Some time ago Steve McConnell and I had an interesting debate, via his blog.  I suggested that when we combine estimates such as those we have in software (which have high uncertainty early in the project) with a competitive market containing price-sensitive customers; then market forces conspire to bias customers’ choices towards those supliers who… Read More

This page outlines one way to formulate Target Cost Contracts for agile software development. The goals of this approach are to: Share risk fairly between Customer and Supplier Give the Supplier the peace of mind of being protected from significant cost overruns Offer enough flexibility to get the best out of an agile development process… Read More

I’m debating an issue with Steve McConnell, over on his blog, and I’d like to hear what others think of the issue. I have a theory that, when multiple suppliers are competing for the same contracts, market forces encourage selection of those suppliers who have under estimated (either knowingly or unknowingly).  It’s some kind of… Read More

Many agile proponents advocate the “Cancel-After-Any-Phase” approach. Work is prioritised by business value and the customer can halt the project after any phase.  You can fix price or scope, but not both.  Most commonly, the price is fixed and scope is cut if necessary. This approach is a natural fit for most agile processes.  However,… Read More

While scope creep is doing more work than you expected, due to added scope; effort creep is doing more work without added scope.  You’re just taking longer to do the same stuff. Like scope creep, effort creep is inevitable and manageable.  To manage effort creep we need to understand what causes it.  Three major causes… Read More

Martin Fowler is well-known industry guru, respected by virtually everybody (including me).  He suggests you can’t use agile processes on projects with fixed price and scope.  Alistair Cockburn — who is a well-known industry guru, respected by virtually everybody (including me) — says you can.  To resolve this apparent conflict, we need to understand two… Read More

Awarding contracts to the lowest bidder is optimistic at best, dangerous at worst.  So why do we keep doing it? There are many reasons.  To pick just one: we believe it works in “real” engineering – making bridges, roads and buildings. But it doesn’t.  Although it is widely used in engineering; it’s not widely successful!… Read More

Can you use agile processes with traditional fixed price contracts, contracts where both scope and price are specified up front? Yes, you can use agile processes on fixed price projects. For instance, Crystal Clear was developed and tested on fixed price projects:… Read More

Do agile processes need flexible contracts? What about fixed price contracts? Fixed Price You actually can use traditional “fixed price” contracts on agile projects.  The catch is, they’re not necessarily the best option. Simple Time and Materials “Time and materials” contracts are another option. The customer pays by the hour, with no pre-arranged limit. This… Read More

“Conventional wisdom holds that specifying and controlling scope in a contract is necessary to protect an organization from self-serving behavior on the part of the other party. However, the effect of this protection is a sub-optimized value stream… The bottom line? Organizations that use outsourcing as a way to save money will save more money… Read More