Everything You Need To Know About Risk Management in Scrum

Anyone with a scrum master certification knows that agile methods are relatively new when it comes to project management. One of the basic aspects of an agile workplace is that teams produce work in short cycles that are known as sprints. Every team member works towards highlighting important issues, makes a hierarchy of important tasks and schedules the less important ones in the next cycle. This approach is gaining momentum in organizations as it has been seen that agile teams have high success rates than teams that opt for traditional ways. Most of the traditional methodologies place a lot of importance on Risk Management but agile approach focuses towards simply managing risk.

Learning about Risk Management Methodology

Let’s have a look at the whole process that would help people who want to become a scrum master or are currently enrolled in a professional scrum master certification:

• Identify
• Classify
• Quantify
• Plan
• Act
• Repeat

Risk means that there are still chances of failure as it’s basically factors that can affect the result of a project. Risk management helps teams to control the affects of risk. There are several things that can go wrong in a project, which is why it is important to have plan B.

Identify

The first thing that you need to do is assess the dimensions of risk, as it tends to have two dimensions. The first dimension consists of harmful or helpful factors that affect the outcome of the projects. Helpful factors are those that move the project forward, whereas harmful factors are those that hinder the result. The second dimension is finding out the source of the risk. Is it internal or external in nature?  Internal factors are those that exist inside the organizations, whereas external is outside and can’t affect the project.

Once these dimensions are integrated we get the SWOT analysis that gives us strengths, weaknesses, opportunities, and threats. We use strengths and opportunities to our advantage, but what about the weaknesses and threats?

Examples of Weakness

• Aggressive timeline
• Insufficient resources
• Lack of a disaster recovery plan
• Lack of skills
• Lack of stakeholders
• Limited budget
• Technological uncertainties

Examples of Threats

• Changes in the economy
• Changing landscape
• Changing legislation
• Economic uncertainty
• Geopolitical tensions
• Pandemics
• Trade tariffs

Classify

These risks need to be classified according to their likelihood and severity of impact on the project. Some of the risks that companies face revolve around timeline, budget, privacy, security, and resources. Some of the risks can be easily dealt with; it’s the serious ones that need more attention.

Quantify

The next step is to quantify the risks. One important thing to know is that scrum is team work, so it is important that all the members of the team contribute something. It is important to discuss all the risks as a team, so that potential solutions can be proposed.

Impact

Impact of the risk tells us about how much it affected the project. It is generally rated on a Likert scale from 1 to 5, where 1 being minimum and 5 being the highest.

Probability

If there is something that has a high probability, it is important to bring that to the team’s attention. Similarly, if there is something that doesn’t need a lot of attention, point that out as well. You need to focus on things that are urgent and important.

Plan

So, you have learnt about the different threats and how intense they are. Now what? Well, now you plan. Risk planning needs to be comprehensive so that you can assess each and every factor If at any point you feel stuck, make sure to reach out to your team members.

Act

Act simply means that it is now time to take action. It is important that you deal with high risk items first. Yes, this had to be said because most of the people tend to delay the high risk items until the very end. This may not sound like a big deal but it is exactly why projects fail. You made a hierarchy earlier on, so it is highly recommended that you take that into account while planning things.

Repeat

It is important to know this process so that it can be easily performed. One should identify the risks right at the start and then use the appropriate mitigation strategies that would decide the implementation of the project. There will be a lot of trial and errors initially, but once it will be done in the right manner, it will be a cycle of assessment and action that would help organizations in identifying and eventually minimizing risk.

You need to have an effective risk plan that needs to be regularly reviewed. One good way to go about is to discuss this in the sprint meetings, as this way everyone will be on the same page and will be able to pitch in their two cents.

Learning about Effective Risk Management

Effective risk management consists of the following things:

• Identifying the risk at an early stage so that it can be dealt with accordingly.
• Analyzing each risk in depth in order to determine its severity.
• Prioritizing the risk, so that they can be easily dealt with.
• Having an action plan to deal with high priority risks.
• Doing continuous monitoring to make sure that the action plans are effective in nature.

If you are interested in learning more about scrum, you can enroll yourself in scrum master certification programs. These programs will help people to learn about identifying risks, rating them and then keeping a track on them during sprint executions. One of the reasons why Agile methodology is becoming so famous all over the world is because it reduces risk in the early stages and allows teams to be prepared for the worst.