When software projects go wrong (and how to prevent it)
Software projects fail. Uber lost $440 million in 2016 when their driver payment system crashed. British Airways couldn't fly for two days in 2017 due to a software update gone wrong. But between these headlines are thousands of smaller projects that miss deadlines, exceed budgets or don't meet user needs.
The hidden costs of poor risk management
Take Brighthouse Financial's case from 2022. Their new policy management system was supposed to take 18 months and $50M. It took 3 years and $150M. Why? They didn't spot the risks early: complex data migration, changing regulations, and team turnover.
Companies often focus on technical risks while missing the bigger threats. When Target expanded to Canada, their inventory software worked perfectly - but wrong data input led to empty shelves and a $2B loss.
What actually works in risk management
Microsoft's Xbox team uses a simple method: they track three types of risks:
- Things they know will cause problems
- Things that might cause problems
- Things they don't know enough about yet
Each risk gets an owner and weekly check-ins. When they launched Xbox Game Pass, this helped them handle 10 million users without major issues.
Real solutions from real projects
Spotify doesn't just list risks - they test them. Before big releases, they run "chaos days" where they deliberately break parts of their system to see what happens. This found 66% of major risks before they affected users.
Amazon takes a different approach. Each team must write a "press release from the future" about what could go wrong with their project. This helps them spot problems early - it's how they caught potential privacy issues with Alexa before launch.
Making it work in your project
Start small. Pick your biggest worry about the project. Ask:
- What's the worst that could happen?
- What early warning signs should we watch for?
- Who needs to know if we spot these signs?
Netflix began this way. They started tracking just one risk: streaming quality. Now their risk management system handles 209 million users worldwide.
What to do when risks become reality
Even good plans sometimes fail. Square's payment system went down for 3 hours in 2019. But they had a backup plan: they kept users informed every 15 minutes and offered refunds to affected businesses. They kept most of their customers.
The key isn't avoiding all risks - that's impossible. It's spotting them early and having clear steps to handle them. Just like a good chess player thinks three moves ahead, good project teams plan for what might go wrong.
Your next software project will face risks. But with clear tracking, early testing, and honest communication, you can handle them before they handle you.