Agile risk management

http://institute.agileriskmanagement.org/
Copyright © 2014. All Rights Reserved.
Agile Risk Management
Agile Consortium Belgium
12.05.2014
Dr. Alan Moran
(IARM, Managing Director)

About the IARM
• The Institute for Agile Risk Management (IARM) is a Swiss based
institution that exists to promote the principles and practices of agile risk
management.
• Focus primarily on research and training activities through a network of
third parties in the agile and academic communities as well as in the
private sector.
• Publication of books and whitepapers on agile risk management and
related topics as well as appearances at public events and conferences.
• Further details can be found at http://institute.agileriskmanagement.org/

My Biopic
http://www.linkedin.com/in/agility
Experience spanning nearly two decades of working
in both public and private sectors. Currently
employed as an IT Manager in the Swiss public
sector and as Managing Director of the IARM.
Dr. Alan Moran MBA CITP
AgilePM, DSDM Adv. Practitioner, Scrum PSM

Understanding Risk: Social Media Example
I was nearly finished my test when all of a sudden I was kicked out of the
system and had to enter a code to get back in (which I don't have!) I can't
restart and there is no help whatsoever! How can I get back into the test
or get my money back!!
Sorry to hear you are having problems,
we'll get right on it now!
Wow! That was a lightening response! Thanks so much! I was able to
finish the test - and passed!!! Money well spent! Thanks so much!

Risk Defined
Risk is “uncertainty that matters”, i.e., uncertainty that if realised impacts one
or more objectives in either a negative (i.e., threat) or a positive (i.e.,
opportunity) manner.

Nature of Risk
• Risk culture, attitude and tolerance are defining elements of organizational
character.
• Like change, there is advantage to be found in embracing risk.
• Risk is inherent, residual and secondary
and all are intertwined in a complex
web of causality!

Agile and Risk
• “A project risk is something that may happen and, if it does, it will have a
detrimental effect”
• Risk is “an exposure to a potentially negative outcome”
• Risk in the context of projects with “dynamic requirements” with
“customers [who] need a new system by a specific date” that is a “new
challenge for your software group”
• The “first iteration will immediately expose the risks, wherever they may
lie”

Sources of Project Risk*
Requirements Technical Project
Schedule Supplier People
*Research based on IT project risk excl. enterprise risk which
includes systemic financial and L&C risks.

Why Risk (Management) Matters
Not focusing on risk in projects exposes them to the following shortcomings:
• Inability to make informed risk and reward decisions.
• Failure to identify appropriate risk response strategies based on risk exposure.
• Lack of oversight in risk monitoring.
• Poor understanding of when to engage in risk activities.

Agile Risk Management Process

Principles
Transparency Balance Flow

Roles
Risk Manager Team

Objectives, Context and Risk Environment
Environment
Context
Objectives

Risk Scoping

Risk Tailoring (XP)

Identify Analyse
TreatMonitor
Risk Management
Key is how to incorporate agile practices and values!

Risk Management: Identification
Exploit agile team structures to involve appropriate stakeholders and use the
agile approaches to group discussions (e.g., facilitated workshops).

Risk Management: Risk Log Artefact
Timebox Name:
Timebox Objectives:
Timebox Start/End Dates:
ID Description Classification Likelihood Impact Score Strategy Priority Measure
Residual
Likelihood
Residual
Impact
Residual
Score
Notice anything different compared with a traditional risk list ?

Risk Management: Risk Analysis
• Risk Exposure comprises of the following components:
– Likelihood (proxy is frequency with respect to a fixed time period)
– Impact (e.g., financial, reputation, affected customers)
– Proximity (implicit at the iteration level)
• Use T-shirting sizing against agreed scales if possible and endeavour to be
robust (e.g., use ranges)

Risk Management: Risk Scoring
1
2
4
66

Risk Management: Response Strategy
This is the MOST critical point in the process from a social and cultural perspective.

Risk Management: Cultural and Social Influences
There are many humanist aspects to risk management that agile project
managers need to be aware of:
• Personal attitudes towards risk.
• Risk typologies (e.g., cultural theory).
• Risk compensation effects.
These become particularly important when balancing personal and
organisational risk in culturally mixed or geo-dispersed teams.

Risk Management: Risk Typology

Risk Management: Cultural Uncertainty Avoidance*
* Data sourced from The Hofstede Centre
(http://geert-hofstede.com/)

Risk Management: Response Treatment
• The following options are available:
– Tasks for the iteration backlog.
– Risk tagging.
– Contingency planning (conditional tasks on the backlog).
– Avoidance.
• Risk Log records risks but responses are found on the backlog or Kanban.

Risk Management: User Story Map
User story map approach for rendering risk
distribution.
• U1: mixture of risk activities and agile practices.
• U2: relies solely on agile practices.
• U3: worth considering if the same amount of value
can be achieved with less risk.
Do you see something that might cause you concern ?

Risk Management: Backlog (Scrum)

Risk Management: Timebox Plan (DSDM)
Timebox Name:
Timebox Objectives:
ID Description Acceptance Criteria MoSCoW Comments Assignee Type Status
R
isk
Tagging
ArchitecturalS
pike
Business
Process
M
apping
C
oding
Standards
C
ontinuous
Integration
Facilitated
W
orkshop
M
odellingPairProgram
m
ing
Prototyping
Q
uality
Function
D
eploym
ent
R
efactoring
Sim
ple
D
esign
Static
C
ode
Analysis
TestDriven
D
e
U
sage
S
-
-
-
-
-
-
-
-

Risk Management: Risk modified Kanban

Risk Management: Monitoring
Reduction a consequence of risk management activities but some systemic risk
always present reflecting project context and risk environment.

Risk Walling
Use Risk Walling to solicit and encourage continual feedback!
Timebox Name:
Timebox Objectives:
ID Description Classification Likelihood Impact Score Strategy Priority Measure
Residual
Likelihood
Residual
Impact
Residual
Score

Become Involved!
Find out about forthcoming events (e.g., public talks, conferences, trainings)
http://institute.agileriskmanagement.org/ or follow us on LinkedIn
http://www.linkedin.com/company/institute-for-agile-risk-management/
Learn about agile risk management
http://institute.agileriskmanagement.org/publications/
Tell us about your experiences and let us know if we can help you!

Agile risk management

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