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Agile Quantitative Risk Management

 

SECOND EDITION

By Susan Parente

S3 Technologies, LLC

New York and Washington, DC, USA

 



ABSTRACT

In today’s world of fast paced technology and continually changing requirements and project scope, the need for Agile Project Management has greatly increased. This calls us to ask, how do standard critical project management methodologies like Risk Management fit into Agile Practices.

What is Agile Risk Management and when does it make sense to use it? How does Quantitative Risk Analysis relate to Agile and how it is incorporated into Agile Practices, will be evaluated? Recommendations for implementing Agile Risk Management will be provided along with best practices and how organizations are applying this into practice.

The nuances of how risk management is incorporated into agile practices are what generate project success. When requirements and environmental conditions are in flux, our ability to anticipate risk and plan for it, is critical to managing projects with agility.

OVERVIEW

The objectives of this paper on Agile Quantitative Risk Analysis are to explain what Agile risk management is, discuss risk analysis for Agile and provide recommendations for implementing Agile quantitative risk management. Lastly, the objective of this paper is to present risk as an opportunity to successful Agile project management!

With Agile project management replacing traditional project management in many organization and on many projects, it is important to understand how quantitative risk management is done in Agile projects.

WHAT IS AGILE?

In discussing Agile risk management, it is important to first clarify what we mean by Agile. Agile is a set of principles that guide teams and guide product development. It is a culture shift not a particular methodology or framework, but it consists of a number of methodologies and frameworks. Agile is a great solution for some types of projects but may not be the best solution for all projects. Agile entails open communication between teams, stakeholders, and customers. Agile is different from traditional project management in a number of ways, which will be detailed below.

Agile guidance consists of the Agile Manifesto and its 12 Principles, see the site www.agilemanifesto.org for the 4 values of Agile and its 12 Principles. Although Scrum is the most common framework of Agile, it is not by far the only framework. There are also other aspects of a project that make it an Agile project, versus a traditional project. These may include one or more of the following: rolling wave planning, iterative or incremental delivery, rapid and flexible response to change, and/ or open communication. Examples of Agile methodologies or frameworks include: Scrum, XP (eXtreme Programming), Lean and Test-driven Development (TDD), Kanban, and many others.

Why should you use Agile principles and practices for project management? Agile principles and practices are used to manage change, improve communication, reduce cost, increase efficiency, provide value to customers and stakeholders, and decrease project risk. One should consider an Agile approach when 1 or more of the following conditions are present:

  • Uncertainty (particularly in requirements and changing conditions)
  • Complexity (in content, integration, stakeholder management, or solution)
  • Innovation (new technology, content, or system)
  • Urgent (high priority or short timeline)

COMPARING TRADITIONAL TO AGILE

The triple constraint (time, cost, and scope) operates differently in traditional project management and Agile project management. Often quality is show in the middle of this triangle and Risk may be show as a cloud around the triangle, or in the background, as it is shown in figure 1 below.

More…

To read entire paper, click here

 

Editor’s note: Second Editions are previously published papers that have continued relevance in today’s project management world, or which were originally published in conference proceedings or in a language other than English.  Original publication acknowledged; authors retain copyright.  This paper was originally presented at the 5th Annual University of Maryland PM Symposium in May 2018.  It is republished here with the permission of the author and conference organizers.

How to cite this paper: Parente, I. S. (2018). Agile Quantitative Risk Analysis, presented at the 5th Annual University of Maryland Project Management Symposium, College Park, Maryland, USA in May 2018; published in the PM World Journal, Vol. VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Parente-agile-quantitative-risk-analysis-umd-paper.pdf



About the Author


Susan Parente

Washington, DC/ New York, USA

 

 

 

Susan Parente, PMP, PMI-RMP, PMI-ACP, PSM I, CSM, CSPO, CISSP, CRISC, RESILIA, ITIL, MS Eng. Mgmt. is a principal consultant at her company, S3 Technologies, LLC. She is a project engineer, consultant, speaker, author, and mentor who leads large complex IT software implementation projects, and the establishment of Enterprise PMOs. She has 19+ years’ experience leading software and business development projects in the private and public sectors, including a decade of experience implementing IT projects for the DoD and other federal government agencies. Ms. Parente is also an Associate Professor at Post University in CT. She has a BS in Mechanical Engineering from the University of Rochester in NY and has a MS in Engineering Management from George Washington University in DC. She also has a number of certifications, most of which she teaches and she is a CMMI and ISO 9001 Practitioner.

Ms. Parente is a Principal Consultant at S3 Technologies, LLC. Her company’s focuses on revitalizing projects through the use of risk management and implementing Agile practices. S3 Technologies does this by teaming with clients, stakeholders and vendors and using risk management and project agility to deliver project successes. Ms. Parente trains and mentors project managers in the areas of project management, agile project management, and risk management. She has developed a methodology which she uses to implement risk management programs for both small and large clients and is currently completing her manuscript for a book on implementing risk management.

Susan can be contacted at [email protected]

To view other works by Susan Parente, visit her author showcase in the PM World Library at https://pmworldlibrary.net/authors/susan-parente/