How Agile Makes Project Risk Management Easier

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By: Sagar Sharma

How Agile Makes Risk Management Easier

Software projects have conventionally been plagued by several risks forcing them off-schedule, over-budget and out-of-scope. Agile project management reduces this risk exposure by providing higher visibility and faster results to business owners. However, before we explain how exactly Agile mitigates Risks, it is important to have a general definition and brief understanding of the traditional risk management practices.

What is Risk

A risk is generally defined as a set of “uncertain conditions” which can together or individually have a definite measurable impact on at least one project objective. Some of these “uncertain conditions” are listed below:

Internal Uncertainties

Resource: The team size proves to be insufficient to meet the project goals.
Time: The timelines are not realistic or have been revised to such a level.
Budget: The allocated budget is insufficient to meet the project goals.
Skills Mismatch: The team does not have the required skills.
Lack of Clarity: There is a lack of consensus among stakeholders.

External Uncertainties

Disruption: A new technology might jeopardize the current technology investments.
Regulatory Landscape: There are challenges in meeting compliance.
Competitive Landscape: There are challenges in generating value proposition or USP.
Government Policies: Restrictions on outsourcing, higher trade tariffs.

All these conditions have a certain likelihood or probability of occurrence. Further, their individual impact also varies. The product of probability and impact defines the risk exposure level for a project.

Impact x Probability = Risk Exposure


In the traditional waterfall methodology management of risk was a major concern for project owners. The process frameworks in waterfall used to put perpetual pressure on teams to complete requirements and design even before starting any development work. This would translate into an opaque working environment where project owners were unable to attain any value from the ongoing work. Further, the long feedback and change management cycle used to deter business owners from recommending any changes.

Hence, Risk Management was recognized as an essential process for systematic identification, assessment, and mitigation of project detriments that if not addressed in time would damage the project beyond repair. Nonetheless, even this process involved significant time investment, documentation, and maintenance of a risk register. Complex CPM methods, mindmaps, and PERT charts were often used for estimation and risk management purposes.

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How Agile provides implicit management of Risks

Agile methods implicitly manage risks where blockages or project impediments are identified in standup meetings on an ongoing basis. It is generally accepted that the short duration sprints effectively break down risks and provide an opportunity for their early mitigation. Risks are also minimized with the involvement of cross-functional teams that maintain a predictable project velocity with continuous feedback and transparency at all times.

Therefore, most project managers usually do not see any major value in assessing and documenting the risks elaborately in Agile project management. However, you can keep a simple risk register with limited fields for your reference. This could include a small description of the risks, their probability, impact, action items, and the final status. Further, you can also quantify risks for dealing with them in a prioritized manner.

Risk mitigation with Burn-Down Charts


A major part of traditional software project management involved tracking of schedule and cost overruns. The accuracy and frequency of these tracking measurements used to depend on the size of the project. As discussed, Agile makes this tracking easier. With burn-down charts, project managers can get a daily assessment of effort and schedule. These charts provide easy visibility into project progress and any major deviations from the ideal velocity help in early identification of issues/risks.

As discussed, the onus of identifying risks in Agile is shifted to the team members. Major risks can be discussed in the sprint review or sprint retrospective sessions. The retrospective session can help all stakeholders in identifying lingering issues and select the best way forward. Further it provides clarity for better planning on risks to be mitigated in the future sprints.

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It is seen that organizations are often wary of engaging with a new software development firm because of their inability to gauge their risk exposures. There is no way to ascertain if the vendor would be able to deliver quality results in a timely fashion. Paradoxically, the only definite way to quell these apprehensions is to start working with the vendor.

At Credencys, the Blueprint workshop addresses such concerns for our new clients by introducing them to our work approach. Blueprint is a 15 day collaborative workshop which helps our clients create a roadmap for their application development starting from building a proof of concept to creating clickable prototypes and MVPs.

Credencys Solutions Inc is a leading mobile applications development company and solutions provider. You can contact us for mobile strategy consulting and developing mobile apps for multiple platforms. Subscribe to our blogs for getting similar articles on software project management, strategy, leadership and more.


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