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Minimize Risks by Following Scrum Principles

4 August 2015


I have been working as an Agile coach and ScrumMaster since 2010. During this time, I have had opportunity to mentor, guide, and lead various Scrum teams. Based on my experience, I strongly believe that each Scrum principle has built-in risk management capability.

First, let me describe briefly what I mean by risk and outline the Scrum principles.
 

What is risk?

A risk is an uncertain event that, if it occurs, has a positive or negative effect on the project objective. A risk is an event that may occur in the future. Risks with a potential for positive impact on the project objective are called opportunities, whereas risks that could negatively impact a project objective are called threats. Risks should be identified, assessed, and addressed based on the probability of an occurrence and the impact in the event of the occurrence.
 

Agile Manifesto

Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan

The following 12 principles of Agile Software are from the Agile Manifesto:
 

Agile principles

  1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
  2. Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.
  3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
  4. Business people and developers must work together daily throughout the project.
  5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
  6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
  7. Working software is the primary measure of progress.
  8. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
  9. Continuous attention to technical excellence and good design enhances agility.
  10. Simplicity -- the art of maximizing the amount of work not done -- is essential.
  11. The best architectures, requirements, and designs emerge from self-organizing teams.
  12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.
Being an Agile, iterative process, the Scrum framework inherently minimizes risk. The following Scrum practices support the effective management of risk.
 

Business environment risk

Business environment risk is minimized in an Agile project due to the flexibility of adding or modifying the requirements at any time. This helps with responding to external threats from the business environment and hidden requirements whenever they arise, with a low cost for managing the risk.

Apply Agile Principle 2: Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.
 

Feedback-related risk

Regular feedback minimizes expectations-related risk.

Iterative development, regular communication among the team, product owner, and other stakeholders will help ensure that the development of the product is in line with customer requirements. The customer is part of the Scrum team, so developers have the flexibility to clarify business queries and develop the product according to their vision.

This flexibility minimizes the feedback-related risk.

Apply Agile Principles 3 and 4:
  • Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
  • Business people and developers must work together daily throughout the project.


Estimation risk

The Scrum team takes ownership of estimating the stories and tasks in the sprint backlog, which results in perfect estimations and product increments that deliver on time.

Apply Agile Principle 14: The best architectures, requirements, and designs emerge from self-organizing teams.
 

Communication risks

The best communication method is face-to-face communication. It minimizes the risk of misunderstandings. You can convey your message and requirements effectively to others without any information gaps.

Apply Agile Principle 6: The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
 

Investment risk

Iterative delivery reduces the investment risk. Delivering value to the customer at every sprint continually throughout the project life cycle reduces the investment risk for the customer.

Apply Agile Principles 1 and 3:
  • Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
  • Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
All remaining principles are also directly and indirectly useful at reducing risks associated with a project. For example, Agile Principle 10 helps to identify waste, improves speed, and reduces complexity.
 

Opinions represent those of the author and not of Scrum Alliance. The sharing of member-contributed content on this site does not imply endorsement of specific Scrum methods or practices beyond those taught by Scrum Alliance Certified Trainers and Coaches.



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Comments

Tim Baffa, CSM, 8/5/2015 9:48:38 AM
I think it is always good to reiterate the Agile Manifesto and Principles. I believe that Agile/Scrum does an excellent job at mitigating or highlighting risk, but in my opinion it does not eliminate risk.

A couple comments:

- The customer is not part of the Scrum Team. They are a critical stakeholder to help the Product Owner formulate business priority and provide necessary feedback to the Team, but they are not part of the team.

- Perfect Estimation seems to be an oxymoron to me. They are estimates, some better than others, but always an educated guess by the Scrum Team. They are never "perfect".
Nagarajendra Kumar Tippa, CSP,CSM, 8/7/2015 12:50:48 PM
yes Tim, I completely agree with your statement Agile does an excellent job at mitigating or highlighting risk, but it does not eliminate the risk.
it minimizes the risk occurrence because we can find risks early.(fails fast) so we can take action to mitigate that.

1. Here customer means product owner.He only represent the voice of stake holder.

2. Yes I agree with you, perfect estimations are not possible but scrum team can give better estimates compare to other teams.

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