10 Software Development Risks and How to Mitigate Them

If you have worked on custom software projects, you have probably noticed that about 90% of the risks that threaten software delivery recur from project to project. Different teams, different industries, different tech stacks, yet the same problems keep recurring.

As a company that provides digital product development services, after 10+ years on the market and 200+ delivered projects, we have seen this firsthand and built a structured risk management approach to spot early warning signs before they turn into missed deadlines or budget overruns. This is how we consistently achieve a 99.89% acceptance rate and keep CPI and SPI variance below 10%.

In this article, we will cover:

• 10 most common risks in software development projects
• The consequences and threats these risks can cause if left unmanaged
• Practical, proven strategies to manage, mitigate, and even avoid risks that can derail your project’s success

What is considered a software development risk

Before we explore software development risks, we need to define what a risk is.

The Project Management Body of Knowledge (PMBOK), a globally recognized guide that our project managers use to plan, execute, monitor, and control projects consistently and effectively, describes a risk as:

An uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objective.

At Clockwise, we categorize software development risks into organizational and technical ones. Let's see what risks are included in each category and how we manage them.

Organizational risks in software development

By organizational risks, we mean challenges that come from how you organize and manage the software development workflow. As we worked on various projects across different teams and collaboration models (dedicated software development team, outstaffing, etc.), we often faced the following risks.

1. Requirements management risks

Requirements are the backbone of any software development project. They define what needs to be built, guide design and development decisions, shape testing, and influence long-term maintenance. When requirements are unclear or poorly structured, risks multiply quickly.

Here in the table, you can see the most common requirements-related risks we have seen in our projects and the consequences they can cause:

How we deal with requirements-related risks

To manage these risks effectively, we document requirements in an app requirements document. It helps us:

• turn raw ideas into clear, unambiguous, and traceable requirements
• creates a shared understanding between stakeholders and the team
• reduces assumptions
• provides a solid framework for managing change without losing control over scope, priorities, or timelines

At Clockwise, we create an app requirements document during the project discovery phase. This is the pre-development stage where we research the problem space, align on business goals, and collect all required documentation.

By investing in a well-prepared app requirements document early on, we ensure that requirements align with business needs, follow a clear structure, and describe each goal in enough detail to support predictable development. This approach helps our clients avoid $30,000+ additional spending on mid-project pivots and keep CPI/SPI variance below 10%.

2. Timeline, scope, and budget risks

According to the triple constraint theory introduced by the Project Management Institute, every software project is shaped by three tightly connected factors:

• scope
• cost
• timeline

When one of them changes, the other two are affected as well.

In practice, this means limited timelines often force teams to reduce scope, while budget restrictions can slow development and push delivery dates further out. Ignoring this relationship leads to missed deadlines, rushed releases, or products that fail to meet business goals.

That is why we take a deliberate approach to balancing timeline, budget, and scope, enabling informed trade-offs instead of reactive fixes. Here’s how to manage these risks and keep development moving in the right direction.

Scope risks

As our experience shows, defining the scope is hard because most product owners start with a full vision. A long feature list, lots of “nice-to-haves,” and a mental picture of the final product. The problem is that development needs something more concrete than a vision: a clear, agreed set of features with boundaries, priorities, and acceptance criteria.

Common scope risks look like this:

• New features appear mid-planning (or mid-build) and quietly expand the workload.
• Requirements stay vague, so the software development team fills in gaps with assumptions.
• Priorities are unclear, so effort is directed to the wrong features first.
• The scope becomes unrealistic for the timeline and budget.

Remember the discovery phase we mentioned earlier? That's where we reduce these risks as well - by turning "what you want" into “what we will build first,” with documentation that the development team can actually execute:

• We clarify and structure the scope early. Before full discovery, we run scope-clarification calls and translate your inputs into a rough work breakdown structure (WBS), along with initial assumptions and ballpark estimates.
• We define feature specs in detail. During discovery, a BA goes feature by feature to document behavior, logic, and data, then validates the specifications with stakeholders to ensure nothing important is left to interpretation.
• We convert scope into development-ready artifacts. You get user stories and acceptance criteria, data dictionaries or data flow diagrams, and a refined WBS, so the scope is measurable and testable.
• We keep the scope realistic with prioritization. If you want to start with an MVP, we review the WBS together, define the must-haves for launch, and adjust the plan to meet constraints.

