How Software Project Risk Affects Project Performance: An Investigation of the Dimensions of Risk and an Exploratory Model*

TLDR

Software project risk research lacks validated measurement tools and theoretical explanations linking risk dimensions to performance. The study aims to provide better tools for assessing and managing software project risk to reduce high failure rates. Six risk dimensions were identified, reliable measures developed, and an exploratory sociotechnical model linking them to performance was tested. Results show that social subsystem risk drives technical risk, which drives project management risk, ultimately affecting project performance.

Abstract

ABSTRACT To reduce the high failure rate of software projects, managers need better tools to assess and manage software project risk. In order to create such tools, however, information systems researchers must first develop a better understanding of the dimensions of software project risk and how they can affect project performance. Progress in this area has been hindered by: (1) a lack of validated instruments for measuring software project risk that tap into the dimensions of risk that are seen as important by software project managers, and (2) a lack of theory to explain the linkages between various dimensions of software project risk and project performance. In this study, six dimensions of software project risk were identified and reliable and valid measures were developed for each. Guided by sociotechnical systems theory, an exploratory model was developed and tested. The results show that social subsystem risk influences technical subsystem risk, which, in turn, influences the level of project management risk, and ultimately, project performance. The implications of these findings for research and practice are discussed.