Top Project Risk Number 2: Time and Budget Risk

“Will it be ready for Christmas?” 

Just about every client I ever met has wanted to know the answer to this question. Will it be delivered in the time frame and budget that were promised?

Time and budget are very closely related. While there are other factors, cost usually depends mostly on the number of people involved and on the length of the project.

Time and budget risk mitigation in Scrum

You can deliver to a deadline with Scrum or other agile frameworks. A fixed price is easy to achieve if you limit the time on the project but leave the scope open and definable in the project.

Scrum mitigates time and budget risks by breaking down functionality into small pieces, implementing must-have features before nice-to-haves, and having a shippable version available at least once per sprint.

In Scrum, the Product Owner has the option at the end of every sprint to deliver, to continue funding and developing, to deliver and continue developing, or even to abandon the project.

Phased development contracts mitigate budget risk and keep stakeholders in the loop. As a rule of thumb, no more than 70% of the functionality (weighted by estimated effort to produce) should be considered ‘must-have’.