Agile Risk Management: Risk Management Framework In Software Development
Risk management in Agile development is often overlooked or misunderstood, but it’s a crucial part of delivering high-quality and safe software products. In industries like healthcare software development, where software is deeply integrated into medical devices and patient care, risk management becomes even more critical.
In this guide, I’ll walk you through an Agile approach to risk management, using Hazard Stories and a structured Risk Backlog, ensuring that risks are identified, tracked, and mitigated effectively.
Get to Know Agile Risk Management
Establishing the Context: Why Agile Risk Management Matters
Agile frameworks like Scrum and Kanban focus on iterative development, which means new features are added continuously. However, this also means that new risks emerge throughout development.
A good example is an eHealth application where patients can access their drug dispensation schedules. If such an app fails, the consequences could be severe – from missed medication doses to incorrect drug administration.
By embedding risk management into Agile workflows, teams can proactively address these challenges without slowing down innovation.
Risk Management Framework: The Agile Way
Risk management starts with identifying potential hazards. In Agile projects, this can be done in a Risk Identification Meeting, ideally after the first version of the backlog has been created. This ensures that teams have a clear idea of the product's functionality and domain before major architectural decisions are made.
Hazard Stories: Capturing Risks Like User Stories
One of the most effective Agile risk management techniques is Hazard Stories. These are structured similarly to User Stories but focus on identifying risks.
Format of a Hazard Story:
As a result of definite cause, uncertain event may occur, which would lead to effect on objectives.
For example:
As a result of a server outage, prescription data may not sync, which would lead to patients missing critical medication reminders.
By writing hazard stories, teams can clearly articulate risks, making them easy to discuss, prioritize, and mitigate.
Building a Risk Backlog: Structure and Ownership
Once risks are identified, they need to be tracked and managed. This is where a Risk Backlog comes into play. Think of it as a lightweight Risk Register, tailored for Agile teams.
What Goes Into a Risk Backlog?
Example Risk Backlog Table for an eHealth App (Drug Dispensation Use Case)
A Risk Backlog typically includes sections as:
- Hazard Story
- Risk Probability
- Priority
- Strategy
- Owner
- Product Backlog Task
- State
Example 1
Hazard Story: As a result of failure to sync with backend, outdated medication plans may be shown, which would lead to patients taking incorrect dosages.
Risk Probability: High
Priority: High
Strategy: Add sync retry logic and display last update timestamp
Owner: DevOps & Backend Team
Product Backlog Task: #SYNC-42 — Sync Error Handling
State: In Progress
Example 2
Hazard Story: As a result of unclear UI design, patients may misinterpret medication schedules, which would lead to incorrect administration of drugs.
Risk Probability: Medium
Priority: Medium
Strategy: Redesign UI for clarity and run usability tests
Owner: UX Team
Product Backlog Task: #UX-21 — Schedule Redesign
State: In Review
Best Practices for Managing the Risk Backlog:
- Store the backlog in the same tool as your issue tracker (e.g., JIRA) for visibility.
- Assign a Risk Owner to each identified risk.
- Regularly review and update the Risk Backlog as new hazards emerge.
- Keep discussions open and transparent—risk management should be a shared responsibility.
Evaluating and Mitigating Risks with Risk Matrix and ALARP
Once risks are logged, they must be analyzed and prioritized. This is usually done using a Risk Matrix, which evaluates risks based on likelihood and impact.
Once risks are logged, they must be analyzed and prioritized. This is usually done using a Risk Matrix and the ALARP principle, which evaluates risks based on likelihood and impact.
What is a Risk Matrix?
A Risk Matrix is a visual tool used to assess and prioritize risks by mapping them based on their probability (likelihood of occurrence) and impact (severity of consequences). It helps teams focus on the most critical risks that require immediate attention while deprioritizing lower-impact ones.
For example:
- High Probability + High Impact → Critical risk requiring urgent action.
- Medium Probability + Medium Impact → Tolerable risk that should be mitigated.
- Low Probability + Low Impact → Low-priority risk that can be monitored.
By using a Risk Matrix, teams can quickly assess the severity of different risks and make informed decisions on mitigation strategies.
Learn more about Agile risk management
The ALARP Meaning
A practical approach is to follow the ALARP (As Low As Reasonably Practicable) principle, which ensures that risks are reduced without overburdening the team.
- Unacceptable risks (High probability + High impact) should be eliminated or significantly reduced.
- Tolerable risks (Medium probability + Medium impact) should be mitigated.
- Broadly Acceptable Risk (Low probability + Low impact) should be monitored but not necessarily acted upon immediately.
By using ALARP, teams avoid unnecessary over-engineering while still addressing critical risks.
