TechRadar addresses one of the trickiest challenges around Agile projects – how to price them. In a marketplace where it’s more common to set a defined price for a defined set of requirements, it’s important for Agile providers to understand the various approaches for pricing their projects as accurately as possible.
From the article:
The flexible and changeable nature of agile means it doesn’t lend itself well to fixed price, yet many procuring organisations still want the certainty of knowing what they’ll get and how much they’ll pay. This is closely linked to the fact that many organisations want the benefits of agile, without fully understanding what’s needed to achieve them.
A prime example of where this went wrong last year is the UK government’s Universal Credit programme, which attempted to use agile, but wasn’t supported by the right structures, processes and contracts that would have helped make it a success.
The reality is that while agile has matured over the last decade, these processes, structures and contract types have lagged behind. Organisations that understand the requirements for successful agile projects will also understand that agile and fixed price contracts don’t go well together, but until this sentiment is shared across an entire organisation, businesses bidding for agile contracts must be flexible in their pricing method. At the same time, all involved – in procurement and delivery – must understand the implications of each approach.