Blog: Risk Management in Agile Initiatives

June 18th, 2019 by inflectra

The principles of risk management play a pivotal role in the project management framework. While the principles of project management do not specifically recommend waterfall approach, some agile practitioners incorrectly disassociate from the principles of project risk management in agile approaches to product development or project management.

Is Risk Management required in Agile Initiatives?

Risk is defined as an uncertain event that can either positively or negatively impact the project objectives. Is such an uncertainty avoidable just because one follows agile? For example, experiments tried in an iteration need not always be successful or prove to be promising for subsequent iterations to benefit from the results of the experimental spikes. Therefore, regardless of the framework used in either project management or product development, if we can relate to definition of risk, it is impossible for one to disregard risk management principles even in agile framework. Consequently, many agile practitioners incorporate risk principles within the agile context in the form of risk-adjusted product backlog.

Risk Management Life Cycle

The risk management life cycle includes an approach to how risks will be managed throughout the project life cycle. This plan-risk-management process provides the risk management plan defining how to conduct risk management. This approach still applies in the agile framework on how the agile team will conduct risk management activities throughout the initiative. Consequently, the features and user stories can also start identifying the risks incorporating the risk register elements and subsequently impeding the team’s ability to deliver in the product backlog.

Subsequently, the team can be proactive in categorizing several risks in the risk register. Some of these risk categories can be commercial risks or compliance risks where external environmental factors can be identified and assessed so that the features identified for the release plan for the minimum viable product can be aligned to the strategic measurable organizable value. Such identified risks can be measured to build the contingency reserves at the iteration and release levels. Furthermore, the number of risks (both threats and opportunities) can be tracked across the iterations in the form risk profile chart (also known as risk exposure chart). This risk profile chart is represented in the information radiator as a burndown chart that can help with prioritizing features as well as getting the required support from management in the form of resources and capital funding.

This identification of risks can facilitate the team to proactively assess the essential support such as process value and technical value stories required to support the features forecast in the future. Furthermore, the same assessment can also get support from risk owners outside of agile team to support the agile team’s objectives. Such identification and analysis of risks can help prioritize the minimal marketable features in iteration planning as well as appropriate disaggregation of user stories setting up the iterations for success.

Extending these approaches further, continuous monitoring of risks and identification of secondary risks throughout the daily standup can help with the contingency plans to ensure that the team is supported to meet their commitments. This practice can empower the team to raise risks in advance refining the product backlog so that subsequent iterations are positioned to accommodate steps to address these risks. The risk responses steps can be part of the task breakdown during pointing or estimation exercises during iteration planning so that the team maintains a sustainable pace of appropriate value-added user stories.

As one can see, risk management principles undoubtedly impact agile approaches. If you want to learn more about the risk response strategies as well as other approaches to categorize risk and increase risk transparency across the agile release plans, please check out the webinar archives or sign up for Inflectra's On Demand Webinars on Agile Management.

Dr. Sriram Rajagopalan is a project management guru with extensive software development and project management experience in many industries. Dr. Rajagopalan lead Inflectra's agile project management webinar series called: Deeper Dive Into Agile: Practical Tips On Managing Agile Projects