Analyzing Software Risks and Risk Management Dimensions for Improving Firm Performance in SE IT Organizations

Abstract

Though the risk management concept is as old as management concept, but has been neglected until recently it gained the importance in the light of financial crisis and global recession. But, the existing business literature on risk management majorly focuses on small organizations skewed towards financial organizations.  SEs too face many risks and to be managed so that they are survived and contribute to the development of economy. Financial risk, operational risk, internal risks, external risks to name a few. So, the aim of this research was to explore the current state of risk management in Pune district, Maharashtra, India, and to identify the most significant parameters of risk management of an SE IT Project Organization.  A questionnaire was developed to assess the SEs whether they have identified their risks and if so, how they are managing their risks were collated. Second part of the questionnaire addresses the influence of risk management on organizational performance.  The study enables in understanding on the various dimensions of risk management, which acts as predominant source of literature for body of knowledge. The parameters that constitute RM in SEs were empirically tested. Further the influence of these RM dimensions was tested on firm performance. The finds out the most significant RM dimensions and the most influenced factors of firm performance i.e non-financial firm performance. The results of the study were culminated into a structured RM assessment model for SE sector, which will contribute in reducing the number of SE failures and thereby to the economy as a whole. Software risks are uncertain events  in the process  of  software project management  and development, and may bring harm or loss to the project plans and system quality. Project managers must identify the risk, analyze them and take action to manage the risks. This paper introduces the concepts of software risk, risk analysis and risk management. It discusses the processing methods of software risks and the means of estimating and managing risks. It mainly analyses the relationship of software risks and development process models. Risk management activities involve several important steps, including identification of the risks, analyzing them, and assigning priorities. Researching on software risk analysis and management has a great role for software production and software engineering.