Analysis of systems development project risks

Abstract

Information systems development projects are a significant expenditure of time, effort and money for many enterprises. Historically it has been estimated that 50-80% of projects fail to achieve their objectives for a variety of reasons. Researchers have identified numerous factors associated with system development failure. In this paper, we first synthesize the vast research regarding systems development risk factors and provide a framework that illustrates interactions between risk factors. The framework was used to develop an open-ended questionnaire that was answered by an inter-industry group of experienced systems development engineers and project managers. Analysis of their reports indicates that experienced professionals perceive that all risk factors (technical, resource, etc.) ultimately derive from organizationally-oriented factors, to be solved with organizational responses. This holistic viewpoint of risk assessment is counter to that of systems professionals more involved in day-to-day development decision making. For these developers, risks are more likely to be characterized as fitting into traditional discrete categories. This apparent dichotomy of risk importance was further investigated through an intra-organizational study which directly assessed how professionals recognize and treat risks in the development process. Results illustrate that a successful project environment may be characterised as one in which all systems professionals maintain a holistic view of organizational risk and that organizational culture, as opposed to experience, may predicate such an environment. Implications and future research directions are discussed.