This exponential growth of the IT industry is attributed to digital transformations, growing demand for IT infrastructure to support remote workers, and greater dependency on tech products and services, and other significant trends.

However, they are not just centered around tools or technologies. Instead,

These trends are far-reaching and encompass work culture, skill requirements, project management approaches, and more.

Hence, it is imperative for IT firms to adopt these trends to stay competitive and sustainable in the hyper-competitive business environment.

This blog elaborates on all the latest trends that have the potential to shape the future of the IT industry business landscape.

But before that, let’s first dive deep into the history and understand what this industry looked like until a decade ago.

A brief glance at the IT business landscape before the 2020s

The IT industry has undergone significant evolution since its inception in the mid-20th century. Key developments include the creation of the first electronic computers, the advent of the internet, the rise of personal computing, mobile devices, and the emergence of cloud computing that minimized the need for high on-site storage costs.

Today, the industry continues to transform rapidly, with emerging technologies such as AI, blockchain, quantum computing, and 5G technology poised to shape the future of computing and communication.

The onsite and offshore model in the IT industry gained prominence in the beginning of 1990. As a result of globalization, the organizations wanted to cut down their software development cost significantly to stay competitive. Over time, the companies have started using a mix of onshore and offshore resources to balance cost, quality, and delivery time. Moreover, as more IT firms are aligned to make their products environmentally sustainable, investment in green technology is also gaining momentum.

Furthermore, project management methodologies in the IT sector is another vital aspect that evolved to meet the changing needs of the industry. Initially, IT projects were managed using the traditional Waterfall model, which focused on detailed planning and sequential execution.

However, as IT projects became more complex and dynamic, Agile methodologies (Scrum, Kanban & Lean) emerged in the early 2000s to make project management more efficient. More recently, many companies are adopting a hybrid approach that combines multiple methodologies in a single project to improve their operations and customer experiences.

The tech industry is also marked by fierce competition among companies, particularly among the dominant players in the software, hardware, and internet services sectors. Therefore, it has become essential for firms to remodel their businesses and align with the changing times.

So, the following are the latest trends that every IT organization must integrate.

IT industry trends to look for in 2023 and beyond

Bill Gates rightly observes, “Investing in tomorrow’s technology today is more critical than ever.”

The growth of an IT firm can’t be imagined without investing in the future. So, one can adopt the following prominent trends to keep up with the changing market scenario.

Emergence of advanced tools and technologies

Information Technology was conventionally limited to basic hardware/software installation, resolving computer issues, and fixing bugs. However, several emerging advanced tools and technologies, like AI, ML, IoT, etc., are redefining the IT industry. For instance, robotic process automation helps build, deploy, and manage software robots that automate manual actions and human-like interactions. One application of RPA in the IT industry is automation testing, which replaces time-consuming and laborious manual testing.

Another use is AI for IT operations (or AIOps). AIOps uses Machine Learning and Big Data to automate data processing and decision-making with the help of both historical and online data. This increased adoption of the latest tech trends has also helped businesses lower operational costs, improve the customer experience, and increase revenues. It has further helped the IT industry scale up and change for better efficiency and productivity.

Prominence of integrated project management

The complexity of IT projects has increased over time, making it necessary to improve their management. One of the best trends in this direction that has emerged popular of late is Integrated Project Management (IPM). It is the combination of traditional and agile methodologies for a project. So, project managers are leveraging this hybrid approach for better performance and profitability.

For example, let’s consider an IT project of creating software and its infrastructure. Here, the manager can use the traditional Waterfall approach for high-level deadlines, milestones, or standard phases, like procurement, vendor management, and installation. They can then use the Agile cycle to execute the actual software development using sprints, that are time-boxed periods for completing a set amount of work. Hence, IPM is a vital approach that aims to deliver projects on time, within budget, and to the required quality standards.

Preference for remote/hybrid work model

Most IT firms formerly favored an in-office work culture due to several reasons. First, there were no robust cybersecurity measures to protect the data against breaches, spyware, or malware attacks, when moved outside the premises. Second, companies believed that remote/hybrid work would cause a loss in productivity and efficiency. However, the onset of the pandemic forced most businesses to adopt a remote/hybrid work model, but it didn’t hamper productivity, as speculated earlier.

Moreover, this model is welcomed by IT employees, especially millennials and the GenZ, as it provides a better work-life balance, and increases their engagement at work. It also helps firms save infrastructure, maintenance, and utility costs. Further, organizations now realize they can move the data outside the organization with improved cybersecurity measures. Therefore, it is clear that the trend towards more flexible work arrangements is here to stay.

Increased focus on data analytics for informed decisions

Clive Humbey, a British mathematician and a data science entrepreneur, rightly says, “Data is the new oil. It’s valuable, but if unrefined, it cannot really be used”.

The IT industry works on large amounts of historical and real-time information.

To analyze and convert the data into valuable insights, companies are using several prominent approaches, including business intelligence, n-memory analytics, data/text mining, etc.

Through these analytics, businesses can now collect and analyze customer behavior, predict market trends, and make informed decisions to minimize costs, optimize processes, and enhance organizational efficiency. Thus, it is clear that the importance of data analytics will continue to grow in the years to come.

Growing emphasis on Diversity, Equity, and Inclusion (D, E, &I)

McKinsey reveals that 33% of firms with ethnical and racial diversity are likely to outperform their peers on profitability.

IT firms were formerly confined within domestic limits and preferred hiring people from their location. However, as businesses expanded globally, companies hired talent beyond domestic boundaries to lower project costs and enhance profitability. Thus, to make everyone feel welcomed and valued irrespective of their nationality, gender, ethnicity, creed, etc., companies are now focusing on creating an indiscriminative work culture.

For instance, global tech giants like Google, IBM, etc., publish annual diversity reports to foster transparency and trust among employees and stakeholders. Besides, employers are open to hiring competent differently-abled people for remote job positions to foster an all-inclusive, collaborative, and high-performing culture. Furthermore, IT companies are taking steps to ensure parity of incomes between males and females for similar positions. All these measures help foster inclusion, reduce stress, increase engagement, promote collaboration, and enhance efficiency and productivity.

Adoption of robust cybersecurity measures

As most IT businesses are shifting online, their vulnerability to security threats, like phishing, zero-day attack, ransomware, etc., has increased. However, IT firms are now implementing a multi-layered approach that combines technologies, processes, and policies. It includes firewalls, antivirus software, data encryption, etc., to safeguard businesses against cybercrimes and prevent financial losses. This is why the worldwide cybersecurity market has seen a massive surge in its revenue.

Research reveals:

“The global cybersecurity market is expected to hit $352.25 billion by 2026”.

One of the most prevalent cybersecurity technologies today is edge computing. Besides enabling processing at higher speeds and volumes, it also protects data that transports out of centralized systems through several devices. It aims to protect users and sensitive data at the “edge” of a company’s network. Another innovation in this direction is biometric sensors. They allow access to sensitive information only after collecting and verifying biological signals from a human. This way, they minimize the chances of unauthorized access to sensitive data and keep it safe.

