Managerial risk is somewhat more complex than technological risk, since it involves the effective administration of and control over the use of new technologies. While it is possible to train or employ development personnel in order to gain the required skills in the use of new technologies, it is less easy to obtain the managerial skills necessary to ensure the maximum benefit is gained from their use.
Like technological risk, managerial risk may also vary from the relatively simple to the highly complex. Some examples of managerial risk are:
The managerial risk arises not from the question of whether sufficient skills are present to utilize new technologies, but from the question of whether managerial personnel are sufficiently well-versed in the concepts underlying these technologies to provide effective administration and control over the use of the technologies, in order to ensure that maximum benefit is gained from their use.
Managerial risk may be mitigated by ensuring that managerial personnel possess a sufficient grounding in the principles underlying new technologies, in order that they may successfully adapt existing managerial techniques to the administration and control of the new technologies. These skills may be acquired in a similar manner to the technological skills required by programmers, through training and familiarity with the technologies involved. The decision must be made as to whether the benefit to be gained from the use of these technologies is sufficient to offset the time and effort involved in acquiring the necessary skills and establishing the managerial techniques to effectively control their use.
Managerial risk may also be mitigated by reducing the associated technological risk. For example, a new technology such as object-oriented programming principles can be implemented using tools such as the C programming language and Presentation Manager. There is likely to be a higher degree of familiarity with such tools in the development organization than with tools such as C++ or Smalltalk V. Therefore, implementation of object-oriented principles may be more effectively controlled by the application of established managerial techniques for C application development. While this will not eliminate the element of risk altogether, it will significantly reduce the managerial risk involved, and also help to mitigate the technological risk by facilitating effective control over the development process.