P1: IML/FFX P2: IML/FFX QC: IML/FFX T1: IML
Management WL040/Bidgoli-Vol III-Ch-19 June 23, 2003 16:22 Char Count= 0
INTERNET-BASEDPROJECTRISKS 231Outsourced Development
Many of the problems that accompany outsourced devel-
opment have already been addressed in traditional soft-
ware project risk management (Schmidt et al., 2001).
When the primary means of coordination and workflow
management is through the Internet, however, a special
burden is placed on the outsourcing firm to keep track
of the contractor. Much as the users lose touch with the
project, management is less likely to attend to project
oversight—out of sight, out of mind. The first hint of prob-
lems with the project will inevitably have to come from the
project manager, who might be reluctant to communicate
these problems without the specific approval of contrac-
tor management.
The only alternative to this scenario is for client man-
agement to receive training in the use of the project sup-
port software and to use the software on a regular basis
to track project activity. This should lead to a “shadow”
project manager within the client organization. This alter-
native introduces more complications, such as the irritant
of “being watched” and the possibility of conflict between
the contract project manager and the overseer.User Interface
The user interface of any software is one of the most
important design considerations. Because of the special
needs of Internet-based project management, practically
all software supporting the project comes from vendors
not associated with the users or the developers. Thus,
the user interface of the project support software is not
specifically designed for their purposes. Practically all
firms offering such software, including iVenturi, Agile,
Oracle, and SAP, are designing “one size fits all” prod-
ucts (Gilbert, 2000). With a widening user base, including
the client users, client management, project manager, and
project team members, the special needs of each type of
user are less likely to be met in the user interface. This
could lead to confusion, frustration, and less than perfect
communication.Security
Considering the vehicle for communication, geographic
dispersion, and affiliation of stakeholders, Internet-based
projects are especially vulnerable to security problems.
Every use of coordination software exposes sensitive
project data to compromise. Although high-level encryp-
tion is supported by modern Web browsers, not all project
management software and groupware support such data
protection. E-mail is also often sent unencrypted, so that
routine communications among team members or be-
tween the team and users might not receive any protection
at all.
With geographic dispersion of team members, the
number of locations where sensitive data is stored is
much greater than with traditional projects. Paper files,
computer files, diagrams, audio and video recordings,
software simulations and prototypes, screen images, and
so forth are likely to be generated to facilitate com-
munication among developers and between the devel-
opers and users. With the additional storage locations,
the job of managing security of project data becomes
complicated.If the project is outsourced, the project participants
belong to different organizations. The affiliation of those
holding project data can get in the way of effective secu-
rity management, from the standpoint of both physical
surveillance and the enforcement of security policies. At-
tention to security issues can vary significantly from one
organization to the next, so client management and the
project manager might not agree on proper procedures
and policies.Sources of Risk
As a first step in formulating strategies to deal with risks,
it is important to understand the sources of risk (Schmidt
et al., 2001). There are two reasons for this. First, by rec-
ognizing the source of a risk, the project manager can
take action directed at the source to improve the chance
of a positive outcome, much as a doctor treats an infec-
tion rather than the fever that is a symptom of the infec-
tion. Second, some risk sources are perceived by man-
agers to be beyond their control, which leads them to
inactive management of the associated risks. By under-
standing the sources, project managers can take special
care to attend to risks they might otherwise overlook.Users
One factor that can plague Internet-based projects is lack
of trust on the part of the users. Because the development
team has only a virtual presence, users never develop the
kind of relationship and the level of trust that is achiev-
able when the team and the users are located together.
The physical separation of users from the team also con-
tributes to inadequate user involvement, historically one
of the more serious risks to project success (Barki, Rivard,
& Talbot, 1993; Schmidt et al., 2001). Because users do
not have convenient access to the assembled team, roles
and responsibilities can become muddled, leading to a fur-
ther decline in user involvement. This is the phenomenon
called “the detached user.” There is also a strong possi-
bility that users will develop expectations that are not in
line with the expectations of the project team. Delivering
software that does not match user expectations is another
frequent cause of project failure (Schmidt et al., 2001).General Management
The same lack of trust that can arise among users can
also be found in general management. Poor professional
relationships can lead to poor coordination of project ac-
tivities or disinterest in the success of the project (Ash,
1998). The geographic and temporal separation of project
team, users, and management also makes it difficult to
maintain control over project dependencies with any ex-
ternal agents involved in the project.
As sponsor of the project, general management plays
a special role in project success. The most important risk
factor in software development projects is top manage-
ment commitment to the project (Keil et al., 1998). If gen-
eral management staff members lose focus of their stake
in the project, their commitment becomes questionable.Environment
Because project participants are not meeting face-to-face
as in traditional projects, cues that might reveal to them