Outsourcing Contracts in Agile: Challenges and Solutions

Anabik is a project and program manager with 17+ years of experience.

Long-term, fixed-bid contracting is a challenge in the agile world, where only limited, near-term work (typically from two to four weeks) is planned and executed. The requirements and solutions evolve over time through the collaborative effort of self-organizing, cross-functional teams

The objective of this article is to review these challenges and derive a possible solution for contracting between outsourcing companies and client companies for agile projects. The review concludes that a hybrid contract is best suited for outsourced agile projects, where the first two to six months are executed with a time-and-materials (T&M) contract, and the rest in a cost-plus-award-fee contract.

Projects and Fixed-Bid Contracts
For decades, waterfall ruled the software development world (and projects in any world, for that matter). This is how most projects are still executed in the non-software world, be it construction of the world’s highest building or even a “simple” wedding.

In waterfall, the contracting approach is straightforward. After due diligence, the buyer (client) decides which product (with what features) or services it needs. It then requests proposals/quotes from sellers. The outsourcing companies (sellers) calculate the overall cost of executing the project based on the number of resources, total time required to implement it, complexity of …

Please log in or sign up below to read the rest of the article.

ADVERTISEMENT

Continue reading...

Log In
OR
Sign Up
ADVERTISEMENTS

"Only two things are infinite, the Universe and human stupidity, and I'm not sure about the former."

- Albert Einstein

ADVERTISEMENT

Sponsors