Understanding software project risk – a cluster analysis (Wallace et al., 2004)


Wallace, Linda; Keil, Mark; Rai, Arun: Understanding software project risk – a cluster analysis; in: Information & Management, Vol. 42 (2004), pp. 115–125.

Wallace et al. conducted a survey among 507 software project managers worldwide.  They tested a vast set of risks and tried to group these risks into 3 clusters of projects: high, medium, and low risk projects. 

The authors assumed 6 dimensions of software project risks –

  1. Team risk – turnover of staff, ramp-up time; lack of knowledge, cooperation, and motivation
  2. Organisational environment risk – politics, stability of organisation, management support
  3. Requirement risk – changes in requirements, incorrect and unclear requirements, and ambiguity
  4. Planning and control risk – unrealistic budgets, schedules; lack of visible milestones
  5. User risk – lack of user involvement, resistance by users
  6. Complexity risk – new technology, automating complex processes, tight coupling

Wallace et al. showed two interesting findings.  Firstly, the overall project risk is directly correlated to the project performance – the higher the risk the lower the performance!  Secondly, they found that even low risk projects have a high complexity risk.

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