Monte Carlo simulation in SCRUM?

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Monte Carlo simulation is one of the tools that traditional project management uses to manage the risk behind the Iron Triangle of time, cost and scope.

Other factors have to be introduced like Quality & Risk.

So in order to manage the risks of cost and time, one of the techniques consists of the Monte Carlo simulation.

I really think that we could debate for quite a while on this matter, but using those techniques in Agile and SCRUM environment is, in my opinion, not really required simply because by essence and nature of the SCRUM framework those risks are mitigated.

However, it could help to provide some figures for some organizations, which could provide them with a certain degree of confidence re the team capacity, and possibly for the team itself.

In addition, if we have enough historical data, it could help to provide an estimation on how much work has been completed over a certain amount of sprints. For example, by indicating the percentage of completed story points over a certain number of predefined sprints.

Actually this thinking has come out of a LinkedIn® conversation that a friend who used to be more “traditional” project manager had with someone else who questioned the need to have a project manager in a SCRUM / AGILE environment.

One of the arguments was that SCRUM does not provide Risk analysis and there was a lack of awareness about Monte Carlo or Tornado graphs.

I gave the topic some thought. Whereas in PRINCE2 training, there is more focus on the governance of a project rather than the tools which might be used and, conversely, a methodology like PMP focuses more on a set of best practices but does not emphasize the importance of governance.

After some consideration and research, I can demonstrate that that the Monte Carlo simulation technique could effectively be used in the field of SCRUM.

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