Software development risks:
types & mitigation strategies

Software development risks: types & mitigation strategies

February 20, 2024

Common risks in software development

Budget risks

Project cost belongs to the category of major risks. Cost overruns can happen for various reasons, including unplanned expansion of the project’s scope or inaccurate budget estimation.

How to minimize the risks:

  • To create an accurate budget, determine functional and non-functional software requirements, estimate the total effort required to complete the project, and establish a contingency reserve for unexpected costs like training expenses in case of employee turnover.
  • Carefully track the project’s progress and its financial status to ensure the expenses remain within the planned budget.

Project schedule risks

Unrealistic deadlines, inaccurate estimations, inadequate allocation of human resources, poor scope definition, or frequent project scope expansions lead to delays in product delivery. This forces the client to either move the deadlines to fit the scope of work or add extra specialists to the project to speed up the process.

How to minimize the risks:

  • Collaborate with the software development team to estimate the duration of each project task and define the project’s milestones, allocating buffer time for unexpected setbacks and unforeseen issues. Make sure the project schedule is well-documented and clear to all team members.
  • Establish strong project controls to measure project status based on planned schedules.
  • If deadlines are non-negotiable, prioritize the development of the product’s critical functionality.

Scope creep

If a project specification only briefly describes its scope or if the scope continuously changes, additional requirements will inevitably be introduced as work progresses. This increases the probability of missed deadlines, increased costs, and compromised product quality.

How to minimize the risk:

  • Elicit all software needs and requirements, conduct a value vs. effort analysis, and draw up a list of 'must-have,' 'beneficial,' and 'nice to have' product features.
  • Set up a clear change control process to document requests for changes, assess the impact of changes on project timelines and budget, and ensure the approved changes are implemented with minimal disruptions.
  • Split the project into short, manageable iterations to enable teams to adapt quickly to changing requirements and better track project progress.

Insufficient communication

Ineffective communication between the project team and business users can result in scope creep, inadequate resource allocation, and unmet end-user expectations.

How to minimize the risk:

  • During the initiation stage, create a communication plan for project stakeholders. Clearly define what information they will receive as well as the communication methods and frequency at which the information will be shared.
  • Promote effective communication and collaboration among teams and team members using dedicated software tools like Slack or Microsoft Teams.

Low team productivity

Productivity issues can arise due to unclear project requirements, conflicts between team members, insufficient expertise, or when the project team members work in different time zones and can’t collaborate sufficiently.

How to minimize the risk:

  • Practice task rotation and pair work to improve team motivation and productivity.
  • Allocate time for real-time communication and collaboration between the team members during the initial estimation of the project’s timeframe.
  • Involve your team members in surveys and hold face-to-face meetings to gather their opinions on what may affect their work and satisfaction.

Employee turnover

When a team member leaves a software development project, searching for a candidate with the required skill set can take a lot of time. This in turn can lead to increased workload for other developers involved in the project, project delays, and compromised product quality.

How to minimize the risk:

  • Ensure that all activities within the project are properly documented so that new team members can easily grasp them.
  • Organize training programs for developers to enhance their skills relevant to the project, facilitate knowledge transfer between the team members, and assign mentors to new team members to streamline project onboarding.
  • Consider IT outsourcing to save time on finding the right talent for your in-house team.

Tech stack relevancy

Opting for an unsuitable or outdated tech stack, as well as embracing new, unproven technologies, can lead to low product quality. In the long run, this can result in problems with maintaining, updating, or upgrading your software, consequently increasing its post-deployment costs.

How to minimize the risk:

  • Evaluate the compatibility of the selected technology stack with your product's long-term vision to ensure its successful evolution. For example, whether the chosen technology allows for the platform's scalability if the number of end-users rapidly increases.
  • Conduct an audit of the target IT environment to verify the final solution can be seamlessly integrated with the existing systems and support future integrations.
  • If the project relies on new technologies, develop a contingency plan that allocates adequate time and resources for learning and problem-solving.

Сode quality

Low-quality code can cause software performance errors, difficulty in scalability, security vulnerabilities, maintainability, or accumulation of technical debt. Poor code quality can stem from insufficient time or effort allocated for code checks or inadequate skill levels.

How to minimize the risk:

  • Conduct regular and thorough manual code reviews after the automated checks.
  • Consider code refactoring to improve code quality, readability, and maintainability.
  • Adhere to the globally accepted coding standards for specific programming languages as well as guidelines and rules established in-house.

Security risks

Software security can be compromised due to poorly defined requirements, incomprehensive information from stakeholders, or the project team neglecting secure software development practices. Security risks may also occur when the project team lacks certain skills or is unaware of relevant security tools and techniques. As a result, software with compromised security can lead to data breaches or leaks, non-compliance with general or industry-specific regulations, and financial and reputational losses for the company.

How to minimize the risks:

  • During the discovery stage, specify the solution’s type, end users, and all applicable standards to define the software’s security requirements.
  • Adhere to secure coding standards.
  • Introduce DevSecOps to the SDLC to make security a shared responsibility among all team members involved in software development and integrate security practices throughout the SDLC.
  • Follow established secure software development guidelines and frameworks like NIST SSDF or partner with a software vendor that adheres to these guidelines.

