Types of Risks in Project Management

Risks in Project Management:

Every project is susceptible to a large number of risks. Without effective management of the risks, even the most meticulously planned project may go hay ware. A risk is any anticipated unfavourable event or circumstance that can occur while a project is underway. There are three main categories of risks that can affect a software project:

i. Project Risks
ii. Technical Risks
iii. Business Risks

Project Risks: Project risks concern various forms of budgetary, schedule, personnel, resource, and customer-related problems. An important project risk is schedule slippage. Since the software is intangible, it is very difficult to monitor and control a software project. It is very difficult to control something which cannot be seen.

Technical risks: Technical risks concern potential design, implementation, interfacing, testing, and maintenance problems. Technical risks also include ambiguous specifications, incomplete specifications, changing specifications, technical uncertainty, and technical obsolescence. Most technical risks occur due to the development team’s insufficient knowledge of the product.

Business risks: This type of risk includes the risk of building an excellent product that no one wants, losing budgetary commitments, etc.