How to Successfully Evaluate IT Project Risk
John Edwards, Technology Journalist & AuthorMay 15, 20255 Min ReadTuta via Alamy Stock PhotoGetting a new IT project off the ground requires a concept, a goal, meticulous planning, and, perhaps most importantly, a willingness to assume a certain amount of risk. It's this last point that often keeps IT leaders awake at night. Addressing risk prior to launching an IT project is crucial, since it helps to set clear expectations, identify potential obstacles, and create a roadmap for handling unforeseen challenges, says Anbang Xu, founder of JoggAI, an AI-powered video platform, and a former senior product manager at Apple and senior software engineer at Google. "Particularly when it comes to AI-driven projects, understanding the risks -- whether they're related to technology, data security, scalability, or talent -- can make the difference between a smooth launch and a failed initiative," he observes in an email interview. "By addressing these concerns early, you also ensure that resources are allocated effectively, and your team is better equipped to handle surprises." Building a strong mechanism to address risk during project planning is crucial to ensure that all decisions are made with transparency into cost, benefit, and risk, says Ola Chowning, a partner with technology research and advisory firm ISG. "Project decisions that don't estimate risk and its tangible or intangible impacts at the start, or even during a project, likely don't have the data needed to make informed decisions and balance cost, risk, and benefit," she explains in an online interview. "More importantly, failing to address risk can waste time if an event occurs and the team is left scrambling to determine how to respond." Related:There are also secondary risks, including budget, resources, and technology challenges, says Munir Hafez, CTO of Independence Pet Holdings via email"Each of these risks should be addressed before launching an IT project to ensure that the project is starting off on a solid foundation and will gain alignment with all stakeholders." Accurate Estimations By quantifying risks, project managers can objectively assess their potential likelihood and impact, allowing efficient resource allocation and the development of appropriate mitigation strategies, Hafez says. "This structured approach ensures that no significant risks are overlooked and that the project remains on track." The best way to estimate risk is to divide the project into small components and assess the uncertainty around each unit, Xu says. This process includes examining the project's technical feasibility, the team's ability to handle complexity, and any potential dependencies on third-party tools or services. Xu states he relies on a combination of historical data from similar past projects and predictive models -- particularly when it comes to AI and machine learning applications, where it's often unknown how algorithms will perform at scale. "This allows us to develop a more nuanced risk profile, instead of relying on assumptions," he explains. Related:Many organizations use a risk scoring tool, built on previous project experiences and common risk categories, to guide project teams on risk types for their particular project, Chowning says. "Someeven have statistics on how often risks have occurred in the past and the average impact on previous projects." Risk Tips If a risk estimate appears overly optimistic, the leader should reassess the situation and adjust the project plan accordingly, Hafez says. "This may involve consulting industry experts or revisiting lessons learned from previous internal projects to accurately reflect the risk." The biggest mistake is underestimating the impact of technical debt and the complexity of scaling solutions, Xu warns. "Leaders often focus too much on the initial development phase and don’t account for the ongoing maintenance and optimization required," he explains. "Risk should be measured not only by the initial launch, but also by the long-term implications of maintaining and improving the post-launch system." Related:Final Thoughts As a project progresses, existing risks can evolve and new risks may emerge, Hafez says. "Regularly reviewing and updating the risk management plan ensures that the project will remain resilient and adaptable to these changes." Fostering a culture of open communication and encouraging team members to report potential risks early can significantly enhance a project's ability to respond effectively, Hafez says. This proactive approach helps avoid the "watermelon effect," where performance metrics appear positiveon the surface, but reveal underlying problemswhen examined more closely. Embrace flexibility, Xu advises. In tech, especially in fields such as AI, things are constantly evolving. "A leader’s ability to adapt and pivot when necessary is as critical as the ability to plan," he notes. That's why it's important to continue refining risk assessments throughout the project's life. It’s important for project team and business decision-makers to understand that risks aren't a bad thing, Chowning says. "The underlying objective of risk management is to understand and mitigate risk, and to be prepared if risk events occur." Making high project risk scores a "bad thing" will simply drive team leaders and members to underestimate, ignore, or even attempt to hide potential risk. About the AuthorJohn EdwardsTechnology Journalist & AuthorJohn Edwards is a veteran business technology journalist. His work has appeared in The New York Times, The Washington Post, and numerous business and technology publications, including Computerworld, CFO Magazine, IBM Data Management Magazine, RFID Journal, and Electronic Design. He has also written columns for The Economist's Business Intelligence Unit and PricewaterhouseCoopers' Communications Direct. John has authored several books on business technology topics. His work began appearing online as early as 1983. Throughout the 1980s and 90s, he wrote daily news and feature articles for both the CompuServe and Prodigy online services. His "Behind the Screens" commentaries made him the world's first known professional blogger.See more from John EdwardsWebinarsMore WebinarsReportsMore ReportsNever Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.SIGN-UPYou May Also Like
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How to Successfully Evaluate IT Project Risk
