5 Types of Project Risks: A Practical Guide Using the Source-Based Framework

In project management, risk refers to any uncertain event or condition that can influence a project’s outcome, either positively (opportunities) or negatively (threats). While seizing opportunities is valuable, it’s the negative risks that often keep project managers up at night. These are the risks that can delay schedules, inflate costs, reduce quality, or even derail the project altogether.

To manage these risks effectively, one of the most practical starting points is identifying where they come from. That’s the strength of the source-based framework, a widely used approach that categorizes risks based on their origin. By understanding the different types of risks from this angle, project teams can perform more effective root cause analysis and develop targeted mitigation strategies that actually work.

Below, we explore five major types of project risks using the source-based lens.

1. Technical Risks

Where they come from: Technical risks stem from the technologies, platforms, and tools being used in a project. These risks are often related to the complexity, unfamiliarity, or performance expectations tied to the technical solution.

Examples include:

• New or Unstable Technology: A team adopts a cutting-edge AI analytics tool that lacks documentation or community support, leading to integration challenges.
  
  
• Legacy System Integration: Connecting a modern payment system with outdated backend software causes frequent data mismatches.
  
  
• Performance Shortfalls: An app developed for users in Egypt fails to run smoothly on lower-end devices or slower mobile networks.
  
  
• Design Oversights: A major cybersecurity flaw is discovered late in development, requiring urgent rework to meet compliance standards.
  
  

Impact: Technical failures can delay project timelines, inflate budgets due to rework, or lead to stripped-down deliverables to meet deadlines. In short, they threaten the project’s performance and reputation.

How to manage them:

• Run feasibility studies and proof-of-concept trials before diving in.
  
  
• Use prototypes to test assumptions and get user feedback early.
  
  
• Stick with mature and stable technologies for mission-critical tasks.
  
  
• Implement rigorous multi-stage testing—unit, integration, performance, and user testing.

2. External Risks

Where they come from: These risks arise from outside the project’s control. They include economic shifts, regulatory changes, supply chain disruptions, environmental conditions, and geopolitical events.

Examples include:

• Regulatory Changes: New environmental regulations for construction in areas like Al Shorouk City demand a sudden switch in materials and processes.
  
  
• Market Shocks: A global tourism slump hits just as a hotel development project along the Red Sea enters the planning stage.
  
  
• Logistics Delays: A shipping bottleneck in the Suez Canal keeps crucial hardware from arriving on time.
  
  
• Extreme Weather: An unexpected heatwave in Cairo slows down construction activity due to reduced work hours.
  
  

Impact: These risks can derail the project entirely or force significant changes in scope and strategy. Since they’re largely outside the team’s control, they’re often the hardest to plan for.

How to manage them:

• Keep an eye on PEST trends—political, economic, social, and technological.
  
  
• Build contractual safeguards, like force majeure clauses, into vendor agreements.
  
  
• Develop contingency plans for high-impact risks (e.g. alternate suppliers or backup schedules).
  
  
• Maintain strong relationships with suppliers, regulators, and stakeholders for early warnings.

3. Organizational and Management Risks

Where they come from: These risks come from within the organization leading the project. Think of things like unclear priorities, internal conflicts, or a lack of executive backing.

Examples include:

• Lost Leadership Support: A key executive who backed your fintech project is reassigned, and their replacement doesn’t share the same enthusiasm.
  
  
• Competing Demands: Team members are constantly pulled away for other company tasks, causing resource strain.
  
  
• Vague Objectives: The project’s purpose isn’t clearly defined or clashes with broader company goals.
  
  
• Departmental Conflicts: Marketing wants one thing, IT wants another—and no one’s budging.
  
  

Impact: These issues slow down decision-making, cause team frustration, and weaken momentum. Over time, the project may lose relevance or simply stall due to neglect.

How to manage them:

• Create a clear project charter with stakeholder sign-off from the start.
  
  
• Secure strong executive sponsorship that lasts through the project lifecycle.
  
  
• Develop a stakeholder engagement plan to manage communication and expectations.
  
  
• Align project goals with broader organizational priorities and communicate their value clearly.

4. Project Management Risks

Where they come from: These risks are tied to how the project is managed. Even with the right resources, poor planning or weak controls can bring a project to its knees.

Examples include:

• Overly Optimistic Timelines: Underestimating how long tasks like construction or testing will take.
  
  
• Lack of Change Control: Stakeholders make frequent changes without formal approval, causing scope creep.
  
  
• Insufficient Planning: Failing to account for risks, communication, or quality in the Project Management Plan.
  
  
• Breakdowns in Communication: Important updates don’t reach subcontractors, resulting in errors and rework.
  
  

Impact: These are often the most avoidable yet most damaging. Poor project management leads directly to missed deadlines, blown budgets, and subpar results.

How to manage them:

• Use well-established project management methodologies (e.g. PMBOK, PRINCE2, Agile).
  
  
• Invest time in building a comprehensive project plan before execution.
  
  
• Set up a formal change control process to evaluate and approve every change.
  
  
• Leverage project management tools to track progress and keep communication clear.

5. Scope and Requirement Risks

Where they come from: These risks revolve around defining what success looks like. Misunderstandings here lead to delivering the wrong product, even if it’s delivered on time and on budget.

Examples include:

• Scope Creep: Stakeholders keep adding “just one more feature,” turning a simple app into an unwieldy product.
  
  
• Vague Requirements: Phrases like “user-friendly” are open to interpretation and lead to disputes.
  
  
• Gold Plating: Developers go beyond what was asked for, adding features no one requested, using up valuable time.
  
  
• Missed Dependencies: Overlooking prerequisites like safety inspections or legal approvals.
  
  

Impact: These risks stretch resources thin and can result in a final product that doesn’t solve the problem it was meant to address. Worse, it might not even be usable.

How to manage them:

• Create a Work Breakdown Structure (WBS) to organize deliverables clearly.
  
  
• Use formal techniques like interviews and workshops to gather accurate, testable requirements.
  
  
• Enforce a strict change control process to evaluate scope changes.
  
  
• Build a requirements traceability matrix to link each requirement back to business goals and deliverables.

Conclusion

Understanding project risks from their source is more than a theoretical exercise, It’s a practical way to improve project outcomes. By categorizing risks into technical, external, organizational, managerial, and scope-based types, project managers can proactively prepare for challenges rather than react to them after damage is done.

At South Europe College, our MSc in Project Management teaches students how to implement frameworks like these, equipping them with the tools and thinking needed to lead projects confidently in complex environments.