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Timeline risks

Timeline risks usually come from uncertainty. If the scope is unclear, dependencies are unknown, or integration complexity is underestimated, delivery dates become indistinct as well.

Typical time risks include:

• Complex logic or integrations surface late, creating delays.
• Miscommunication slows decisions and causes rework.
• Resource planning is off, so work queues up and bottlenecks appear.
• Estimates are based on assumptions rather than verified requirements.

During discovery, we focus on replacing speculation with a plan that holds up in real execution:

• We break work into estimable chunks. The WBS maps the product into modules and features, which makes effort and sequencing visible.
• We reduce ambiguity upfront. Clear requirements and early validation reduce “wait, what did we mean here?” moments that usually cost weeks later.
• We create a development plan and timeline. Discovery deliverables include a development plan and timeline tied directly to the defined scope and validated requirements.

Budget risks

Budget overruns rarely come from one big mistake. As usual, they come from many small ones: unclear scope, underestimated complexity, rework, and late surprises.

Common cost risks include:

• Budget gets allocated without a concrete breakdown of work.
• Stakeholders do not see cost impact until changes are already “in motion.”
• Expenses are not tracked against scope, so overruns feel sudden.
• Low flexibility forces teams to either overspend or cut quality.

This is how discovery helps keep budget decisions grounded and transparent:

• We produce estimates based on real specs. After scope clarification and full discovery, we create a project estimate tied to the WBS and detailed requirements.
• We make cost trade-offs visible. When our clients adjust the scope (for example, shifting to an MVP), we revisit estimates for the new scope and suggest ways to match the budget.
• We reduce expensive rework. Clear specs, design assets, and a defined tech approach prevent “rebuild it later” costs that happen when the team starts coding too early.

Case study example: Project with strict limits but ambitious vision

Let’s now take a look at how we managed scope, timeline, and budget risks for Creador, a marketplace for photo and video makers. The client came to us with an ambitious vision, but limited time and clear budget boundaries. Our goal was to turn a broad idea into a plan that the team could execute without constant rework or budget overruns.

Scope. We began with discovery and scope clarification. Together with the client, we broke down the full vision into a structured WBS and defined the scope of the first release.

Timeline. With the scope validated, we translated it into a concrete development plan. By splitting the product into estimable modules, we exposed dependencies early and set milestones based on verified requirements rather than assumptions. This made delivery dates predictable and achievable.

Budget. Once the scope and timeline were aligned, we prepared estimates tied directly to the WBS and detailed feature specifications. When priorities shifted, the cost impact was immediately clear, allowing our client to make informed trade-offs rather than face surprise overruns.

By anchoring decisions in discovery outputs and early validation, we reduced the initial estimate from 1,200 hours to a focused 400-hour scope, keeping cost, timeline, and scope in balance.

CASE STUDY

A marketplace for photo & video makers

Find out what we delivered after reducing the project time from 1,200 hours to 400 hours

3. Risks associated with external teams

In some cases, we have to collaborate with our clients’ teams or engage external specialists. This occurs when the project requires highly specialized expertise (like, for example, a highly-specific framework for an AI product), such as in data engineering or niche frameworks.

From our experience, the main risks appear when external contributors are treated as detached executors rather than accountable partners. The most common issues we see include:

How to make a collaboration with external partners reliable & effective

When we work with external expertise ourselves, we follow the following rules:

• Working with any software development company strictly on a contract basis. Every engagement is governed by a detailed contract that defines scope, deliverables, timelines, responsibilities, communication rules, and acceptance criteria. This creates shared expectations and gives both sides a clear framework for decision-making.
• Accountability is built into the agreement. Contracts include service levels and responsibility boundaries. If obligations are not met, predefined consequences apply. This protects us from delays and half-finished work and keeps delivery predictable.
• NDA is mandatory. We always sign a non-disclosure agreement before accessing any sensitive information. This is the most effective way to protect intellectual property, business logic, and user data when working with third parties.
• Deep onboarding into the product context. We always introduce external specialists to the product lifecycle, architecture, and business goals. This ensures they contribute as problem-solvers, not just task executors.

