Is Risk Management Necessary in Agile Projects?

Is Risk Management Necessary for Agile Projects?

Projects fail because of risks that have become a problem, and this is also the case with Agile Projects. Risks should therefore also be a topic in Agile Project Management. In Agile Project Management one tries to reduce administration to a minimum and one assumes that already the agile method reduces risks automatically considerably. For this reason, Risk Management in Agile Projects unfortunately does not receive the attention it should. So what about Risk Management for Agile Projects? Can it be significantly reduced here? You will find the answer in this article.

Agility Reduces Risks – Is This True?

Let’s look at a few points you hear again and again about risks in agile project management:

The agile approach automatically reduces risks: This is partly true. For example, the danger of developing a product that not meets the markets requirements is much smaller with iterations and releases. Risks are also reduced through constant communication within the Scrum team and with the customer and through the Daily Scrums.

Risk management is covered by the impediment backlog: Not correct! The Impediment Backlog is a collection of current project problems. Impediments are problems that have to be solved. Risks are uncertainties that become problems when they occur. An impediment backlog does not help to manage risks, only problems.

Risks are avoided through close team cooperation alone: Partially true. The good and close collaboration in agile teams as well as working without constant disturbances reduces certain risks and promotes better project results.

Agile Project Management applied correctly avoids a certain part of the risks through its approach and close collaboration. However, most of the risks remain.

Here are a few typical risks which agile projects are confronted with and which do not disappear into thin air as a result of the agile approach:

  • The intended architecture or solution could not lead to success.
  • The product owner could neglect his tasks
  • The new developer may not have enough experience
  • Management may expect miracles.
  • The customer could go bankrupt during the project period.

I could list dozens of risks that also affect agile projects. Also agile projects are confronted with risks! However, some risks are reduced, e.g. by the agile approach, the close cooperation, sprint reviews and retrospectives.

New Ideas for Risk Management

Risk management in traditional projects could also be enriched with ideas from agile project management. Could a risk backlog help? The team could proactively address uncertainties and avoidable problems and also consider potential opportunities. What would it be like to evaluate effects in risk points? Or how about a round of risk poker to better approach the likelihood of occurrence or impact? The risk level of the project could also be presented in risk burndown charts. These are all methods that are already used in risk management in a similar way, but that may make them more attractive for agile projects.

Without Conviction it Makes No Sense

But in the end it’s always the same: Those who don’t see any benefit in risk management and are not convinced of it can actually save themselves this effort.

Wait, don’t give up! There are certainly some Scrum Masters who stand behind risk management and see value in it. As coaches and mentors, they can provide the entire Scrum team with a great benefit and convince it of risk management and lead the process – and thus agile projects become even more successful. Risk management doesn’t need to be expensive, but start with it and be convinced of its benefits!

In the next articles “How to Manage Risk in Agile Projects” I will show you how to efficiently implement risk management in agile projects.

Project-Risk-Management-Book-Cover

What experience do you have with risk management in agile projects? Do you agree with my statements or do you have a different opinion? Share your experience with the readers with a comment, so that we can all get to know another point of view. Thank you!

Would you like to learn more about risk management in projects or Scrum? My books on Project Risk Management and Scrum take you an important step further!

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Posted in Agile Project Management, Risk Management.

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