Rise in the significance of soft skills

Earlier, firms prioritized technical skills while hiring engineers and IT consultants. However, firms now have also realized the importance of soft skills like leadership, collaboration, integrity, delegation, negotiation, etc., in the modern workforce. So, companies have now revamped their hiring strategy to evaluate the candidates’ soft skills through behavioral assessment tests or interview questions.

One of the most sought-after soft skills these days is emotional intelligence.

Emotional intelligence is the ability to perceive, evaluate, and leverage emotions to communicate, collaborate and build relationships more effectively.

Besides hiring people with soft skills from outside the organization, IT firms are sponsoring training and certification programs to train their workforce for the same. Further, as AI and automation will significantly impact the IT industry, soft skills are seen as a key differentiator for human workforce.

Now that you have understood the prominent trends, let’s understand how advanced resource management software can help incorporate them.

How can a resource management tool help adopt IT trends effectively in a firm?

Every IT organization depends on three pillars- “People, processes, and technologies” for success. At the same time, it is crucial to adopt the trends that can transform all these three aspects. A resource management tool is the key to embracing the latest IT trends in the following ways.

Here’s how –

• The enterprise-wide resource visibility helps the firm stay abreast of the existing workforce’s skills and competencies. It also helps update a consultant’s profile easily when they learn a new skill or acquire a relevant certificate. This real-time competency tracking helps cater to evolving demands and implement the latest trends. For instance, if a company got a project to work on a new technology trend like cloud computing, the ERM tool can help identify and allocate the required personnel, hardware, and software to this project.
• Next, the project vacancy report helps assess the pipeline projects’ requirements and identify whether they are one-time or recurring. It also enables the identification of trending skills in the marketplace. Accordingly, the manager can hire either a permanent or contingent workforce or create the right mix of both to complete projects successfully while ensuring high profit margins.
• The capacity-vs-demand report helps evaluate the skill gaps to be filled. Further, using the training scheduling solution, managers can frame an efficient training/upskilling program to help IT professionals acquire highly demanded skills. It can also sponsor certification programs and courses for employees and encourage them to attend IT seminars and conferences to be aware of the latest trends and technologies.
• Business Intelligence Reports, including resource utilization, availability, and forecast-vs-actual time/financial, help track respective critical performance metrics and keep them at optimal levels. These insights also facilitate the in-depth analysis of the available data to make informed decisions.

Thus, by using a robust resource management tool, a firm can ensure that it has the resources to integrate the latest IT trends effectively.

Conclusion

Marc Benioff, the Salesforce co-founder, rightly says, “The only constant in the technology industry is change.”

Therefore, every IT company must be well-prepared to stay on top of the latest trends and keep their business sustainable and profitable. By adopting the above-listed trends with the help of a resource management solution, you can unleash the maximum potential of your IT workforce.

So, what’s your approach to implementing the latest trends in your firm?

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has highly customizable products for project portfolio management, professional service automation, and workforce planning software based on business requirements.

These resignations in the tech sector can be attributed to numerous factors such as low compensation, limited career advancement options, less opportunity to go abroad for onsite projects, higher burnout rates, etc. Moreover, reluctance to resume work from offices has aggravated it further.

Today, employees prioritize company culture, leadership, career development, quality of life, and work environment more than just reasonable compensation.

It suggests that if firms do not cater to these evolving employees’ needs appropriately, they can lose their top talent, thereby affecting the firm’s profitability and sustainability.

This blog elucidates the causes of unplanned attrition in the IT industry, discusses effective ways to retain them, and how resource management software can help.

Let’s get started:

What causes high unplanned attrition in the IT industry?

The IT industry is currently plagued by a phenomenon known as the Brain Drain, where highly-skilled employees are leaving at high rates due to funding crunch, rising inflation, layoffs, etc. This has led employees to seek a more flexible work environment with better work-life balance, job security, and growth opportunities.

Additionally, the rapid digitization of industries and increased focus on emerging technologies drive high demand for advanced digital skills. However, some companies may not be fully equipped with the necessary infrastructure to provide right opportunities. These limited career advancement opportunities can lead to dissatisfaction resulting in unplanned attrition.

Further, employees may feel demotivated when IT firms do not offer higher salaries and other incentives, such as bonuses, stock options, and flexible working arrangements. This will cause them to seek job opportunities elsewhere to secure more favourable compensation and benefits packages.

Besides, the demanding work culture of Silicon Valley, characterized by long hours and little time off, can lead to burnout and other adverse effects. It includes issues such as fatigue, anxiety, and an increased risk of illness among tech workers. These factors, along with experiences of micromanagement and a lack of promotion, can contribute to a high rate of employee turnover.

Now, let’s dive into the strategies that can help manage unplanned attrition and keep your skilled employees on board.

Best ways to reduce unplanned attrition in IT companies

Everyone has heard the adage that hiring someone new costs more than retaining the talent you already have. Let’s take an example to understand this- if an employee leaves, the cost of attrition includes training a new employee, salary paid during non-billable activities, and the foregone billings in the training phase, among other down sides.

This is why controlling attrition rates matters. Below listed are a few proven strategies to reduce it.

Allocate work to IT consultants as per skills & interests

Every IT project has unique skill requirements, and misalignment in resource competencies and demand can impact project quality or timeline. For instance, a data analytics expert with a strong background in statistics, ML, and data visualization is frequently deployed on tasks such as troubleshooting hardware issues and writing documentation. In the long haul, this could lead to disengagement and demotivation, with the data analyst leaving the organization.

Additionally, when an under-skilled employee is allocated to skill-intensive tasks, it hampers the project’s progress and delays its deadline. Thus, a resource manager must diligently assess each project’s requirements and the IT consultant’s skills and interests to allocate work accordingly. This will keep them engaged, eliminate boredom, and reduce the risk of unplanned attrition.

Monitor and track tech consultants’ utilization levels regularly

A study shows that 42% of IT workers facing high burnout levels are considering quitting their company in the next six months.

The high burnout levels among IT workers are a concerning trend and can be attributed to insufficient staffing, tight project deadlines, misalignment of skills and tasks, etc. These factors can eventually lead to increased physical and mental exhaustion and heightened stress. Conversely, when IT professionals are not utilized their full potential, they will become disengaged and demotivated in their current role and look for opportunities elsewhere.

To reduce the attrition rate, managers must monitor and track the utilization levels of the consultants. By optimizing the resources’ schedule and distributing workload evenly, managers can effectively utilize IT employees’ skills and knowledge. This enhances performance, boosts productivity, and prevents burnout or disengagement while lowering unplanned attrition.

Minimize the bench time of IT consultants efficiently

IT firms often maintain a pool of consultants on the bench to ramp up resources for new projects quickly. If they don’t, they may end up firefighting for resources at the last minute, causing a loss of business. This can be avoided by working closely with project managers to anticipate future project completions, identifying and securing new initiatives for ramp-down resources.