4. Risks associated with stakeholders’ involvement and project control

Stakeholders are people directly interested in the project’s positive outcome. In our projects, stakeholders are represented by a product owner and product leaders who participate directly in discussions and decision-making.

Problems start when involvement is either too low or poorly organized. Here are the risks associated with stakeholders’ involvement and project control:

How do we manage stakeholders' involvement

To manage stakeholder involvement, we rely on a RACI matrix. This document helps us clearly define and communicate roles and responsibilities for each task throughout the project. The matrix includes 4 roles:

• Responsible. The person or team that executes the task.
• Accountable. The person or group accountable for the final result and key decisions.
• Consulted. Stakeholders whose expertise or opinion is required before decisions are made.
• Informed. Stakeholders who need visibility into progress but are not directly involved in execution.

Here is an illustration of how a typical RACI matrix can look in a software development project:

This approach makes decision ownership explicit, reduces unauthorized changes, and minimizes rework.

In our experience, involving stakeholders from the outset is essential, but we also avoid excessive meetings. Daily involvement is rarely necessary. Regular weekly or biweekly check-ins are sufficient to align on the vision, review progress, and adjust priorities without slowing the team.

5. Project disruption risks

Large organizational changes can significantly affect the software development process. Many of these factors are difficult to predict or control in advance, yet they can have a decisive impact on a project’s outcome.

On our projects, we’ve faced several such risks that had a major influence on the outcome:

How to reduce the project disruption impact

As mentioned earlier, most of these risks can’t be fully predicted or controlled. Any of them may lead to a project being paused or canceled. But consistent communication between stakeholders and the development team, realistic planning, and a flexible project management approach can help mitigate the impact of project disruptions.

Case study example: How we handled shifting priorities

When we worked on Lilypad, a location-based chat app, we had to address reassessed goals driven by market assumptions, which led to multiple changes in feature scope and functional requirements.

To reduce disruption, we applied a flexible project management approach:

• Regularly reviewed priorities with the client
• Adjusted the backlog
• Reallocated effort to focus on the most valuable features

Requirements were treated as adjustable rather than fixed, allowing the team to respond quickly without compromising delivery quality.

As a result, the client successfully launched the product. Over 1,300 users downloaded the app within the first few months.

CASE STUDY

Lilypad: A location-based chatting app

See how we dealt with shifting priorities and helped Lilypad succeed

Technical risks in software development

Technical risks are challenges that can arise during development due to technical factors. In this group, we highlight risks related to technical aspects, third-party integrations, UI/UX design, and security.

6. Technical and architectural risks

In our experience, most critical technical risks arise from architecture, the tech stack, and technical decisions. If you overlook these areas early, the cost of fixing mistakes grows quickly.

We most often see the following technical and architectural risks:

How to reduce architectural and technology risks

In most cases, responsibility for architectural and technology decisions sits with a technical leader on your side. This can be a CTO, a senior developer, or a product owner with a strong technical background. Their role is to ensure that architecture and technologies align with your product vision, business goals, and growth plans.

At Clockwise, we reduce technical risks by reviewing and shaping the app’s architecture, validating the technology stack, and identifying weaknesses before they become costly problems. Depending on the project’s needs, our clients receive input from experienced backend and frontend engineers, architects, QA specialists, and product experts who regularly build similar systems.

7. Third-party integration risks

We have built and launched products with 100+ third-party integrations, including payment systems, analytics platforms, social networks, marketing tools, and other external services.

Here are the most common integration risks we have faced:

How do we reduce third-party integration risks

Each third-party integration presents its own technical and product challenges. We never assume that an API will work exactly as described or cover all real use cases.

Our team starts by reviewing documentation with a critical eye and validating key scenarios before full development begins. When needed, we communicate directly with third-party support teams to clarify limitations and edge cases. Most importantly, we test integration ideas early during discovery.

Such an approach will help keep development predictable.

Case study example: How we handled third-party integrations in an SMM platform

A social media marketing agency owner came to us because their team relied on several disconnected tools with limited functionality. Switching between platforms slowed their daily work and complicated internal processes. They wanted a single, custom software solution to bring everything together.