External risks

Unpredictable factors like legislative or regulatory changes, natural disasters, economic shifts, and changing consumer behavior can delay product delivery and incur extra costs.

How to minimize the risks:

  • Prepare a contingency plan to avoid or minimize damage caused by external factors.

A typical risk management process



Recognize all the events that can negatively affect the objectives of the project



Evaluate and prioritize the identified risks based on their probability and impact severity level



Create a risk management plan to reduce the probability and/or impact of potential threats



Continuously monitor risk triggers and potential threats throughout the project


Act on

Take appropriate actions if a risk occurs and document every risk management activity



Analyze risk control effectiveness to ensure the implemented measures are valid and appropriate

How to identify software development risks

To discover and measure all potential threats in the software development lifecycle, project managers can use appropriate risk identification techniques or a combination of them.


Interviews with various subject-matter experts, business analysts, and focus groups allows you to gather information helping you spot subtle risks. In addition, interviews can help reveal hidden risks associated with human behavior, like team members’ working habits or cultural backgrounds.


Providing a platform for project members with diverse experiences to generate as many ideas as possible and elaborate on each other's suggestions helps identify potential risks that aren’t apparent to everyone.


By creating a functional prototype of the software, developers can identify design flaws or ambiguities in the product requirements. Once you’ve validated the product’s concept with the prototype, you can more accurately estimate resources, time, and materials required for further development, thus avoiding time and budget risks.

Expert judgment

Project managers can seek advice from team members, subject matter experts, or consultants based on their skills or knowledge in a particular area. Expert judgment can help with risk assessment in situations with high uncertainties or limited available information (for example, in projects involving emerging technologies).

Risk checklist

Checklists compile risks captured from past projects, team members’ experience, or brainstorming sessions. Risk checklists help project managers better define the contingencies and ensure that common project risks are not overlooked.

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Four main risk management strategies

There are several approaches that companies can employ to handle software development risks depending on the type of risk and the impact it can produce.

Risk avoidance

This is a radical risk management strategy where a business refuses to engage in any activity likely to pose a risk. Risk avoidance can be used when the potential damages from the risk outweigh the anticipated profits from the activity. While risk avoidance effectively mitigates potential harm, it comes at the cost of depriving companies of opportunities to generate profit and hampers the process of innovation.
  • Using proven technologies instead of new ones
  • Not adding features that could muddle the software

Risk mitigation

Risk mitigation is used to either prevent a risk or lower the impact or probability of its negative consequences. Risk mitigation is the predominant strategy for managing risks in custom software development, as it ensures a balanced approach to addressing challenges and uncertainties.
  • Defining and continuous tracking of project performance metrics.
  • Regular code reviews and quality assurance testing help mitigate technical risks in a software development project.

Risk transfer

This approach entails outsourcing the project and its risks to a third party. Companies can practice risk transfer when there is a need for swift project execution without compromising product quality. While this strategy is a simple and fast solution, it can incur significant costs.
  • Outsourcing the entire or a part of a software project to a third-party software development company
  • Augmenting an in-house team with the missing talent

Risk acceptance

The project team accepts the risk without any preventive measures addressing consequences as they arise. This approach is suitable when the effort or cost of avoiding, mitigating, or transferring the risk exceeds its potential impact or when the likelihood of the risk occurring is low. It requires businesses to tackle all the negative consequences confidently.
  • Software startups can choose to accept certain risks to deliver a minimum viable product within tight time limits

Our services

Over 25+ years in software development, we have accumulated extensive technology and project management expertise that helps us to reduce risks in IT projects we handle and smoothly resolve any emerging ones.

Software product development

We develop robust software solutions tailored to companies’ unique needs following established software engineering standards and proactive risk management procedures.

Why risk management is important in software development

Integrating risk management into the software development process provides tangible benefits to companies.

Cost overrun prevention

Proactive risk management helps prevent delays and time-consuming reworks and keep the project within budget.

Better project planning

Detecting potential issues early on allows managers to better understand the project's constraints, allocate necessary resources to high-risk areas, and prepare an accurate, realistic plan.

Team efficiency

With potential risks appropriately and promptly addressed, the development team’s workload is balanced, so they can focus on the project's core activities without wasting time resolving unexpected issues.

High software quality

Risk management allows for the identification and elimination of factors that can undermine the end-product’s quality, ensuring the delivery of secure, high-performance, and maintainable software in line with the project’s requirements.

Safeguard your software development project from failure

Companies initiating a software development project can face multiple risks, from unclear project scopes and underestimated technological hurdles to the absence of collaboration between the team members. However, such risks don’t have to ruin projects. To prevent or mitigate potential damage, companies should assess risks before the project starts and consistently address the weak points during each stage of the software development life cycle using a relevant risk management framework. If you’re looking for a technology partner to facilitate your software development journey with minimal risks, Itransition is ready to help.

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