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How to evaluate a contract for your Agile project

Commercial contracts can take many forms. What are the contract alternatives that are suitable for agile development projects?



For any contract, I would look at:
What are the intended benefits?How is the contract structured? What are the basic rules for delivering scope and invoicing revenue?How does it apportion Risk and Reward between customer and supplier? How does it handle decision making and changes in requirements? What model of customer relationship does it foster: competitive (my win is your loss), cooperative (win-win), indifferent (I don’t care-you lose) or dependent (heads-I-win-tails-you lose)?  If I did not draft the contract, I would also look for traps - contract negotiation can be a competitive game. One place to look for traps is language that you do not understand. Another place is references to laws that you may not be familiar with. The question is what do you do if you find a trap? Try to get it taken out, or accept it and move on? Let's just call this a '…

The financial risks of customer and contractor

How is is the risk profile of building a runway different from developing a smartphone? For a contractor providing services the risk and reward profile is completely different than for the developer of a product.

The airport will be responsible for that runway long after construction is finished. For them, that runway is a product, even though, unlike a smartphone, it will not have to be reinvented next year. It may need maintenance, but that is a small effort compared to the updated smartphone.

When developing a product, you are investing today in the hope of a return tomorrow. At the beginning you lose money, but you expect to get a return on your investment. This can be the more profitable approach because your revenue is not directly tied to the cost of production, but you have to finance the investment and might lose the up-front costs if you are not successful.

Your fundamental risk is that you won't get the return you had hoped for. This might be caused by “delivery risk”…

Should your endeavor be considered a project?

The Project Management Institute defines a project as “a temporary endeavor undertaken to create a unique product or service.” Projects are different from other ongoing operations in an organization, because unlike operations, projects have a definite beginning and an end - they have a limited duration.

This definition leaves open whether the final result is knowable in advance. Consider two projects:
Resurface, extend and equip the main runway so that an Airbus A380 can take off or land in 95% of the weather conditions experienced at that location. Create the next generation of our smartphone so that it will increase our market share this Christmas. In the first case, the parameters are mostly knowable in advance, assuming you have access to the data. The weight, dimensions and take-off and landing performance of the aircraft are documented; airport elevation, winds, temperature and other weather data are available; the ICAO defines markings, lightings and other norms for instrument …

What does a Sourcing Manager need to know about Scrum?

By the time the project gets to the Scrum Master, most of the important decisions have already been taken.
-- Janani Liyanage, Enterprise Agile Coach 

Regardless of whether you are a Key Account Manager preparing a quote, a Sourcing Manager preparing a tender, or a General Counsel defining standardized contracts, if you want to contract effectively for a Scrum project Qit is helpful if you understand the basics of how Scrum works, and how it is different from classical approaches.



Scrum is a simple, team-based framework for solving complex problems. Although it was initially modeled on successful patterns of developing products before software was a thing, Scrum was created for and is widely used for developing software products. You can use it for other complex endeavors.

Scrum was a founding member of a larger family of methodologies, known collectively as “Agile Frameworks”, which share common values and principles centered around learning, collaboration and purpose. These values a…

What is the purpose of a contract?

"Procurement and Sourcing teams need to develop commercial models enabling Agile delivery. Putting a price or paying for something when it is not known what will be delivered requires a leap of faith for executives and CFOs to approve. Contracts should be negotiated in an agile way."
-- Martin Stark, IT Strategic Sourcing Manager
What does a Client Service Manager or Purchasing Manager need to know about contracts? What does a Client Service Manager need to know about software development, Scrum and "Agile"? What does a Scrum Master or Scrum Product Owner  need to know about contracting? 
As a customer or supplier of software services at the beginning of a software development project, you know that there is too much at stake to work with just a verbal agreement. Although the Agile Manifesto values customer collaboration above contracts, contracts are often necessary when working with external suppliers, if for no other reason than to ensure a common understanding …

Ten contracts for your next Agile project

As a customer or supplier of software services at the beginning of an Agile software development project, you know that there is too much at stake to work with just a verbal agreement. Although the Agile Manifesto values customer collaboration above contracts, written contracts are often necessary when working with external suppliers. What do you need to know? How can the contract help you achieve a good result? What are the traps to avoid?

Ten years ago, I wrote an article for AgileSoftwareDevelopment.com called Ten Contracts for Your Next Agile Project. Artem Marchenko, the founder and editor, was really enthusiastic about this article and pushed me to make it thorough, well-researched and well-documented. This article became a popular reference. I was invited to speak about the ten contract forms at the Munich Scrum Gathering in October 2009. And I was thrilled to see the search autocomplete suggest the title after typing just “10 contracts.”

Alas, ASD is no more, but various peop…