Agile Principles are Risk Mitigation Methods

Many risks of commercial software development can be mitigated by the principles of agile development:

Risk: The requirements of the customer are not covered completely. His expectations for example regarding usability have not been fulfilled. 
Measures: The product is developed incrementally, with the cycles being as short as possible. The result of each cycle is operable software, which can be checked by the customer regarding the fulfillment of his expectations. The customer, in particular his business and technical professionals, collaborate closely and intensively with the development team.


Risk: Objectives and requirements of the customer change, before the development is completed, for example as a reaction to unexpected market changes.
Measures: One principle of the Agile Manifesto is: “Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.” Thus, agile software development is generally characterized by the willingness to consider new or changed requirements. However, this does not preclude a consensus between the contract parties regarding the commercial effects of such changes. 

Risks: Wrong assessment of the development progress, delays due to communication problems, loss of know-how by staff turnover.
Measures: In agile development processes these risks are mitigated by a high level of teamwork. In short daily team meetings problems can be addressed, the progress can be estimated together, pending tasks can be assigned or even tasks in progress can be re-assigned if it seems reasonable. The avoidance of too rigid role and task assignments makes the team robust toward the loss of individuals. 

Risk: Additional expenses due to quality deficiencies which have been discovered too late. 
Measures: One characteristic of agile development are automated processes for the daily build of an executable system, where an initial code analysis is performed, followed by functionality checks of particular components using unit tests and, if possible, the execution of scripted test cases. 


Risk: Invalid planning of the manpower required to fulfil a development contract within the agreed time.
Measure: This risk can be countered by applying a cost estimation method with accuracy improving with every retrospective. Such methods are described in detail in my book "Cost Estimation in Agile Software Development".