How do you manage risks in iterative and incremental lifecycle models?

1 Define risk criteria

Before you start any iteration, it is essential to define the criteria for identifying and evaluating risks. These criteria should be based on the project goals, scope, constraints, assumptions, and stakeholders' expectations, as well as the technical, operational, organizational, and external factors that may influence the system architecture. For instance, you should consider the probability of a risk occurring, its impact if it does occur, how long it is present or active, how soon it needs to be addressed, and how much you can influence or reduce it.

2 Identify risks

Once you have the risk criteria, you can use various techniques to identify the potential risks for each iteration. Brainstorming, for example, can gather input from the project team and stakeholders on possible risks. Additionally, checklists with predefined lists of common risks for similar projects or domains can be used. Interviews with experts or experienced practitioners can also help to identify risks they faced or anticipate. Assumption analysis reviews the assumptions made during the planning and design phases and tests their validity, while SWOT analysis analyzes strengths, weaknesses, opportunities, and threats of the system architecture.

3 Assess risks

Once you have identified the risks, you must assess them based on risk criteria. Qualitative or quantitative methods, or a combination of both, can be used to measure the probability and impact of each risk. These methods include the Risk Matrix, which plots risks on a grid according to their probability and impact levels; Risk Rating, which assigns numerical values or scales to the probability and impact of each risk; Risk Simulation, which uses statistical models or tools to estimate possible outcomes and consequences of each risk; and Risk Sensitivity Analysis, which evaluates how changes in risk factors affect system architecture.

4 Prioritize risks

Based on the risk assessment, you need to prioritize the risks according to their importance and urgency. To do this, you can calculate the expected loss or value of each risk by multiplying its probability and impact. Alternatively, you can combine the risk exposure with other factors, such as urgency or controllability, to create a composite score for each risk. You can also group the risks into different categories and prioritize them within each category. Lastly, you can use Risk Pareto analysis to identify the 20% of the risks that account for 80% of the impact or exposure.

6 Monitor risks

After you mitigate the risks, you need to monitor them throughout the iteration and the project. To do this, you can use a risk register to record the details and updates of each risk, a risk dashboard to create a visual representation of key risk indicators and metrics, risk reviews to discuss current and emerging risks with project teams and stakeholders, and risk audits to verify the effectiveness and compliance of the risk management process.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?