So, it is imperative for managers to efficiently manage the bench by proactively assigning them to billable or strategic work. In case their skills are unsuitable for emerging project vacancies, IT firms can implement on-the-job training or reskilling  programs to make them billable. This will improve their morale and make them feel valued and important, thus reducing unanticipated staff turnover.

Redesign the work environment into a remote/hybrid model

A study found that hybrid work reduced the attrition rate in a large tech firm by 35%.

The above data suggests that a mix of in-office and remote work aids employee retention. This can be attributed to the benefits of a hybrid work structure, such as increased flexibility, improved work-life balance, and better performance and productivity. So, managers should make efforts to redesign the work environment to suit the needs and preferences of the tech workers.

The resumption of work from offices in phases can also help IT firms to slow down attrition rates. Further, firms must invest in the right remote collaboration tools and implement stricter security measures to protect the company’s data. Additionally, firms can adopt flexible work schedules to accommodate employees’ evolving needs. This would lead to greater job satisfaction and better employee retention.

Leverage job rotation to break consultants’ monotony

When IT consultants are frequently deployed on similar projects, the monotonous, repetitive work can cause boredom and a feeling of career stagnation. This will result in lower morale, productivity, and unplanned attrition.

According to research, 85.7% feel that job rotation resulted in positive attitudes towards work and enhanced career development.

Therefore, managers can implement a job rotation strategy that helps resources diversify their skillsets and project portfolio. This attracts talent to stay with the company as they see a lot of opportunities to upgrade their skills and follow in the footsteps of their leaders to achieve career goals.

Facilitate succession planning for critical positions

High attrition rates, particularly in IT firms, require effective succession management to maintain business workflows. If not, it may lead to disruptions in the company’s operations, loss of key employees, and costly hiring cycles. This can also negatively impact the firm’s productivity, morale, and stability.

However, one strategy to manage unplanned attrition in the IT sector is to identify and groom potential successors for critical positions. For instance, managers can evaluate which junior developers have the skills, experience, and track record to fill the role of a senior developer in the future. Providing these potential candidates with a clear career path and development plan can give them a sense of growth. This will make them more likely to stay with the company long-term, reducing attrition.

Offer competitive compensation and benefits

“According to research, salaries and benefits remain the primary motivator for workers changing jobs.”

In today’s highly competitive job market, offering a competitive salary and benefits package is crucial for retaining top talent in the tech industry. Therefore, by providing employees with a comprehensive package that includes a wage revision cycle, viable bonuses, ESOPs, and other additional perks, employers can improve employee morale and motivation.

This can, in turn, lead to better performance and productivity. Moreover, offering frequent promotions and salary hikes during the appraisal will help attract and retain top talent. It also allows the company to maintain a favorable reputation in the industry.

Organize team-building activities regularly

Effective collaboration is essential for the success of IT projects and for the team to function efficiently. The shift to remote work since the pandemic has caused IT employees to feel disconnected and led to a decrease in team communication and cohesion, which can lead to a hostile work environment.

To address this, managers can implement team-building activities such as team outings, yearly retreats, etc. They can also arrange online workshops, training sessions, or webinars to support professional development and foster a sense of community among remote employees. These pursuits provide opportunities for informal social interactions, which allow team members to bond on a personal level, despite being physically distant, and contribute towards employee retention.

Encourage IT employees to take paid time off

IT employees often work long hours, have tight deadlines, and feel pressure to resolve last-minute technical issues. This high-pressure work environment can lead to increased stress levels, fatigue, and burnout, affecting employee morale and productivity in the long run.

To combat this, managers should encourage employees to take advantage of their paid time off to reduce stress and improve overall well-being. By providing employees with the opportunity to relax and rejuvenate, they will return to work feeling happier, well-rested, and more efficient. Furthermore, when employees take appropriate time off, it helps enhance employee satisfaction and reduces the likelihood of unplanned attrition, creating a healthier work environment for all.

Engage senior IT consultants in strategic roles

Senior IT consultants bring a wealth of experience and industry knowledge to the organization. Still, due to their seniority and higher cost rate, they are often limited to top-priority, billable projects. However, this can lead to monotony and stagnation, and they may seek new opportunities elsewhere. To retain them, managers should give them more prominent roles and assign them to lead new projects or mentor junior employees.

For instance, when an IT firm receives a new project, a senior developer’s role may go beyond implementing complex software systems. Instead, the expert could be assigned a critical role that includes mentoring and guiding junior developers, helping them to develop their skills and improve their performance. This way, by keeping them more involved in these strategic roles, IT firms can create a more rewarding work environment that is more likely to retain top talent.

Let’s now examine how resource management software can be beneficial.

How can resource management software helps minimize unplanned attrition in IT firms?

Today, organizations are leveraging technology to create an environment that fosters employee engagement and satisfaction. Similarly, advanced resource management software can help IT firms to retain top talent.

Here’s how-

• The ERM tool’s enterprise-wide visibility and advanced filters enable managers to identify the right consultants for the projects at the right time.  Moreover, the competency matrix within the tool also empowers managers to understand who can be considered for strategic and critical roles.
• The forecasting capabilities help predict resource shortages and surpluses in the long and short term, bridge that gap in advance and ensure efficient resource allocation. In addition, it boosts productivity and engagement, which lowers attrition.
• Managers can track their team’s utilization with color-coded heatmaps and associated reports and take corrective action if the tech workers are over or underutilized. Ensuring optimal utilization helps reduce burnout, boredom, and unplanned attrition.
• The collaboration function allows real-time communication to start conversations with team members across various touchpoints, encouraging a cohesive work environment and reducing attrition.
• Lastly, managers can use the open seat feature to publish open positions for various projects. Employees can express their interest in a project and get selected as per their capability. Allowing IT consultants to work on projects of their interest leads to improved motivation and retention in the workplace.

Conclusion

Unplanned attrition can be a significant challenge for the IT industry, leading to project disruptions, increased costs, and a loss of institutional knowledge. However, by combining the abovementioned strategies with robust resource management, IT firms can effectively manage unplanned attrition, leading to greater organizational stability and success.

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has highly customizable products for project portfolio management, professional service automation, and workforce planning software based on business requirements.

The above statistic illustrates how the IT industry will grow exponentially in the upcoming years. In fact, the growing digitization has led to increased importance of this industry. Moreover, it plays an instrumental role in enhancing the efficiency of every other sector, be it health, education, hospitality, etc.

However, this rapid growth has brought forth challenges such as cyber-security threats, outsourcing risks, economic slowdown, resourcing bottlenecks, and more.

Amongst these, resource management challenges such as growing skills gap, sub-optimal resource utilization, lowered productivity, etc., are the major ones that can even delay or halt IT projects, resulting in client dissatisfaction and loss of business.

Therefore, to remain competitive in the long run, firms need to stay aware of these resourcing challenges and course-correct them before it’s too late.

This blog enlists the most prominent ones and proven solutions to mitigate them. Let’s begin:

What are the main characteristics of the IT industry?

