There are a huge number of risks in a project because the requirements for a software development project are typically much more difficult to define. For that reason, probably the biggest risk of all is that the project produces something that does not provide the business value it is intended to produce and the whole project is scrapped.
There are Four main categories of risks that can affect a software project:
1. 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. For any manufacturing project, such as the manufacturing of cars, the project manager can see the product taking shape. He can, for instance, see that the engine is fitted, after that the doors are fitted, the car is getting painted, etc. Thus he can easily assess the progress of the work and control it. The invisibility of the product being developed is an important reason why many software projects suffer from the risk of schedule slippage.
2. Technical risks
Technical risks concern the potential design, implementation, interfacing, testing, and maintenance problems. Technical risks also include ambiguous specification, incomplete specification, changing specification, technical uncertainty, and technical obsolescence. Most technical risks occur due to the development team’s insufficient knowledge about the project.
3. Poor planning
Poor planning, in terms of budget or budget allocation. Some projects are in my opinion under cost which adds the risk of serious budget blowouts or failing to meet financial targets.
4. Poor implementation
Poor implementation, even the best design needs to be well implemented, things like user feedback and acceptance, milestone reporting to identify problems at each milestone, and constant engagement between IT and the companies management.