Typical Risks in Agile Projects and How to Avoid Them

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71% of companies are utilizing a methodology commonly referred to as "flexible" or Agile. Most outsourcing projects are executed using this approach. These methods are known for their high level of adaptability. Contractors often tailor them to meet different customer needs. Outsourcing companies tend to even label themselves as "Agile-oriented" and highlight this model to their clients.

Despite the US government's investment in IT projects, they have incurred a financial loss of $32 billion due to project failures. 

Experts from the software development company Belitsoft describe the common issues in Agile projects and recommend how to prevent them.


Budget risks.

It can be challenging to thoroughly predict the cost of developing a new product in the early stages. Agile methodology accommodates frequent changes to the product based on customer and market demands. Therefore, a client may find that the expenses have exceeded the initial estimate.

How to prevent

To manage costs, a contractor can propose adopting a LEAN development approach. The team breaks down the work into smaller steps and modules to provide more accurate estimates. Additionally,  a supplier can use Rolling Wave Planning, which involves making decisions and providing estimates once all the requirements are clear. To achieve that, it's necessary to implement best practices in business analysis and teamwork to help clients find optimal solutions and access the efforts more precisely.


Scope creep risk.

This risk refers to the potential for changes in the project scope during development. It can result in alterations to timelines, changes in deliverables, and increased budget requirements.

How to prevent

To prevent scope creep and meet project deadlines, break the development process into multiple phases, such as MVP, 1.0, 1.1, etc. This approach helps maintain a relatively stable scope for each version while still allowing for adjustments as needed.


The failure to adhere to Agile principles.

This risk involves attempting to implement Agile methodology while adhering to traditional management principles and approaches.

How to prevent

If clients are uncertain about their understanding of Agile/Scrum principles and values, a contractor can explain and teach them how to apply them correctly. Also, a supplier can keep track of how clients implement these practices and provide guidance during the process if necessary.


Agile methodology is not appropriate for a project.

Agile methodology is not universally applicable to all types of projects. Some projects require a more traditional management approach similar to the Waterfall model.

How to prevent

If a client wishes to use Agile methodology for a project that is unsuitable for it due to reasons such as a clearly defined scope, fixed budget, or specific requirements, a contractor has to make efforts to persuade them to consider another approach that would be more beneficial. The recommendations should be based on common sense, business requirements, and project details.


Lower predictability.

The agile methodology involves frequent changes, making it difficult to make long-term predictions. Additionally, it can result in shifting deadlines and potential reputational damage for the vendor.

How to prevent

Again, break down projects into smaller phases, carefully define requirements, and provide estimates for a delivery time, budget, and necessary resources. This approach enables clients to understand when they will receive the next iteration of their system and at what cost. Using this strategy, a contractor can maintain a high level of client satisfaction.


What are the potential risks for a vendor using Agile/Scrum methodology?

Lack of sufficient knowledge of Agile/Scrum.

In order for Agile/Scrum to be successful, it is important to have team members who are knowledgeable about the methodology. Without this expertise, the software development team may encounter difficulties during the project. Additionally, the skills of each team member should be taken into consideration. If someone lacks the necessary experience or training, it can hinder the benefits of using Agile.

How to prevent

To prevent this issue, make sure to assemble a team of competent developers who comprehend Scrum and its principles. If some team members lack experience, they should seek assistance from their peers. Motivate and facilitate knowledge sharing and mentorship to educate and guide the developers. Regular retrospective meetings encourage the practice of continuous improvement.


A sudden stop of work.

This risk can occur when the product is no longer in demand in the market or when the original goals were not set properly. This situation can lead to a sudden stop in the work, which requires extra efforts from the company and resource managers to avoid idle time.

How to prevent

Before the developing stage, a contractor needs to conduct a discovery phase to gain a deeper understanding of the product, its purpose, and its functions. A team of business analysts has to provide clients with advice and suggestions on how to enhance the product and deliver more value to the end users and the market. Throughout the development process, a vendor should maintain constant communication with Product Owners and support them in finding optimal solutions if necessary.


Technical debt.

Modifications to a project can result in alterations to its source code, which may generate technical debt, quality issues, or degraded system performance.

How to prevent

At the outset of a project, establish non-functional requirements, such as performance and quality. Then, create a system architecture that is suitable for meeting these requirements, employing techniques like modular architecture or microservices. To ensure the quality of the final product, each task or user story is accompanied by its own acceptance criteria and definition of done. For particularly complex projects, utilize multiple stages, including a pre-production phase.



Agile is effective only when a project fulfills all certain conditions:

- a cross-functional team composed of highly skilled professionals;

- active client’s involvement and their consistent willingness to collaborate with the team. 

Agile is based on the principle of close communication and collaboration with the customer, which enables the use of Agile methods to reduce documentation and deliver high-quality software in a shorter timeframe. This approach ensures that businesses pay only for the results that are valuable to them.

In fact, most projects are not strictly Agile. Rather, each project consists of a collection of iterative processes with unique requirements, goals, and development approaches. Well-experienced contractor strives to integrate the benefits of various methodologies, including Agile, into software development. This approach allows a truly flexible and reasonably priced solution.

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