What is Risk Identification?

Risk identification enables the project experts to systematically recognize and record the potential threats to the project. This process prevents a serious impact of the issues or risks on the successful execution of a project. It allows us to predict the challenges and uncertainties before they materialize and become unavoidable in the project plan.

The risk identification not only forms the foundation of a Risk Mitigation plan but also ensures the involvement of the entire project team and stakeholders to collaborate to minimize the risks. In simple words, we can say that:

1. Risk Identification is the structured approach that includes analysis of various factors that impact the project execution. Also, it defines those risks on a parametric scale so that we face no issue in identifying what risks are more severe.
2. Defining the risks allows us to clearly define how the various members and stakeholders will contribute to the project plan execution according to the boundaries, constraints, and objectives.

Below is the table that shows various methods under the Agile Risk Identification Method.

Analyzing Project Scope

The project scope deals with the goals, deliverables, timelines, and limitations of our project. So before identifying what impacts our project, we must know what our project aims to accomplish. The project scope is what makes the project well-defined in terms of various parameters such as cost, planning, market share, target customers, etc.

You might be confused about why the project goal or scope is important for risk identification. This is because project goals or limitations may have ambiguity, conflict in the requirements, or unrealistic expectations. All these factors can lead to project risks. Hence, a detailed analysis of project scope factors is important for risk identification.

1. Project Scope Analysis is the process of clearly defining the scope, boundaries, limitations, resource limits, and other factors. Measuring these parameters helps us to deal with the controlled changes in the project and track the project tasks.
2. The critical factors such as budgetary constraints, resource availability, technical limitations, and external dependencies that majorly influence the project can be easily identified through scope analysis.

Identifying the Stakeholders

Stakeholder identification is the initial step in the risk management process. The reason behind this is we must know to whom we have to communicate and discuss the results of the risk identification process. Stakeholders may include team members, clients, end-users, regulatory bodies, etc. Apart from identifying the stakeholders, their roles, expectations, and influence on the project are also defined.

1. By understanding the interests of the stakeholders, we can make the risk identification more targeted. Thus, project teams know the risks associated with conflicting expectations, varied priorities, or external influences easily.
2. Stakeholder identification tells us about the project sponsors, team members, customers, suppliers, regulatory bodies, and other relevant parties. Using this, we do face challenges in task delegation.

Review of Historical Data

Drawing insights from past projects or activities is an important part of Risk Identification in Agile Methods. It allows the project experts to realize the inconsistencies in past projects and make better decisions for the current tasks. Thus, in this process, project experts identify patterns, trends, and common challenges that may reoccur in the current project. When we examine the historical data provided, we can easily define the criteria for success and failure.

1. Historical Data Analysis is the process of identifying the strategies that were effective in previous mitigation plans. With this, the Agile Project Team can easily perform valuable decision-making while defining the risks.
2. Historical Analysis helps us to identify factors such as frequent causes of delays, budget overruns, or scope changes, which may pose risks to the current project.

When the Agile project begins, the stakeholders and product owners focus on executing the project plan iteratively. However, they tend to ignore small mistakes which may lead to project failure. Risk is not like a big or significant error or bug. It is just a small issue that is not fixed on time, due to which it becomes a severe risk. Hence, it does not matter what Agile Methods we are using to deliver the project.

Whatever you implement should be risk-free so that stakeholders become satisfied with the project outcomes. So, let us learn how to identify the project risks, which is covered in part 1 of the Agile Risk Identification.