Information Technology Project Risk Research Articles

Mitigating risk of failure in information technology projects: Causes and mechanisms

This paper shows how causes and mechanisms behind past information technology (IT) project failures can be used for systematic risk mitigation in new IT projects. This is significant because successful IT projects are needed to realise the benefit potential of digitalisation, whereas failed IT projects overspend resources and underdeliver benefits. In this paper we a) identify factors and causes that lead to IT project failure, b) analyse the consistency over time of the identified factors and causes, c) expose mechanisms of failure by analysing failure factors, causes, and common features of IT projects, and d) show how this knowledge can be used in IT project risk evaluations. The paper uses hermeneutic literature review, statistical analysis of failure factors in the literature, content analysis of the reviewed literature, and process tracing.

A Conceptual Framework to Discover IT Project Risks in Developing Economies: An Application to Cambodia and Uganda Contexts

Background: The information technology (IT) project environment in developing economies is complex and dynamic due to their unique social, technological, cultural, and political contexts. However, the unique risk factors involved in IT projects in developing economies have seldom been discussed in the literature. This study proposes a conceptual framework for identifying risks in IT projects by considering the unique characteristics of project management in developing economies. Method: 17 project cases were examined via a series of expert interviews in Cambodia and Uganda. The interview results were coded into a total of 257 risk incidents, which were used to validate the proposed framework. Particularly, the risk incidents of each economy were matched with 16 risk categories under the proposed framework. The matched results were conceptualized into unique risk factors of each economy. Results: Our results reveal that the most critical risks in both economies involve the lack of structured and standardized project management (PM) processes, and misunderstanding and poor decision-making due to the lack of project experience and technical knowledge in local stakeholders. In addition to these shared risk factors, the two economies show distinct risk granularities. Particularly, IT projects in Cambodia are more vulnerable to cultural uniqueness while IT projects in Uganda suffer more with complex stakeholder structures. Conclusions: The proposed framework serves as guidance to identify IT project risks in developing economies. Furthermore, the identified risk factors using the framework proposed by this study help project managers or stakeholders recognize and mitigate the unique IT project risk factors in the two developing economies.

Assessment of Risks in Information Technology Projects

The risk associated with information technology is quite big especially when it comes to using, own, operate, and select information technology systems for an organization. The risk associated with information technology is possibly termed as a business risk. It includes IT-related prospects that may affect businesses. This can be achieved with both a questionable relapse and scale which threatens the alignment of key objectives and goals. The study is based both on empirical studies and on true case analysis. The study found that top management understands the essential part of technology development in organizations that are infamous for corporate viability and efficiency because of the use of IT hardware and computer software.

Seeing the Trees or the Forest? The Effect of IT Project Managers’ Mental Construal on IT Project Risk Management Activities

In this research, we focused on one of the core issues associated with Information Technology (IT) project management, namely the tendency to inadequately manage project risks. Project managers (PMs) surely must know by now that risks can derail projects and that tools and techniques are available to support the risk management process. Why, then, do many PMs seem unable or unwilling to adequately manage project risks? We believe that answering this fundamental question requires gaining a better understanding of how PMs construe risks. To gain this understanding, we examined key activities associated with the risk management process from a CLT perspective to determine the impact of construal on the judgment and decision-making of IT PMs when it comes to managing IT project risks. We found that IT PMs with a concrete mental construal (1) identify a greater number of project risks; (2) perceive a greater potential impact of project risks; (3) perceive that more effort and resources are required for risk management; and (4) are less willing to enact risk responses than IT PMs with an abstract mental construal. We demonstrate that IT PMs’ mental construal can affect activities that are important to risk management.

A Risk Mitigation Framework for Information Technology Projects: A Cultural Contingency Perspective

As new information technology (IT) platforms continue to emerge, the technical project risk associated with developing IT projects for these platforms is particularly challenging for organizations. We develop a nomological network of people, process, and technology to gain insight into how the effect of technical project risk can be mitigated at the IT project team level. Drawing on cultural contingency theory, the IT project risk framework, and the IT project management literature, we elaborate on the IT project team composition and team processes necessary to mitigate technical project risk. We tested the nomological network by conducting a field study of 325 IT project teams over a 3-year period at a large corporation in China. We found that project risk mitigation processes mediated the effect of IT project teams’ cultural composition on IT project performance, and the effect of these processes on IT project performance was stronger under high levels of technical project risk compared to low levels of such risk. By incorporating the cultural contingency theory into developing a nomological network of technical risk mitigation processes, this work not only contributes to the IT project management literature, but also provides suggestions for practitioners on how to better leverage people, process, and technology in mitigating IT project risks.

