The Impact of Residual Risk and Resultant Problems on Information Systems
development and impact of residual risk
and related problems offer potent oppor-
tunities to understand and combat the
high failure rate of ISD projects that are
critical in today’s competitive business
environment. To better understand this
relationship, this research offers several
contributions. The first was to define and
development problems in the residual
Understanding the “misfit” between
the level of risk exposure of a software
project and its implementation of risk
management and the consequential
z 5 22.526, Std. Error 5 0.087, p , 0.05).
Furthermore, there was no direct effect of
technology-related risk on performance
when technology-related problems were
controlled for (b 5 20.162, Std. Error 5
0.127, t 5 21.277, p . 0.05), demonstrating
full mediation. For task-related problems,
the z-value was in the negative direction
as expected (b 5 20.235, z 5 23.405, Std.
Error 5 0.069, p , 0.001). In addition, there
was no direct effect of task-related risk
on performance when task-related problems were controlled for (b 5 20.044, Std.
Error 5 0.105, t 5 20.414, p . 0.05), indicating full mediation.
Table 7 summarizes our findings.
Consistent with the results from our
PLS analysis, the Sobel tests showed
that systems development problems
mediated the effects of actor-, technology-, and task-related residual risks
on system performance, supporting the
hypothesized mediating role of systems
Figure 3: Quality criteria and descriptive data of latent variables.
- Cost (–0.11)
(lines of code) (–016)
(staff hours) (–0.10)
H1: Actor project problems mediate the effects of actor residual risk on ISD
H2: Task project problems mediate the effects of task residual risk on ISD project
H3: Structure project problems mediate the effects of structure residual risk on
ISD project performance
H4: Technology project problems mediate the effects of technology residual risk
on ISD project performance
***, **, and indicate significance at the 0.001, 0.01, and 0.05 levels, respectively
Table 7: Summary of support obtained for our hypotheses.