Lack of risk management is one of the main causes of project failure. A classic example for this would be the project my company executed before the formal PM processes were implemented. The project's core requirement was to generate reporting system for Medical Underwriting process. There was no Risk Planning for sure, otherwise the company would not have gone through two major design changes and the most worse cases of intra/inter department coordination and communication which was crucial for the success of the project.
There were two major risks that should have been identified early and risk responses planned therefore.
1. The reporting system was initially based on an existing data processing system that they found not adequate anymore for meeting the targeted needs. This issue was identified later after the BRD was laid out and there was little time to analyze and design a new data processing module to facilitate Medical underwriting. The strict deadlines lead to design of a quick and dirty data processing model. This would mean some critical changes to the normal work flow of the end users and was done without consulting the end users. No alternate designs were thought of and no risk was analyzed towards the effectiveness of the new design towards supporting the reporting requirements and that of usability.
The effect was that there were numerous issues that the development team had to deal with in order to make the new design sink with the reporting system. This incurred extra cost and development time. The user came up with usability issues because she didn't expect these changes from the normal work flow and wanted to make further modifications, which again affected project deadline.
2. The introduction of the new data processing system created new risks associated with extra coordination and communication between departments and between project team and the department leads. This situation was never addressed during the initial project phases and lead to severe penalties in terms of user dissatisfaction, missed project deadlines and eleventh hour code modifications.
How things would be done now?
This was the last project that I was a part before the new PM processes were implemented. So, if this project was executed now, I guess the requirements would be frozen before system design starts, risks related to each project activity would be analyzed and appropriate modifications would be made in the project schedule to account for risk response plan and contingency resources.