Successfully Execute Fixed Price Agile Projects
We all know that Agile Methodology is a mindset, an approach or a culture. It is more about individuals and interactions rather than about the tools and the processes. One of the twelve principles of the Agile categorically encourages the developers to welcome “changing requirements, even late in the development.”
While an enterprise wants to develop bespoke software solution through the agile methodologies, it also wants to have clarity on all the aspects of the software development. The very meaning of agile is to be “able to move quickly and easily.” Agile processes are all about fluidity while the enterprise obviously cannot operate in absolute fluidity. So I am writing this blogpost to discuss about is Scrum a good choice to successfully execute fixed price Agile projects.
What is fixed price project in Agile?
Fixed price project is a quite self-explanatory term. In this model of software development, the enterprises require planning, strategizing, and inherent control over the processes that they want to execute. They want clarity on whats; whys; whens; wheres, and hows of any software development project.
A fixed price Agile project involves:
All these are decided at the outset of the project. Any change in any of these would invariably affect the entire project and its fixed price model. The changes in agile processes would occur inevitably as the customer needs and market expectations are always in flux.
Enterprises often prefer to choose fixed price Agile projects to protect themselves from these deviations, inherent in all agile methodologies. They often assume that fixed price model means fixed timeframe and also fixed scope of work.
However, any sensible enterprise would also always want to meet customer and market expectations. They cannot afford to sacrifice their product at the altar of their notions of fixed price agile projects.
So, is it possible then that an enterprise’s budget and time constraints can be effortlessly managed along with the inevitable deviations during the course of the agile projects? Well, the answer to this question is YES. Let us explore how.
Major challenges in the seamless execution of fixed bid Agile projects
The major challenge in successfully implementing agile projects with fixed price model lies in the perception of both agile methodologies and fixed price model of the project.
Lack of clarity on Product Backlog Items (PBIs)
The agile culture believes in no waste. Therefore, the team is trained to not to work on anything extra or more. This approach is fraught with misunderstanding.
When there is only a one-liner backlog item, “just enough, and elaborate later” mindset leads to underrating of the items. This happens because:
Requirements set at the beginning of the fixed bid agile projects are often unclear or ambiguous one-liners.
Teams interpret these one-liners based on their experiences or skills. Most often, these interpretations prove to be undersized.
This underestimation then results in teams working overtime.
New changes in the middle of the project
The world of technology is constantly changing. Sudden or new changes in the middle of the software development cycle are natural and inevitable in the fixed price contracts in agile processes. When there is such a change:
Enterprises assume that agile estimation for fixed price projects already takes into consideration such changes at no extra cost or time.
Teams often feel constrained in the implementation of these new changes in the absence of authority or liberty to modify cost and time limits.
There is an obvious gap between the product functionality and the market expectations and customer requirements.
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