Essentially, the IT industry can either be product- or service-based. The products developed range from software to different applications catering to different needs. On the other hand, the services typically include IT-enabled services (ITES), e-commerce, consulting, customer support, etc.

Also, this industry involves a multitude of human and non-human resources that help maintain the firm’s workflow. Following are some of the examples:

Human resources: Programmers, developers, data analysts, testers, UX writers, associates, etc.

Non-human resources: Tools and technologies, software, hardware, etc.

The IT projects can be for either long-term or short-term duration depending on the business requirements. The resources for the projects can work from onshore, offshore, or nearshore locations. It can also get executed in a hybrid model where the resources can be either from the in-house staff or vendor organizations.

Further, while developing an IT product or delivering a project, managers use different project management methodologies such as – Agile or Scrum. These methodologies are iterative and allow room for stage-wise changes to minimize efforts on rework.

However, managing resources in such a dynamically changing environment can be challenging and create multiple bottlenecks. The following section explains multiple resource management challenges in detail and techniques to overcome them.

Resource management challenges of the IT industry & their solutions

Resources are the most valuable asset of an IT organization because they analyze, design, and develop products and offer exemplary services to clients and customers. Hence, It’s a no-brainer that managers should manage them intelligently. However, it’s easier said than done. Managing resources in an IT industry brings forward a plethora of challenges ranging from skills gaps to burnout.

Here’s a rundown of some of the major ones and their solutions.

Growing skills gaps within the workforce

According to a survey, 64% of IT leaders see a skill gap in their companies.

With the emergence of advanced technologies such as – AI& ML, IoT– enabled gadgets, and business models, companies are experiencing a widening skills gap. That’s because the current workforce is not proficient in the new programming languages such as R, Python, etc.

As a result, specific market opportunities are lost, affecting the business. Moreover, if companies hire a mismatched skill set to execute the project, it can compromise the quality.

So, How can you combat this?

Solution: Foresee project demand and implement training methods proactively

The ideal way to tackle this challenge is to stay forewarned of pipeline projects and identify the skill requirements. Then, businesses can implement robust resource management software and enable resource managers to foresee these demands and analyze the existing skillset. Further, they can evaluate the skills gap ahead of the curve using enterprise-wide visibility.

To bridge the gap, they can conduct various training and upskilling programs and L&D initiatives to future-ready the existing workforce. This will help them hone their existing skills and acquire new ones to take on advanced projects.

Last-minute firefighting to fulfill pipeline demand

When resource managers cannot foresee the pipeline projects in advance or do not receive the resource request on time, it’s challenging to identify competent resources during project initiation. This triggers the last-minute firefighting, and in addition, it can result in increased hiring costs if a niche-skilled resource is recruited at the last moment. Moreover, it may even result in the hiring process can compromise resource quality which can adversely affect the delivery.

So, what is the suitable solution?

Solutions: Ensure effective capacity planning ahead of curve

As mentioned earlier, resource managers can use an ERM software to get foresight into pipeline and approved project demand. Based on this data, they can initiate capacity planning. Using the capacity vs. demand reports, they can proactively identify the excess or shortage of resources.

If there is a shortage, managers can initiate planned hiring with enough lead time in hand. It will ascertain that the right resource is hired at the right cost. They can also retrain benched resources or employees with partially matching skillet before the project’s onset and provide them suitable training to bridge the gap.

Sub-optimal resource utilization in the IT industry

According to Gartner analyst Rober Handler, the sweet spot for productivity is between 70% and 80%.

Less than that or above will lead to sub-optimal resource utilization, negatively impacting the resource health index. Sometimes due to silos of data and lack of real-time insights into the resource availability, resource managers double-book or under-allocate IT employees. Overallocation of resources will lead to stress and burnout, which can cause unplanned attrition. On the contrary, underutilization of a resource will result in disengagement, leading to a demotivated workforce.

So, how can you prevent this?

Solution: Maximize productive workforce utilization

You can address this challenge with the help of a resource management solution. The tool offers a multidimensional view of enterprise-wide resource’s current and future allocations on a centralized platform. If a resource is allocated to non-billable or admin work for most of the capacity, managers can mobilize them to relevant strategic or billable work. This will facilitate them to maximize productive utilization and enhance profitability.

For instance- a web developer is allocated to work on non-billable or admin tasks like- data entry for 50% of their capacity. In that case, the resource manager can mobilize them to billable or strategic projects, allowing them to use their skill in revenue-generating work. Similarly, if employees are overutilized, the manager can either adjust the project timeline or procure additional resource to ensure uniform workload distribution.

Increase in bench size

Due to a lack of visibility into current and future project and resource schedules, resource managers cannot foresee projects approaching ramp down. As a result, employees from several projects end up on the bench. For example, let’s consider a software development project. During the initial phase, the project demands multiple resources, such as developers, analysts, designers, etc., to build the software. However, when the project has reached the final stage, only limited resources are required to test the software and finalize it. At this point of time, the project manager rolls off the excess of resources, causing a ramp-down.

So, how to manage this increasing bench size?

Solutions: Manage ramp-up and ramp-down activities Intelligently

First and foremost, resource managers can oversee resources future schedules to understand when they will be rolled off from projects. Accordingly, they can allocate appropriate work in advance.

Moreover, they can use people on the bench and project vacancy reports to foresee the resources who will be relieved from projects. Resource managers can then compare the project vacancy report and allocate the tasks that will align with their skill set. If the skills are partially aligned, they can conduct training programs before the project begins.

Ineffective resource management in agile projects

As mentioned earlier, IT projects primarily implement an agile project management methodology. Since it is an iterative approach and is subject to dynamic changes, it is imperative for managers to have resource-related information in real-time. If not, it can cause delays, hamper the interdependent tasks, and disrupt the product backlog and release planning. The lack of visibility into resource attributes poses a challenge in managing them in agile projects.

How can you combat these issues?

Solutions: Use resource management software to manage resources

Using resource management software, managers can have resourcing information at their fingertips. For instance, if an ad hoc change is requested during one sprint and requires additional resources, managers can identify the right resource with 360-degree visibility.

In addition to that, the tool provides information on various resource metrics, project financials with forecast vs. actual reports, etc. Thus managers can balance people, time, and budget to deliver the project successfully. Moreover, by leveraging the resource utilization reports, managers can take corrective measures if a resource is spending more time than forecasted on non-billable activities such as scrum meetings or sprints.

Unplanned attrition

According to a survey, 37% of employees left their organization due to a lack career growth.

Often, project managers choose the same critical resources for their projects as they perform well and have built a good rapport. As a result, the other resources will have fewer opportunities to enhance their portfolios. Furthermore, the resources working on similar projects will start experiencing career stagnancy. Both employees with a lack of career opportunities and the ones feeling stuck will look for opportunities elsewhere.

What do you think can be done to prevent this?

Solutions: Empower employees to choose work of their interest

To prevent employee turnover, managers can give employees a choice to select projects of their interest. With the resource management tool, they can publish open positions mentioning specific requirements such as skills, qualifications, etc.

