Abstract

https://ssrn.com/abstract=2791627
 


 



Factor Reduction and Clustering for Operational Risk in Software Development


Faizul Azli Mohd-Rahim


University of Malaya (UM) - University of Malaya, Asia Europe Institute (AEI)

Chen Wang


University of Malaya (UM)

Halim Boussabaine


University of Liverpool

Hamzah Abdul-Rahman


International University of Malaya-Wales

Lincoln C Wood


Graduate School of Management; Curtin University - School of Information Systems

September 30, 2014

Journal of Operational Risk, Vol. 9, No. 3, 2014

Abstract:     
Software development failures frequently emerge as a result of the failure to understand and identify risks. The aim of this paper is to identify the most salient risk factors present during a software development project’s life cycle, in terms of their occurrence likelihood and impact on cost overrun. A questionnaire was sent to 2000 software development companies, IT consultancy and management companies and web development companies in the United Kingdom, United States, mainland Europe, Canada, Australia, India, China, Japan and other Asian countries, asking respondents to evaluate a number of risk factors. Because many factors were closely related, we applied a factor reduction and clustering process to the results to allow a smaller number of crucial risk factors to be identified. The three main clusters of risk factors we identified are feasibility studies, project team management and technology requirements. While a feasibility study may be unlikely to take place, it can have a significant impact on project outcomes. In contrast, project team management is likely to occur but has a relatively small impact on outcomes in comparison with technology requirements. Professionals will need to apply checks and balances to these factors and generate risk mitigation plans to reduce the severity of project failures. Our results allow them to connect the probability of risk factor occurrence and overall impact, so they can focus their limited resources on reducing the most pertinent risks in their projects.

Number of Pages in PDF File: 36

Keywords: Software Development, Risks


Date posted: June 9, 2016  

Suggested Citation

Mohd-Rahim, Faizul Azli and Wang, Chen and Boussabaine, Halim and Abdul-Rahman, Hamzah and Wood, Lincoln C, Factor Reduction and Clustering for Operational Risk in Software Development (September 30, 2014). Journal of Operational Risk, Vol. 9, No. 3, 2014. Available at SSRN: https://ssrn.com/abstract=2791627

Contact Information

Faizul Azli Mohd-Rahim (Contact Author)
University of Malaya (UM) - University of Malaya, Asia Europe Institute (AEI) ( email )
Kuala Lumpur 50603
0
Kuala Lumpur, Malaysia 50603
Malaysia
Chen Wang
University of Malaya (UM) ( email )
University of Malaya, Faculty of Economics & Admin
Kuala Lumpur, 50603
Halim Boussabaine
University of Liverpool ( email )
Liverpool, L69 7ZA
United Kingdom
Hamzah Abdul-Rahman
International University of Malaya-Wales ( email )
Ground Floor, Block A, City Campus
Jalan Tun Ismail, Kuala Lumpur 50408
Malaysia
Lincoln C Wood
Graduate School of Management ( email )
12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand
Curtin University - School of Information Systems ( email )
Australia
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