John Edwards, Technology Journalist & AuthorMay 15, 20255 Min ReadTuta via Alamy Stock PhotoGetting a new IT project off the ground requires a concept, a goal, meticulous planning, and, perhaps most importantly, a willingness to assume a certain amount of risk. It's this last point that often keeps IT leaders awake at night. Addressing risk prior to launching an IT project is crucial, since it helps to set clear expectations, identify potential obstacles, and create a roadmap for handling unforeseen challenges, says Anbang Xu, founder of JoggAI, an AI-powered video platform, and a former senior product manager at Apple and senior software engineer at Google. "Particularly when it comes to AI-driven projects, understanding the risks -- whether they're related to technology, data security, scalability, or talent -- can make the difference between a smooth launch and a failed initiative," he observes in an email interview. "By addressing these concerns early, you also ensure that resources are allocated effectively, and your team is better equipped to handle surprises." Building a strong mechanism to address risk during project planning is crucial to ensure that all decisions are made with transparency into cost, benefit, and risk, says Ola Chowning, a partner with technology research and advisory firm ISG. "Project decisions that don't estimate risk and its tangible or intangible impacts at the start, or even during a project, likely don't have the data needed to make informed decisions and balance cost, risk, and benefit," she explains in an online interview. "More importantly, failing to address risk can waste time if an event occurs and the team is left scrambling to determine how to respond." Related:There are also secondary risks, including budget, resources, and technology challenges, says Munir Hafez, CTO of Independence Pet Holdings via email"Each of these risks should be addressed before launching an IT project to ensure that the project is starting off on a solid foundation and will gain alignment with all stakeholders." Accurate Estimations By quantifying risks, project managers can objectively assess their potential likelihood and impact, allowing efficient resource allocation and the development of appropriate mitigation strategies, Hafez says. "This structured approach ensures that no significant risks are overlooked and that the project remains on track." The best way to estimate risk is to divide the project into small components and assess the uncertainty around each unit, Xu says. This process includes examining the project's technical feasibility, the team's ability to handle complexity, and any potential dependencies on third-party tools or services. Xu states he relies on a combination of historical data from similar past projects and predictive models -- particularly when it comes to AI and machine learning applications, where it's often unknown how algorithms will perform at scale. "This allows us to develop a more nuanced risk profile, instead of relying on assumptions," he explains. Related:Many organizations use a risk scoring tool, built on previous project experiences and common risk categories, to guide project teams on risk types for their particular project, Chowning says. "Someeven have statistics on how often risks have occurred in the past and the average impact on previous projects." Risk Tips If a risk estimate appears overly optimistic, the leader should reassess the situation and adjust the project plan accordingly, Hafez says. "This may involve consulting industry experts or revisiting lessons learned from previous internal projects to accurately reflect the risk." The biggest mistake is underestimating the impact of technical debt and the complexity of scaling solutions, Xu warns. "Leaders often focus too much on the initial development phase and don’t account for the ongoing maintenance and optimization required," he explains. "Risk should be measured not only by the initial launch, but also by the long-term implications of maintaining and improving the post-launch system." Related:Final Thoughts As a project progresses, existing risks can evolve and new risks may emerge, Hafez says. "Regularly reviewing and updating the risk management plan ensures that the project will remain resilient and adaptable to these changes." Fostering a culture of open communication and encouraging team members to report potential risks early can significantly enhance a project's ability to respond effectively, Hafez says. This proactive approach helps avoid the "watermelon effect," where performance metrics appear positiveon the surface, but reveal underlying problemswhen examined more closely. Embrace flexibility, Xu advises. In tech, especially in fields such as AI, things are constantly evolving. "A leader’s ability to adapt and pivot when necessary is as critical as the ability to plan," he notes. That's why it's important to continue refining risk assessments throughout the project's life. It’s important for project team and business decision-makers to understand that risks aren't a bad thing, Chowning says. "The underlying objective of risk management is to understand and mitigate risk, and to be prepared if risk events occur." Making high project risk scores a "bad thing" will simply drive team leaders and members to underestimate, ignore, or even attempt to hide potential risk. About the AuthorJohn EdwardsTechnology Journalist & AuthorJohn Edwards is a veteran business technology journalist. His work has appeared in The New York Times, The Washington Post, and numerous business and technology publications, including Computerworld, CFO Magazine, IBM Data Management Magazine, RFID Journal, and Electronic Design. He has also written columns for The Economist's Business Intelligence Unit and PricewaterhouseCoopers' Communications Direct. John has authored several books on business technology topics. His work began appearing online as early as 1983. Throughout the 1980s and 90s, he wrote daily news and feature articles for both the CompuServe and Prodigy online services. His "Behind the Screens" commentaries made him the world's first known professional blogger.See more from John EdwardsWebinarsMore WebinarsReportsMore ReportsNever Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.SIGN-UPYou May Also Like
#how #successfully #evaluate #project #risk
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