Accordingly, resources interested in the open position can apply and wait for the approval. The manager will then analyze the competencies of interested resources and allocate the right resource to the project. Since employees can work on projects that interest them, they will be more motivated and engaged, thereby reducing the attrition rate. Additionally, organizations can promote interdepartmental collaboration to encourage employees to diversify their portfolio. Lastly, they can also invest in succession planning to avoid any bottlenecks.

Employee burnout

According to a survey, 80% of workers feel they are burning out due to excessive workload.

The issue of burnout is a serious concern for employees in the IT industry.

Long working hours, limited flexibility, insufficient appreciation, no work-life balance, and the traditional bell-curve rewards system are some causes of employee stress and burnout.

For example- A software developer works long hours just to fix a bug in the software and finish the project within the deadline. The unmanageable workload, unrealistic deadlines, etc., are significant causes of burnout. Further, sometimes managers over allocate resources without having complete visibility of their available capacity and utilization, resulting in overutilization and burnout.

What is the ideal way to prevent burnout and unplanned absenteeism?

Solutions: Implement resource optimization techniques

A simple solution to this issue is to leverage resource management software and get insights into the real-time utilization heatmap. It gives you a comprehensive view of your resources’ utilization rates in a color-coded manner. If a resource is over-utilized, you can procure additional resources and adjust project timelines. These are known as resource optimization techniques.

Also, the tool lets you compare the forecast vs. actual utilization. If a resource is spending more time than forecasted, then managers can course-correct ahead of time.

The bottom line

Attributing to the ongoing advancements and emergence of new technology trends in the industry, the IT sector is plagued by various resource-centric challenges. If not appropriately handled, these challenges will negatively impact the IT projects and profitability. Unless businesses take proactive measures to combat these roadblocks, it will adversely affect the top line and bottom-line of any company.

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

Project management addresses planning and applying specific processes and principles to ensure project success. As per PMBOK guidelines, there are five different steps in project management:

• Initiation.
• Planning.
• Execution.
• Monitoring and Control.
• Closing.

The data-interpretation capability of AI can provide real-time insights into project metrics. It can enable project managers to make data-driven decisions based on past experience. For instance, Cap Gemini uses the cognitive computing system IBM Watson to improve resource deployment in projects through efficient resource planning.

In this blog, we discuss different ways AI can help in project management.

Importance of AI in Project Planning

A project comprises a series of tasks designed to meet a specific objective.  It can be developing a new product/service, constructing a bridge or building, house renovation, upgrading the data system, implementing new business, etc.

Irrespective of the nature and size of the assignment, every project manager strives to meet the project goals and objectives, i.e., deliver within time and budget. Effective project planning paves the path for a project’s success. 

Project planning is an essential component of project management. It establishes the project scope and defines the objectives to achieve them. A project plan enlists how the project will be executed, monitored, controlled, and closed. The plan must include every project constraint, such as the costs, risks, resources, and deadlines. The project plan consists of six essential steps, namely:

• Creation of a task list.
• Formation of a budget plan.
• Preparation of a risk management plan
• Production of a communications plan
• Making of a project schedule.
• Allocating appropriate resources to suitable tasks.

AI-based tools assist project managers in handling different tasks during each phase of the project planning process. It also enables project managers to process complex project data and uncover patterns that may affect project delivery. AI also automates most redundant tasks, thereby enhancing employee engagement and productivity.

As per Gartner, AI will eliminate 80% of today’s manual project management tasks by 2030. AI machines will take over everything from planning to data collection, tracking to reporting, and so on.

Solutions of AI in Project Management

From scheduling to analyzing the working team’s patterns, AI has become an obvious benefit to project managers.

Here’re some applications of AI that aid in the project management cycle :

Knowledge-Based Expert Systems (KBE system)

A knowledge-based expert system is a computer program that exhibits the knowledge and analytical skills of one or more human experts regarding a specific problem. The system captures the human expert’s experience and codes this in a computer so that any user can understand it.

Here is a diagrammatic representation of the architecture of a KBES.

The knowledge engineer/human expert feeds information into the KBES. Often this information is declarative, i.e., the expert would state some facts, rules, or relationships into the knowledge base. The inference engine would then use the knowledge base as a data file to determine the knowledge and provide the output.

In most cases, experts use “IF-THEN rules” to input knowledge. The if-then rule takes the form as such:

If <condition> then <solution>
The solution will be more narrowed and distinguished depending on the rules (if) that are fed into the system. For example,

For example,
“If the mammal stands on two feet and wears clothes, then it is a human being.”

Here, “two feet” and “wears clothes” are the conditions, and based on that knowledge, the KBES can distinguish the solution as a “human being.”

Knowledge-based systems work across several applications. Here is a list of KBES applications:

• Classification – The network identifies an object based on the mentioned characteristics.
• Diagnosis – The KBES deduces any malfunction from data.
• Monitoring – The system compares data from a past system to predict patterns.
• Scheduling & Planning – The KBES develops or modifies a plan based on the project.

For instance, in the medical field, a KBES helps doctors diagnose diseases better. A KBES is also used in industrial equipment fault diagnosis, avalanche path analysis, and cash management.

Another example of a KBES is the Attendance Capturing & Recording System (ACRS). This automated system saves time for both managers and employees. The system reduces errors and avoids disputes by eliminating manual record keeping. The ACRS has several advantages such as:

• Individual information of employees
• Faster information searching
• Easy generation and review of reports
• Full database backup
• Specific authorization and security levels for employees

Artificial Neural Networks (ANN)

An artificial neural network (ANN) is a computing system that simulates the human brain and processes information. Like the human brain, an ANN has neurons called processing units, which are interconnected by nodes. These neurons consist of input and output units. The input units receive the information, following which, the neural network learns about the data to produce one output report.

ANNs use a process called backpropagation, which is an abbreviation for backward propagation of error, to process the perfect output. The ANN records the information and compares the fed information’s initial solution with the known actual solution. The solution’s errors are provided back into the network and used to modify the network’s algorithm the second time around, and it keeps on going until the ANN can reach the desired output.

An ANN uses yes/no type questions with binary numbers to produce the result. For example, an educational institution wants to know if the students are Indian citizens, and it has input units fed with questions such as:

• Was the student born in India?
• Does the student have a PRC?
• Does the student have a birth record?

The institution wants the “Indian student” responses to be Yes Yes Yes, (binary format- 1 1 1) for the three questions. Now, if the ANN’s actual output is 1 0 1, it will adjust its results until it delivers the output as 1 1 1. After this phase, the ANN will automatically give the details of every student to the institution.

As a project management tool, ANN predicts cost overruns based on several parameters such as project size, contract type, and project managers’ competence. It also helps in automating project activity sequencing based on the functional requirements. ANN is also used in civil engineering for prediction, optimization, system modeling, and classification.

The replication of past cost trends in highway construction and estimation of future costs trends in this field in Louisiana, USA, is an example of ANN application in project management.

