization.
- 3rd Parties - Are you using any third party vendors that you've never worked with before? This one cannot be overstated. If you’re working with a group that you have never worked with that is not a part of your organization, this is a huge unknown that must be identified as a potential risk. You don’t know their response times, or how high up on their priority list you are, or if your representative from their organization is even competent enough to handle your account.
- Technology - What technology are you using for this project and why? Is it viable, secure, and scalable? This is very closely related to knowledge on this list. Does your team fully understand the technology being used. Did you choose the tech because you’re familiar with it, or did you have no choice because its a legacy project? Find out what you don't know first and you can spend time at the beginning of a project mitigating the potential risk before its too late. We've acted as consultants for several clients to help answer their questions about all things tech including mobile app development, responsive design, the Cloud, API's and legacy app integration.
- The Competition - What are your competitors doing, and why? Are you working on this project just because your competitor has something similar? Do your research to see if this is even something your company should be doing. You can spend your money building up your infrastructure instead of keeping up with the Joneses. Case and point, the Amazon Fire Phone, just because you can do it, doesn't mean you should.
- Politics - Are there any potential political changes that may affect this project? Regulations, policies etc. This is heavily dependent on the industry you are in, but it’s something all organizations need to be mindful of. Have a good lawyer on speed dial.
- Profit - Is this project in line with the current economic market? Are you ahead of the curve or behind it? Are you entering into an already saturated market?Is this project really going to make a dent, or be just another drop in the bucket? Do your homework, build a concrete value proposition and find your niche market before investing heavily in a project.
The Risk of Inaction
There are several risks associated with any project, but this one is often overlooked. Many companies hesitate to pull the trigger on a project because they're worried about losing money, or they lack the necessary data to make an informed decision. The companies most at risk of inaction are already successful companies. Why fix it if it ain’t broke? That is the exact opposite of what they should be thinking. Be aware of emerging technologies, and pay close attention to what your competitors are doing. If you don't believe me, here is a list of some companies that thought their business model was bulletproof:
- Blockbuster Video
I could keep going but I think I've made my point. Don’t be afraid to act, because by not acting you put your company at risk of becoming obsolete. As Seth Godin says “The cost of being wrong is less than the cost of doing nothing” (Poke the Box, 2015)
Once we’ve helped you identify the risks you’re project is facing, we help you develop a plan to mitigate those risks over the life of their project. If you're about to start a project, or you're already in a project and you need some help, give us a buzz. We're happy to help!