To solve this problem, we built a unified platform with integrations for Instagram, Facebook, Twitter, and LinkedIn. The marketing team could schedule and publish posts from a single interface, design visuals using built-in Canva support, and manage content approvals without leaving the system.

We reduced integration risks early by researching each social media API during the discovery phase. Our team analyzed documentation for specific scenarios that the product needed to support. After that, we built several small proof-of-concept integrations to validate them.

These early checks confirmed feasibility and helped us choose the right technical approach. As a result, we met tight deadlines, delivered an MVP quickly, and avoided extra time spent on fixing integration issues later.

CASE STUDY

An SMM tool with a number of third-party integrations

Read the case study to find out how we helped our client to painlessly integrate the platform with popular third-party services

8. Software security risks

For each of the 200+ software projects in our portfolio, we had to build a reliable security system.

Here are the risks we run into most often in our projects:

The practical security foundation we implement

While developing highly secure software is complex and costly, there are three basic security goals that must be met. These are

• Confidentiality
• Integrity
• Availability

Together, they are known as the CIA triad.

We begin security actions at the pre-requirements stage of the software development lifecycle (SDLC) to establish a foundation for all subsequent activities, from requirements gathering through testing and maintenance.

We also treat security as a quality attribute. That means we define acceptance criteria and keep checks running throughout development.

Continuous monitoring and evaluation help us catch issues sooner, respond faster, and release a safer product.

Case study example #1: Reducing the risk of personal data leaks

On our projects, we often manage security constraints that require balancing strength and cost. When we worked with BackupLABS, a platform that enables users to back up data from services such as GitHub, GitLab, and Trello, we had to research reliable, cost-effective methods to protect sensitive data.

Because the platform centers on user data, we focused on encryption from the start. We implemented end-to-end encryption using the AWS S3 Encryption Client and leveraged AWS KMS to encrypt keys across services. All encrypted client data is stored on Amazon servers, so even the development team doesn’t have access to it.

CASE STUDY

A platform for backing up data

Check how we helped BackUpLab launch a cloud backup SaaS platform in just 4 months

Case study example #2: When security is top priority

Some projects require even more attention at the planning stage. During the discovery phase for a cost estimation platform, we engaged a security consultant because the client prioritized security. We delivered clear, proven recommendations to reduce the chance of leaks and breaches. We used OWASP guidance and CIS Benchmarks to shape requirements and controls, and to keep the security plan practical and testable.

CASE STUDY

Security as top priority

Learn how we implemented the best security practices while conducting project discovery for a cost estimation platform

9. Underestimating QA

As we deliver projects with a 90–95% bug-fix rate, we understand the importance of QA and the risks it entails. When teams underestimate QA, issues rarely stay small. They compound, slow you down, and affect your product’s credibility.

Below are the most common risks we see when QA receives insufficient attention.

How to organize QA to reduce risks

Building the software testing process the right way helps you avoid the risks linked to poor product performance. From our experience, the most effective approach is to integrate testing practices into every stage of development.

When QA starts alongside development, you identify issues as soon as they appear:

• Requirements get validated early.
• Architecture decisions face real test scenarios.
• Developers receive fast feedback and fix problems while the context is still fresh.

This approach consistently improves quality and keeps timelines predictable across projects we deliver. You shouldn’t treat testing as a separate, pre-launch phase. It should be integrated into the development routine.

10. UI/UX design risks

During the development process, we see a lot of risks associated with UI/UX design elaboration:

How to reduce UI/UX design risks early

From our experience, most UI/UX design risks become manageable when you address them during the discovery phase. This is where we help you think ahead and set clear boundaries before design work accelerates.

At this stage, we:

• Plan for change. We design with future updates in mind so the interface can evolve without forcing redesigns.

• Account for complex design. We identify components that may require extra effort and reflect this in scope, timelines, and estimates.

• Avoid performance-heavy visuals. We choose design solutions that look clean and work fast, without overloading the interface.

• Turn research into clear requirements. We research design options, validate assumptions, and document decisions in a structured set of requirements that is understandable to everyone.

In our projects, we always recommend keeping the initial design simple. We see the best results when design evolves together with functionality, not ahead of it. This approach helps you allocate resources wisely.

