Agile Contracts

Benefits of agreeing on the implementation of closed projects with Agile methodologies

The most complicated part of the life cycle of a project is to establish a contract between a customer who wants a product or a digital solution and the company that provides the service.

On countless occasions, compromises have to be made on deliveries, functionalities, performance levels or absence of bugs that will happen many months after the contract is signed. This is accentuated by the fact that project requirements evolve over time and require a high capacity for adaptation.

There are many cases in which the developed product does not match in all its details with what was agreed in the contract. This requires the team to make unintended over efforts, and in return the clients are often unsatisfied because their functional and temporal expectations are not met.

Complex Processes

The development of digital products and services is a purely human process, defined and implemented by people. It requires knowledge, with a high intellectual workload, which makes it a process where uncertainty is inevitable. Historically, this uncertainty has been covered through a protection of the main resources, which can even be oversized.

The adoption of an Agile philosophy to deal with this type of project as a whole drastically changes this perspective. Contracts do not disappear: they are transformed into Agile contracts that reduce their importance in exchange for greater commitment, transparency and collaboration with our clients.

The contract is created with requirements, a budget and a fixed duration. And, as far as possible, the development team weighs the functionalities and requirements that appear in the contract. In the same way as it will do with the backlog entries during the execution of the project. In the event that the development team is not available, or has not yet been decided at this point in the project, the joint review of this weighted list of requirements will be one of the first activities to be performed.

New Approach

At the beginning of the Agile development, the involvement of the customer allows these initial requirements not to be immutable. In fact, it is expected that they are not, and can be exchanged for other requirements of equivalent weight. Always in a transparent and collaborative manner.

We are inclined to incorporate a security layer to the scope initially specified in the contract. But with this new approach, this becomes a benefit. The client is guaranteed the product obtained at the end of the process will be the one with the highest possible business value. And in the event that this layer is not used, there will be no additional cost to the customer.

Agile Contract vs Time and Materials

Agile Contracts are not to be confused with a working environment based on Time and Materials. In our case, the commitments made to our customers are constant, before and after each iteration, and are much stronger because they are more realistic and involve all parties. It could be seen as the replacement of a long-term contract by multiple contracts reflected, on the one hand, in the BackLog and, on the other hand, in the Sprint meetings, both for planning and review.

In short, the Agile Contract paradigm is based on interchangeable initial requirements, a constant increase in value, a continuous evaluation of the product or service and an absolutely transparent collaboration framework.

These paradigm shifts lead us to achieve a different way of defining and approaching projects. Using agile contracts, putting collaboration before contracts and focusing on the value of the results.