Key challenges of information technology project risk management

© 2011 Hosniehsadat BanyahmadHigh failure rate of IT projects, cost and schedule overruns and failure to deliver expected requirements make IT project risk management an important topic to help overcome the facing difficulties and deliver projects more successfully. There are varieties of advice on IT project management as well as project risk management over the years in both practitioner and academic literatures. It is argued that the primary concerns in IT projects are to ensure the integrity of the development process by having all identified risk factors controlled under an effective management tool. External threatening events are discussed adequately in IT project risk management literature in both descriptive risk management and prescriptive strands. However, there is a shortfall in analysing internal influential factors. There is lack of evidence in the literature, regarding the impact of influential project environmental characteristics known as environmental enablers on risk management practice as well as the relationship among environmental enablers, risk management effectiveness, and project performance. This study tries to address the gap in the empirical investigation into all phases of IT project risk management practice and the lack of significant investigation in terms of relationship analysis for risk management practice and project performance. It is attainable by gaining insights into how project managers employ risk management practices. Based on the belief that those engaged in practice have the most relevant practical view, it is decided to implement the research study described in this thesis by conducting a survey, which would support a structured and purposeful exploratory approach. The status of risk management was analysed from six perspectives of risk identification, evaluation, treatment, monitoring, motivation, and responsibility assignment. Research findings indicate that practicing risk management has direct impact on the project performance, which means the more projects had effective risk management practices, the higher was the chance of meeting budget, schedule, and delivering business case benefits. It was evident that providing risk management techniques to the projects, support project cost management as the motivation for risk management practice and employing project budget as an effectiveness indicator are significantly related to the ability of the project to meet the budget. It was also identified, that provision of risk management training from sponsoring organisations to the projects and supporting quality management help the projects to meet the schedule. Another finding of the research study was that supporting schedule management by employing risk management practices assist in achieving business case benefits. These figures may assist project managers to consider risk management practice not only as a risk dealing procedure but also as a tool to improve project performance