Sublating Tensions in the IT Project Risk Management Literature: A Model of the Relative Performance of Intuition and Deliberate Analysis for Risk Assessment

The information technology (IT) project risk management literature comprises two dominant but diverging bodies of knowledge: the normative and the experiential. We conducted a three-step dialectical review of this literature with the aim of creating a bridging body of knowledge. In the first step, delineation, we synthesize the overarching variance and process explanations in each body of knowledge and motivate the examination of their divergences. In the second step, contrastation, we perform a dialectical interrogation of these bodies to articulate their key assumption-level tensions. We elaborate on the most prominent tension between the two bodies, namely, the relative performance of intuition and deliberate analysis for project risk assessment. In the third step, sublation, we propose a theoretical model that resolves this tension. Anchored in both bodies of knowledge and drawing from managerial decision-making research, the model proposes that the relative performance of intuition depends on characteristics of the IT project manager (project-specific expertise), the project (risks’ temporal complexity and risks’ structural complexity), and the project’s organizational environment (e.g., stakeholders’ involvement in risk management, methods-using pressures). Moreover, the model posits that project-specific expertise moderates all the other effects. Building on the bridging knowledge insights from this model, we discuss how researchers can design interventions to increase project managers’ use of deliberate analysis when it is expected to outperform intuition or to encourage reliance on intuition when it is likely to outperform deliberate analysis.

Effects of Risk Management Practices on IT Project Success

AbstractSuccessful management of an information technology (IT) project is the most desirable for all organisations and stakeholders. Many researchers elaborated that risk management is a key part of project management for any project size. Risk management is so critical because it provides project managers with a forward-looking view of both threats and opportunities to improve the project success. The objectives of this research are to explore organisational factors affecting IT project success and risk management practices influencing IT project success. Risk management practices include risk identification, risk analysis, risk response planning, and risk monitoring and control. The IT project success is measured by process performance and product performance. Data are collected from 200 project managers, IT managers, and IT analysts in IT firms through questionnaires and analysed using Independent Sample t-test, One-way ANOVA, and Multiple Linear Regression at the statistical significance level of 0.05. The results show that the differences in organisational types affect IT project success in all aspects, while the differences on organisational sizes affect IT project success in the aspect of product performance and total aspects. Risk identification and risk response planning influence the process performance and the total aspects of IT project success. Risk identification has the highest positive influence on product performance, followed closely by risk response, while risk analysis negatively influences product performance.

Alignment of Business Strategy and Information Technology Considering Information Technology Governance, Project Portfolio Control, and Risk Management

Information technology (IT) governance is an important component in developing an overall business and IT strategy. Factors to consider in the IT governance and strategy relationship are project portfolio control, risk management. Using a quantitative survey of 201 IT executives a significant relationship was shown between effective IT governance and project portfolio control and risk management. However, the results of the study did not support a significant relationship between effective IT governance and business/IT alignment. Ultimately, this study helped to shed light on the relationship between effective IT governance and project portfolio control as well as provided support to the existing literature on the relationship between effective IT governance and risk.

How the user liaison's understanding of development processes moderates the effects of user-related and project management risks on IT project performance

Managing risks in information technology projects is a prime concern for both researchers and practitioners. However, little is known on how key project-based knowledge, such as the user liaison's understanding of development processes (ULUDP), affects the relationship between risk and performance. Using quantitative data collected from 63 completed projects, ULUDP has been empirically proven to weaken the negative effects of user-related and project management risks on product performance. Although the effect of the project management risk on performance remains negative, this effect decreases significantly with high levels of ULUDP, whereas user-related risk affects performance insignificantly in such situations.

Information Technology Project Risk Management: Bridging the Gap between Research and Practice

The gap between research and practice is strikingly evident in the area of information technology (IT) project risk management. In spite of extensive research for over 30 years into IT project risk factors resulting in normative guidance on IT project risk management, adoption of these risk management methods in practice is inconsistent. Managing risk in IT projects remains a key challenge for many organizations. We discuss barriers to the application of normative prescriptions, such as assessments of probability and impact of risk, and suggest a contingency approach, which addresses the uncertainties, complexities, and ambiguities of IT projects and enables early identification of high-risk projects. Specifically, in a case study, we examine how the project management office (PMO) at one organization has bridged the gap between research and practice, developing a contingency-based risk assessment process well founded on research knowledge of project dimensions related to project performance, while also being practical in its implementation. The PMO's risk assessment process, and the risk spider chart that is the primary tool in this assessment, has proven to be effective for surfacing inherent risk at the early stages of IT projects, thereby enabling the recommendation of appropriate management strategies. The PMO's project risk assessment process is a model for other organizations striving to engage in effective and collaborative practices in order to improve project outcomes. The case illustrates the importance of considering the practical constraints of the context of application in order to transform research findings into practices that promote attainment of desired outcomes.