Fuzzy Logic

Fuzzy logic is defined as a many-valued logic form that may have truth values between 0 and 1. It was designed to allow the computer to determine the distinctions among data which is neither true nor false. Loosely based on the Boolean true or faulty logic, this logic concept determines partial truth. For example, we may come across situations where we can’t decide whether a statement is true or false. At that time, fuzzy logic helps in developing reasoning that will solve the crisis. The fuzzy logic algorithm solves a problem after considering all the available data. After that, it makes the best possible decision based on the case. It imitates the way a human will make a decision.

Here is a dramatic representation to show the difference between fuzzy logic and Boolean logic.

Fuzzy logic uses membership degrees within the interval 0 (no membership) to 1 (full membership) to represent the range of possible values. With this approach, it evaluates the “degree of truth” of propositions.

Fuzzy logic is used in various fields. Some of its standard applications are:

• The aerospace industry where it provides altitude control of spacecraft and satellites
• Larger organizations where fuzzy logic enables decision-making support systems and personal evaluation
• Natural language processing and various other intensive applications in AI
• Knowledge-based expert systems

This technology works out favorably for construction project managers who want the least cost routing to work out the logistics of having material supplied on-site. Plus, they can model probability distributions to assess risks in construction projects.

This fuzzy model is based on two primary indices, schedule performance index (SPI) and cost performance index (CPI). It transforms the SPI and the CPI and evaluates the overall project status (output). This approach helps fuzzy logic to replicate the risk and uncertainty in the project.

AI Chatbots

A chatbot is an AI software that can simulate a conversation with a user in natural language through messaging applications, websites, mobile apps, or telephone. There are mainly two types of chatbots, namely:

• Rule-based chatbots: These chatbots follow a set of established rules to respond to questions of the user. For instance, when you ask for a weather forecast, the weather application chatbot fetches the data from different sources and responds with the information.
• Machine Learning-based chatbots: These chatbots are based on machine learning and can process the question and understand the meaning behind the problem. These bots use data from the previous conversation and learn to handle more complex questions in the future.

In project management, chatbots can automate repetitive and mundane tasks, thereby helping teams collaborate and focus on high-priority billable work. For example, the chatbot Meekan helps teams automatically match their schedules. The team members can ask the chatbot to schedule a meeting, and the bot will check the team’s schedule to book a date and time.

If a member can’t make it to the meeting, the chatbot will find an alternative slot and ensure that no one misses the meeting.

Similarly, bots such as Howdy and PMbot can automate different aspects of task management. These bots also assist in task selection, keeping track of the tasks completed, and even distribute created reports to all stakeholders involved in the project.

Moreover, managers can integrate chatbots with third-party software such as project management tools. The team members will perform all commands directly in their chat rooms, while the project manager will get an entire history of all tasks executed by all teammates. Chatbots can also monitor every change made to the source code and report bugs in any code line. It can then link it to the person who made a mistake. This solution helps in evaluating and improving team performance.

How AI helps Project Managers

Project managers can turn wayward projects around by adding applied intelligence to performance monitoring tools. This way, you can track progress and stay forewarned of potential risks that threaten project delivery. What’s more? You get to rule out projects devoid of any profitable outcome.

With your main goal being to avoid any surprises as you near the end of project delivery, the areas where AI provides conflict-resolution are:

Automated Risk Estimation

Every project is prone to risks. AI can accurately predict the number of defects or quality in general in managing projects. Using AI models at different stages of projects can help identify and alert teams if the process is risky. For example, AI can observe the actual progress and compare it to the planned schedule. Based on that data, AI can:

• Alert potential delays
• Point out the underperformance based on KPIs
• Recommend ways to bring the project back on track

You can factor in budgeting and scheduling constraints to make informed decisions on risk management.

With machine learning, you can retrieve parametric information as and when required. For instance, you can use past data such as planned start and end dates to predict future projects’ realistic timelines. The system can add an upper and lower bound to these dates to account for delays within reason. If the system indicates high confidence in a particular project, successful delivery is guaranteed.

Adaptive Resource Management

To ensure your projects remain on track, the right people must work on them. AI delves into the history of past projects, which give you real-time information on resource engagement. For instance, the manager can compose the project team and assign roles and responsibilities to individual team members. AI tools also ensure that the project managers manage the project effectively and stick to deadlines.

AI helps your staff remotely access real-life training material, allowing them to enhance their skills and knowledge quickly. Based on this, you’d know if your resources are ready to be deployed. You can add extra hands or take people off the project if a disparity arises in the hours required versus projected availability. This reduces the time taken to onboard them on to new projects. As a result, project delivery is quickened, with your clients gaining clarity on project deployments.

Predictive Analytics

Predictive analytics is used to make predictions about future events. It can generate future insights based on historical data and analytics techniques such as statistical modeling and machine learning. Companies can use past and current data to reliably forecast trends and behaviors.

Project managers can estimate the effort and resources needed to complete a project more accurately. Predictive analytical tools contain the exception handling feature, which points you to an excess or shortage of the right resources. The idea behind predictive forecasting is to strategically identify and block risks before they take over the project. It helps you prepare the optimum project schedule.

Here is a rundown of all the benefits that project managers get from predictive analytics:

• Gain an overview of the project risks and close identified gaps.
• Improve project outcomes by prioritizing necessary actions.
• Realize early value from the projects.
• Negate financial losses by improving project oversight.
• Drive greater efficiency by eliminating unnecessary project characteristics.

Intuitive forecasting is a statistical approach that validates your project. Not only does it point you to the correct number and type of resources (both human and technical) needed, but it also reduces labor costs.

Conclusion

Artificial intelligence is changing how companies work, and project management is a crucial area positively affected. The applications of AI in project management are comprehensive. These solutions provide the project manager with enhanced accuracy, strategy, and support. It has also improved the project managers’ emotional intelligence and creativity and negated individual decision-making biases.

We’ve reached a stage where AI has reduced the need for excess human intervention. For one, it can complete more tasks in a shorter time frame. With data at the heart of everything, AI tools like a data warehouse have the storage capacity to hold more information than ever.

For example, BIM 360 Field is used in construction to capture photographic evidence of project sites. It is convenient when your construction project teams have to conduct terrain feasibility and environmental impact studies.

SAVIOM Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

Let’s feed our curiosity and have a look at some of these trends:

Got a better idea of your position in the market and which technologies are worth investing in? Here’s to staying informed and digitally-ready!

It is an important part of dealing with the challenges in operations management within the company. This would include the identification and management of bottlenecks and cost management. It would also look into the different ways in which daily processes can be made more efficient in the long run.

BPM is also based on a number of methodologies, which are key to offer a comprehensive framework for companies to follow. These would include the following models:

• Modelling: Structuring different models and reducing costs involved in the process is a major part of modelling.
• Automation: Transforming businesses to digital processes can be a major change for a number of companies. Electronic processes can improve the way records are maintained, faster systems and other benefits.
• Management: Internal processes need to be reviewed, and it is necessary that their efficiency is maintained in the long run. Systematic changes would ensure that inefficient processes are fixed, making employees and processes more effective.
• Optimisation: Cost management can make or break businesses. Optimising costs could be through improvement of processes, resolving bottlenecks and engaging employees in a more gainful manner.