Our best design practices

Over the years, we’ve refined a set of design practices that help us deliver predictable results, avoid rework, and keep design aligned with both user needs and technical realities:

• Tie design decisions to clear goals. Start by identifying the business objective, such as improving conversion, retention, or growth. Evaluate every design choice against its ability to support that goal.
• Design around real users. Base decisions on user needs, behaviors, and pain points. Use research, feedback, and testing to validate assumptions before moving forward.
• Create responsive and accessible layouts. Design for multiple devices, screen sizes, and accessibility needs. Ensure the experience remains consistent, usable, and inclusive for all users.
• Build with scalability in mind. Structure layouts and components so new features or technical changes can be added without requiring major redesigns.
• Deliver developer-ready assets. Prepare clear design files, specifications, and documentation. Make it easy for developers to implement designs accurately and efficiently.

How to manage risks in software development

We reviewed 2 major risk categories and explained how we handle them based on our hands-on experience. We now explain how we conduct risk management in software engineering across the full range of risks across our projects.

We document risks in a risk register. In simple terms, the risk register is a table that lists risks, including their names, status, probability, mitigation plans, and other key attributes. It helps identify potential risks early, plan to avoid them, and reduce their impact if they occur. The project manager owns the risk register and creates it during the discovery phase.

Here is what a typical risk register looks like in our projects:

At Clockwise, we manage risks through the following steps.

1. Planning risk management. We align with stakeholders and team members on the risk management process and schedule related activities. The risk management plan defines risk sources and categories, impact and probability metrics, and the overall mitigation approach.

2. Identifying and categorizing risks. This step focuses on identifying risks that may affect project delivery and recording them in the risk register. We typically uncover risks through stakeholder discussions, collaboration with the development team, brainstorming sessions, analysis of historical data, SWOT analysis, risk checklists, and similar methods.

3. Analyzing risks. Next, we assess and prioritize the identified risks. We assign a numerical value to each risk to reflect its severity. Quantitative risk analysis includes the following elements:

   Impact (h). The potential severity of the risk is measured in hours of possible loss or rework.

   Probability (%). The likelihood that the risk will occur, expressed as a percentage.

   Exposure (h). The expected loss resulting from the risk is calculated using the formula below.

   Exposure (h) = Impact (h) x Probability (%)

   Mitigation (h). The estimated number of hours required to reduce or control the risk.

   Risk assessment combines vulnerability analysis with an evaluation of potential impact to determine the overall risk level.

4. Planning risk response. We define actions needed to reduce or manage negative effects on the project. Here are the common strategies we choose from:

• Elimination. We use this option when we can eliminate the risk quickly without additional resources.

• Transfer. We used this approach to meet a client’s requirement for stronger protection against hacking.

• Mitigation. When elimination is not feasible, we develop a mitigation plan to limit the impact.

• Acceptance. Acknowledge the risk and prepare to handle its consequences. We use this strategy when mitigation would require disproportionate time or resources.

  We apply mitigation to most risks. In some cases, a single risk may require a combination of strategies.

  After selecting a strategy, we create a detailed implementation plan with defined tasks, owners, timelines, budget considerations, and supporting details.

5. Monitoring and controlling risks. During project development, we continuously monitor and control them. This includes tracking trigger events, activating response plans when needed, and reviewing whether the chosen strategies remain effective. We monitor and report all risk-related activities as part of an ongoing risk management process.

Summary

With this guide on risk management in software development, you are already better prepared than many teams that address risks only after problems appear. This puts you in a strong position to protect your project and make more confident decisions throughout development:

• Recognize risk management as a core part of software delivery, not a one-time activity.
• Identify technical and organizational risks early in the project lifecycle.
• Analyze potential impact and define response strategies before risks escalate.
• Apply risk management practices from planning through the entire SDLC.
• Continuously monitor existing and emerging risks as the project evolves.
• Maintain a structured risk register to keep visibility and accountability.

We manage software development risks every day. Our team works with well-established processes and is ready to take ownership of your project. We will help you identify, reduce, and manage potential risks in a structured and transparent way to ensure stable delivery and alignment with business goals.