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Risk Management in Scrum

29 Jan 2020

One of the most attractive features of Scrum as a framework is that its iterative approach enables you to dedicate continuous attention to risk and do well-informed and agile risk management.

Risk has that unnerving ability to creep into many aspects of development and project management. It can prevent you from delivering the right product teeming with value for users. What is more, we have to be aware of risks such as the possibility of blowing the budget. 

Lack of formal and deliberate risk management only adds fuel to the fire. It’s an avoidable misstep that hampers your prospects in the market. 

In this article, you will read about how Scrum accommodates risk management and how to do it the right way.

The Unholy Trinity 

Risk materializes in multiple shapes and forms. 

The complexity of the development and project environment is laden with uncertainty. You can’t afford to turn a blind eye to this fact of Agile life. The best kind of risk is the one that is transparent and manageable— in line with the core values and principles of Scrum. 

The three main categories of risk most Scrum teams will need to be aware of are:

  • Financial risk
  • Technical Risk
  • Business Risk 

The three types do overlap, but it still makes a lot of sense to separate them in risk response plans. 

Financial risk is rather self-explanatory. It echoes dilemmas regarding the ability of organizations to affordably create products. Moreover, it involves scenarios where expenses get inflated beyond the scope of what was planned. 

Secondly, technical risk is the danger of not being able to deliver on what was promised. Perhaps the tech stack isn’t up-to-date or the team skillset isn’t on par with the requirements. These are just a few examples of the most common culprits. 

As for business risk, it refers to situations where companies develop products that ultimately fail to solve problems for the target audience. They get poor reception and aren’t used at all. The bottom line is at stake once more. 

Not ignoring the financial risk

The first thing to do is to work out the costs of launching products, as well as making changes to them. Yes, it can be quite tricky to predict finances and resources upfront. In fact, many Scrum teams even skip this phase altogether.

We would still advise against such a hit-and-miss approach. You’re better off making at least rough estimates and fleshing them out empirically, over time. 

Likewise, make an effort to ensure everyone is clear on Scrum roles and responsibilities. Product Owner, in particular, is a pivotal role when it comes to planning and controlling the budget. 

Ameliorating the Business Risk 

In terms of business risk, the main boogeyman is the risk of developing subpar and irrelevant products. 

To minimize it, get the first release to users and gather their feedback early on. You can also conduct surveys to obtain valuable insights or sort user stories based on both their potential value and risk. Sprint Reviews are the perfect opportunity to get feedback from users. 

Carry out ongoing Product Backlog refinement and requirements engineering. Evaluate releasable increments regularly. You have to be able to course-correct without derailing the whole project or causing serious setbacks.

Also, take every opportunity to hold open conversations about work done and return on investment (ROI). Note that the Product Owner is supposed to monitor business risk, acting as a nexus between stakeholders and development teams. 

This individual communicates the overall vision and end goal of the whole project. 

The Technical Side of Things 

To navigate the minefield of decisions, you have to keep close eyes on technical issues as well. 

Namely, it would be wise to face them right away and ramp up general technical quality. Start by laying out the design and architecture, keeping the definition of done on the top of the mind.

Along the similar lines, confirm selected features are worth the effort. This is to say they need to add up to something and that something is ROI. 

For good measure, polish your definition of done, your software testing efforts, integration and validation practices. This will facilitate the process of maintaining the product over the course of the project and after the release. 

Remember that risk should represent a standard agenda item. In other words, you need to address the matter via events such as daily stand-ups, Sprint Reviews, and Retrospectives. Open the channels of communication and do away with silos. 

Finally, once identified, risks can be arranged according to seriousness and exposure level. 

We know this is a lot to handle. But, if you really mean business, throwing caution to the wind isn’t an option. 

In the Clear, At Last 

Eliminating the risk might be mission impossible, but you can analyze, calculate, and mitigate it. 

Wave sound practices into the very fabric of Scrum framework. Deploy action and response plans. Foster tight collaboration to cope with constant change and disruption.  

Handle the most probable and severe risks first. Get back to the drawing board or pivot in case you encounter major hurdles. Develop killer and maintainable products and champion innovation without breaking the bank.