Let’s look at the different components which are integral to the Business Process Management of a company.

1. Fundamentals of Business Process Management

Given how every business differs from one another, the BPM software would correspondingly change, too. It would include identifying the business challenges accurately in the system. It is important to understand the exact impact that each of these challenges bring to the process..

Identifying these challenges become increasingly difficult when business and their processes are interconnected with each other. However, with the right aim and strategy, planning an effective process might be easy to attain. While the most direct impact of the process could be improving finances, other effects would include improving how the team functions, among others.

An effective BPM model can also be an important part of your business continuity plan. It offers a fail-proof plan in case projects fail, and your company can continue operating in a business-as-usual scenario. An efficient BPM software can retrieve lost data or maintain audit trails which would help bring your business back up to its feet.

The basic components of a BPM tool would be based on the methodologies as discussed in the above section. The different parts of an ideal structure are as follows:

1. Formulating new business processes: Project managers and senior management should plan out the design of the new business process, and detail it out based on the organisation’s requirements.

2. Awareness initiatives: The new processes should be supported with adequate capacity building initiatives. This would help all stakeholders in the organisation learn about the impending process changes in the organisation.

3. Define process owner roles: It is important to define the person who would lead the change process, and would be in charge of reviewing the performance of the systems as well.

4. Measurement of process performances: Timely review of the different systems are important so that the BPM model stays updated in the long run.

5. Adjusting the corporate culture: Along with changing the processes, it is also required that adequate organisational changes are made from time to time, which would help in an easier transition for the company.

6. Regular reviews of processes: There is a continuous need to improve the processes of the BPM model. This would help process owners make adequate changes from time to time to improve the overall efficiency.

7. Reformed organisational structure: With an improved functioning process model, the organisational structure would go through significant changes in tune with client and stakeholder requirements.

It is to be noted that the changes in the organisational structure would be based on the reformed processes as a part of the BPM methodology. However, this would require a major upheaval in how the company functions and implements the different processes.

The ideal way to test out a BPM model would be to test it out with an initial project. This will also enable project managers to develop skills for improving processes. Managing the business design and development would also build commitment in the project, improve funding sources, and ensuring success in projects going forward. With adequate success, there would be an opportunity to extend BPM across the enterprise.

2. Benefits of using BPM in the company

Implementing a BPM model would ideally improve the way the organisation functions. Some of the other benefits include the following:

1. Improved revenue: This would include both project and non-project revenues. With an overhaul of the whole process structure, the overall revenues would be improved.

2. Cost reduction: With improved processes, unnecessary costs will be minimised, leading to a much more efficient system.

3. Better compliances: With an evolving BPM model, there would be better adherences to the existing compliances, which leads to better project management.

4. Risk management: With better compliances, business risks would be detected much faster, leading to a minimal impact in projects.

5. Improvement in productivity: Resource overallocation and time spent on projects would reduce to a great extent, speeding up the project turnover time.

6. Better customer satisfaction: Improved project delivery would ideally lead to happy clients. Since stakeholders and clients are a part of the BPM model, customers can offer feedback to processes which would improve the company’s efficiency.

7. Competitive advantages: An efficient BPM model would give the organisation a competitive edge than other companies

8. Transformative processes: Regular feedback and changing of processes would be incorporated in how the company functions. This will be in tune with the increased popularity and need for agile projects in the organisation.

9. Innovative approaches: One of the main benefits of having an inclusive model is ideation and brainstorming from all employed categories, leading to better solutions for commonplace problems.

BPM models make processes extremely flexible in the long run. With agile processes becoming a part of the functions that a company performs, the tool could benefit the company deeply in the long run. Employees, an important part of the organisation, also have a huge impact from such a model. These include better client delivery and improved performances as well.

A successful process would also impact company revenue in a positive manner. With a better-equipped workforce and improved processes, organisations can take up more projects in the long run. Continuously evolving the BPM model leads to a structure which is driven towards offering a great performance in every project.

According to the 2020 PMI report,

“17% of IT projects fail due to numerous risks.”

Thus, the necessity for risk management has become unavoidable in the IT projects sector. This blog will explain the various risks that aggravate the IT projects and also provide ways to eliminate those threats.

But first, let’s start with the definition.

What is IT Project Management?

An IT project typically deals with IT infrastructure, information systems, or computer technology. Some of the most common IT projects are web development, software development, mobile app development, network configuration, hardware installation, etc.

As the name suggests, IT project management involves taking control of such projects from initiation to closure. It includes planning, scheduling, design, development, and reporting.

What are IT Project Risks?

Like every other project, IT projects are also prone to various risks. Here is a rundown of the most common risks that can plague IT project management:

Scope creep

Scope creeps are inevitable, and almost every project suffers from scope creeps at a particular stage. Furthermore, the probability of scope creep increases depending on the size and complexity of the project.

These are mainly caused due to changing requirements of stakeholders or clients. However, sometimes internal miscommunication also leads to scope changes.

Such changes result in wasted productivity, key deliverables getting missed out, project overruns, and so on. Ultimately, the whole project can look very different from what was initially envisioned. For example, the luggage handling system project of the Denver International Airport failed due to overwhelming scope changes.

Unclear requirements

There may be situations where the client wants something particular, but the project team has misconstrued the requirements and is working on something completely different. This lack of clarification mainly occurs due to poor communication from clients and stakeholders. This situation escalates, even more when stakeholders are not kept in the loop.

Unclear requirements may lead to unfinished tasks, a complete or partial change of the deliverable, schedule changes, extra resources, etc. For example, the Chrysler Comprehensive Compensation System project was shut down due to a lack of clarity regarding business requirements.

Budget overrun

Similar to scope creep, budget overruns also have an adverse effect on IT projects. They are more or less related to one another. For instance, changing the scope of a project causes budget overruns. Other factors include inaccurate budget estimation at the initial stage, allocating high-cost local resources, etc.

McKinsey and the University of Oxford conducted joint research on 5400 IT projects. According to their report, all these IT projects had a total overrun of $66 billion, and 66% of those projects had cost overruns.

Time overrun

Time overrun is another common IT project risk. It generally occurs due to scope changes, poorly estimated tasks, unplanned resource absences, poor communication with the client, etc.

For example, let’s consider that a highly experienced resource is allocated to a critical task and plays a vital role in task completion. But due to some reason, they remain absent, delaying the critical task and its dependencies. Subsequently, the project fails to deliver on time.

Employee turnover

Unplanned employee attrition is a significant concern for all IT project managers. The main reason behind this is the excessive workload on the resources. But there may be other reasons such as lack of employee recognition, insufficient opportunities for career development, vague understanding of role and responsibilities, etc.