Comparing senior executive and project manager perceptions of IT project risk: a Chinese Delphi study

AbstractThe success rate for information technology (IT) projects continues to be low. With an increasing number of IT projects in developing countries such as China, it is important to understand the risks they are experiencing on IT projects. To date, there has been little research documenting Asian perceptions of IT project risk. In this research, we examine the risks identified by Chinese senior executives (SEs) and project managers (PMs), and compare these two groups. The importance of top management support in IT projects is well documented. Prior research has shown that from the perspective of IT PMs, lack of support from SEs is the number one risk in IT projects. Surprisingly, senior executives' perceptions towards IT project risk have never been systematically examined. One reason why lack of support from senior executives continues to represent a major risk may be that senior executives themselves do not realize the critical role that they can play in helping to deliver successful projects. In this study, we use the Delphi method to compare the risk perceptions of senior executives and project managers. By comparing risk factors selected by each group, zones of concordance and discordance are identified. In terms of perceived importance ascribed to risk factors, PMs tend to focus on lower‐level risks with particular emphasis on risks associated with requirements and user involvement, whereas SEs tend to focus on higher‐level risks such as those risks involving politics, organization structure, process, and culture. Finally, approaches for dealing with risk factors that are seen as important by both SEs and PMs are provided.

A Framework for Identifying and Understanding Risks in Information Technology Projects

Managing the costs, complexity, and risks of IT projects continues to be a challenge for many organizations. Project risk management is becoming an important sub-discipline of software engineering, and focuses on identifying, analyzing, and developing strategies for responding to project risk efficiently and effectively. This paper presents an IT project risk identification framework to facilitate identifying and understanding various project risks as part of an overall project risk management process. The proposed framework should be of interest to IT practitioners during the creation of the project plan and over the course of a project so that appropriate and corrective actions can be taken as needed. Moreover, this risk identification framework should also be of interest to IT academics in terms of teaching project risk management or as a theoretical basis for future research. Taken together, this may help increase the likelihood of IT project success.

Risk management in information technology projects

There are several studies on managing risks in information technology (IT) projects. Most of the studies identify and prioritise risks through empirical research in order to suggest mitigating measures. Although they are important to clients for future projects, these studies fail to provide any framework for risk management from IT developers' perspective. Although a few studies introduced a framework of risk management in IT projects, most of them are presented from clients' perspectives and very little effort has been made to integrate this with the project management cycle. As IT developers absorb a considerable amount of risk, an integrated framework for managing risks in IT projects from developers' perspective is needed in order to ensure success in IT projects. The main objective of the paper is to develop a risk management framework for IT projects from the developers' perspective. This study uses a combined qualitative and quantitative technique with the active involvement of stakeholders in order to identify, analyse and respond to risks. The entire methodology has been explained using a case study on an information technology project in a public sector organisation in Barbados.

Management of risks in information technology projects

Information technology (IT) projects are renowned for their high failure rate. Risk management is an essential process for the successful delivery of IT projects. In‐depth interviews with IT professionals from leading firms in Western Australia were undertaken to determine how IT risks were managed in their projects. The respondents ranked 27 IT risks in terms of likelihood and consequences to identify the most important risks. The top five risks, in order, were: personnel shortfalls; unreasonable project schedule and budget; unrealistic expectations; incomplete requirements; and diminished window of opportunity due to late delivery of software. The respondents overwhelmingly applied the treatment strategy of risk reduction to manage these risks. Furthermore, these strategies were primarily project management processes, rather than technical processes. This demonstrates that project management is a risk management strategy. Scope, quality management, and human resource management were solutions applied to several risks. In particular, managing stakeholders’ expectations is a specific risk treatment that helps to manage several key IT risks.

Managing risks in IT projects: an options perspective

Organizations are making large investments in information technology (IT) projects. However, many are risky and are often considered runaway, because they do not meet original expectations of cost, time, or benefits. Effective management of risks in IT projects is therefore extremely important. This paper emphasizes the need to differentiate between risks that can be resolved by action and risks that require hedging. It presents a framework for understanding and hedging risks in IT projects based on the finance literature on real options. This framework can be used to understand and justify project management decisions. The insight provided by this framework is consistent with practical managerial decisions in IT project management.