Technology service providers are quick to advocate the virtues of agile development over more traditional waterfall methods. Agile development is an iterative, incremental approach where features are designed, built, tested and released through a short 'sprint cycle'. The sprint cycle is then repeated to release further features and extend earlier ones. This contrasts with more traditional waterfall development methods that involve a series of distinct stages through which the project progresses (analysis, design, build, test, implement etc), typically over a longer period and culminating in a larger software release of multiple features. The cited benefits of Agile include:
With the support of the service provider, business cases are developed that promise greater value for less cost and naturally, the service provider positions themselves as the delivery partner leveraging their own capability, capacity and toolsets.
Once the leadership team has bought in to the concepts of agile and its benefits there is a realisation that contracting for agile development in a way that realises the business case is difficult. How do you contract for the certainty required in a business case for a demand profile that will be out of date before the first anniversary of an agreement? An inherent challenge with outsourcing agile development, is ensuring that the service provider has a shared and enforceable responsibility for delivering the benefits case.
Key questions that executives should ask their commercial and contracting teams include:
Failure to address these points during contract negotiations may increase the risk of a service provider relationship that does not deliver the envisaged business case benefits and a lack of useful commercial controls to ensure performance.
Our Commercial Assurance specialists have many years’ experience in both the contracting and delivering agile engagements where the delivery model has a high dependency on third party service providers. We work with clients through the strategy, scoping and service provider selection and provide independent challenge and scrutiny during commercial and contractual negotiations. Our approach combines industry experience, best practice and assurance rigour applied to real life client situations. Our specialists will work hand in hand with client service delivery teams, procurement and legal advisors through these complex negotiations with a view to driving to a contract that converts sales promises into contract commitments.
Director – Commercial Assurance Technology and Utilities Lead, PwC United Kingdom
Tel: +44 (0)7881 612572