For instance, assigning a critical task to a new hire will be overwhelming. As a result, the resource will need training, which will, in turn, increase the timeline. Besides, overburdened with the work pressure, the resource will be demoralized, and it will hamper their productivity. Consequently, the resource may leave the company.

Resolving conflicts

Since project managers need to manage various resources within a project, internal conflicts are inevitable. One of the most project conflicts is the general ambiguity regarding roles and responsibilities. Often, project managers tend to assume that resources know what is expected of them. Likewise, they suppose that team members are aware of their duties towards the project. But that is not always true.

Role conflicts can lead to a lack of trust, poor team collaboration, compromised project quality, client dissatisfaction, etc.

Gold plating

Gold plating means adding extra features that were not part of the initial project scope. There are various reasons behind gold plating, such as proving ability, earning extra credit, hiding defects, etc. However, although done with good intentions to impress the client, gold plating may not be fruitful in practicality as it overshoots the budget and timeline in the process.

Moreover, as you enhance the product with additional features without the client’s approval, it accounts for unauthorized changes in the scope. As a result, they may refuse to accept the deliverable.

Unprecedented surprises

Apart from the risks mentioned above, IT projects may be subject to sudden surprises. For instance, the Covid-19 pandemic that wreaked havoc across the globe mandated remote work across projects. Accordingly, people were forced to stay inside their homes. Besides, offices had to be shut down, schools had to be closed, and so on. Project-centric organizations were not able to deliver projects as employees could not collaborate.

As a result, decision-makers had to either halt or even cancel the projects.  As per Dodge Data and analytics,

“In April 2020, 40% of construction projects were delayed due to the pandemic.”

Lost opportunity due to skill shortages

Resource shortage is a significant issue that haunts IT, project managers. It occurs when resource demand exceeds the number of available resources.

One of the main reasons behind resource scarcity is the lack of visibility into future resource capacity. For instance, let’s assume that there is a pipeline project which requires highly skilled resources. But due to a lack of forecasting, you cannot view the future availability of resources. As a result, you have to hire new resources. However, that will incur more costs, and the stakeholders don’t approve of that. Thus, finally, it leads to a lost market opportunity.

Technology risks

Technological risks occur when an implementation does not work as anticipated. These risks may lead to security breaches, system failures, increased maintenance time, etc.

Even with the most comprehensive technical documentation and the best training models and algorithms in place, components can still misfire and generate errors.

Ways to Mitigate these Risks

One can avoid all the risks mentioned above with the help of these practices. These are:

Develop an effective project plan

A project plan helps in determining the goals and objectives of the project. Moreover, with the WBS in place, one can clear out the tasks, subtasks, deliverables, and interdependencies. Thus, the project manager can create an effective project schedule and allocate resources as per the plan.

Communicate regularly with clients

Constant communication with the client and the stakeholders helps clarify all the aspects of the project. Moreover, it keeps the project manager updated with stakeholders’ requirements to avoid hiccups during the project course. Besides, keeping the client in the loop during each stage ascertains that everything is going as planned.

Monitor project financials

Project managers must periodically track and compare the actual spending against the estimated budget. Tracking project financials throughout the project helps avoid cost overruns. A resource management solution helps monitor critical project financials such as costs, revenue, profit margins, and overheads. If there is a variance, then one can apply corrective measures to mitigate the financial risks.

Ensure timely completion of critical tasks

Critical tasks define the schedule of the whole project. Therefore, if a crucial task gets delayed, it will elongate the project schedule. Thus, to ensure that critical tasks are completed within the stipulated time, you must assign experienced resources. Moreover, you must keep track of the progress of such tasks. Thus, if any discrepancy occurs, then you can take proactive measures.

Ensure optimum allocation and effective utilization

Sub-optimal resource allocation and utilization are the major causes behind resource attrition. And to avoid that, you must deploy resources based on their skills, capacity, and availability. Moreover, once allocated, you must monitor their utilization rates and enhance productivity by mobilizing them from non-billable to billable work. Additionally, resourcing techniques such as resource leveling and smoothing to ensure that they are optimally utilized.

Document every important activity

As a project manager, you must make sure that there is no confusion between the team members. Confusions lead to conflicts, and that can make the project go haywire. Thus, to eliminate any unnecessary conflict, you should document every activity from the get-go and pass it on to all the members. That way, everyone is on the same page.

Stringent review of the project scope

To avoid gold-plating of any sort, you must monitor the scope baseline. That way, you can see if any unnecessary change is made to the deliverable. Moreover, you should control the communication and review every change request. If any change is required, you must first get it approved by the client and the stakeholders. Only then can you implement the changes.

Have a backup plan

Even if you have a full-proof risk mitigation plan, you should always have a contingency plan if something goes wrong. For instance, you must have a pool of specific resources on reserve if a project team member leaves in the middle of the project. But, you must also keep those reserve resources in the loop. That way, you can avoid further training when they are needed.

Resource forecasting and capacity planning

Forecasting resources can help avoid resource shortages for pipeline projects. With a resource management tool, you can track the current utilization rate of resources and ascertain their future availability. It will give you the leeway to bridge the capacity gap if there is a shortage. You can hire new resources or train existing resources, thus, eliminating the chances of last-minute firefighting.

Gap analysis to find a quick solution

A gap analysis helps clarify three key elements- the current situation, the ideal situation, and what should be done to minimize the gap. In addition, it helps identify particular areas for improvement and provides guidance towards actionable steps for improving the product.

IT Risk Management Framework

It’s better to have a risk management framework that can help minimize the impact of the risks. The following is a detailed description of a streamlined risk management framework:

Risk Identification

Having proper knowledge about the potential risks that can occur anytime during the project lifecycle helps to brace and deal with them better. Therefore, the first step is to identify the threat. For that, you can brainstorm with the project members and determine the risk. Based on that, you may create a risk register.

Risk Analysis

In this step, you will have to determine the impact of the risks. Furthermore, you may categorize the risks into core or non-core risks. Core risks need to be mitigated immediately as they can hamper project growth or team productivity. Non-core risks can be attended to eventually.

Risk Assessment

Once risk identification and analysis are made, the next step is assessing the nature and effect of the risks. There are two types of threats- positive risks and negative risks. Positive risks can be implemented in the project, whereas negative risks have to be mitigated.

Risk Treatment

It is the most crucial step in the whole framework. After measuring the type and impact of the risk, you will have to come up with a plan to eliminate the adverse risk. For instance, you may develop a contingency plan or discuss it with the stakeholders or the team members.

Risk Monitoring

It is essential to monitor the aggregate risk measures to ensure that risk levels remain optimal. For that, you may have to collaborate with the people who are managing the risks. Thus, it is necessary to have a transparent communication strategy.

Conclusion

There is no IT project without risks. As a project manager, you have to pay attention to every detail and monitor the project’s progress. In a nutshell, you must have an effective risk management strategy, as mentioned above. That way, you can eliminate the risks and ensure successful project delivery.

SAVIOM Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.