Agile is a relatively recent project management style that seems at first glance to be at odds with traditional project management thinking. Why stick to rigid contracts and processes when you could be more flexible to the needs of the project, the relationship and the end user? Typically adopted on engineering and IT projects, agile project management can also be employed across a broad spectrum of other project types to achieve rapid launch capability, adaptable methodology, and more ‘relevant’ results.
Managing Agile Projects
Agile projects necessitate a very different approach, requiring much closer working relationships between clients and their suppliers, permanently open lines of communication between aligned partners, and planning to help manage envisioned risks.
An example of the benefit of this management methodology would be the development of a new IT solution for servicing a general public need. Over the years that the new system is being developed there will be significant potential for changes in tastes, trends and technology. More rigid traditional project management methods could end up delivering what was requested but not what is needed. Agile project management has been designed to adapt to a volatile project environment, to provide what’s required, not necessarily what was contracted for at the outset.
Traditional contract management can be quite prescriptive, with processes, systems and KPIs set at the very start and often stuck to throughout. Fortunately, an increasing number of people now adopt the sensible strategy of regularly reviewing their contractual agreements and the realities of their relationships, allowing for realignment and KPI alterations if necessary. But agile contract management offers even greater flexibility. At their core are more regular reviews to determine the strengths and weaknesses of both the project itself and the relationship, helping to focus those involved, in driving innovation and added value throughout the project. This is only possible in a working relationship where there is a good degree of commercial trust and collaboration.
Mitigating the Risks of Agile Project Management
There are of course many risks associated with this approach to contract management, so here are four tips to remember when considering the Agile contract management methodology for your project.
1. Is agile project management right for your needs?
Whether or not agile project management is appropriate for your needs will be determined by many factors – how clearly you can envision the outcome of your project, the clarity with which you can visualise how you are going to achieve this result, and the complexity of the project.
Agile project management comes into its own where there are unknowns that could limit your ability to contract for a fixed solution or process, or where the outcomes are subject to changes outside of your control or predictive ability.
2. Resourcing with foresight
The flexible nature of agile project management has a downside, and that is most evident in the unpredictability of the demand for resources – including personnel, budget and technology. Estimations are essential, but it will be your supplier’s experience and the solidarity of your collaborative relationship that will determine how well these estimates mirror reality.
At a tender stage, your provider should be able to provide you with fairly accurate immediate cost estimates and then it will be down to everyone’s foresight and experience to determine the accuracy of future costs and needs.
It is important that both sides adapt their working relationship and communication style to the demands of an agile project. Surprises are likely, and budgetary issues are inevitable. Recognising that this is the road you have chosen to take and making every effort to mitigate risks is crucial. Take the time to talk to your outsourced partner as soon as an issue is recognised so that a solution can be negotiated.
3. Agile project specific contract formation
Choosing this form of project management necessitates a deliberately different approach to contracting for it. Agile project management involves an iterative work process, with each iteration often involving a section of the project that needs to be completed before the next can be started. At each new step, the validity of the previously assumed plan of action for the entire project should be assessed and the outcome re-reviewed to ensure that the relationship is heading in the correct direction.
This ‘trigger’ for the review between iterations ought to be built into any contractual agreement the parties sign. Given the dynamic nature of the agile approach to project management, it is vital that the agreement is regularly reviewed to ensure everything is aligned and that everyone has what they need to reach their intended outcomes.
4. Contract administration is as important as its makeup
Spending time developing the perfect contractual agreement with the ideal provider adds little value if it’s not administered correctly. There will be times when a vendor should be offered praise and financial bonuses to incentivise their best performance, and there will be times when penalties should be employed or that they should be reminded of their responsibilities under their agreement. Those ‘times’ are determined in the agreement, and they should be adhered to.
It is just as important that both parties know and understand their roles and responsibilities in the relationship and that those roles and responsibilities are maintained throughout. Deviation, for instance, the client team getting too involved in how the project is being delivered, can affect the integrity of a contractual agreement, the trust of a provider partner and the stability of a working relationship.
There will be times where going down the agile project management route will be the best option for your project, but there will also be times when to do so will endanger its chances of success. So, before you do, consider thoroughly whether it truly is the best form of project management for your needs. Conduct all the due diligence you can to estimate the resources you may need despite the inherent unpredictability of this strategy; work hard to build strong, collaborative relationships with your providers and to keep lines of communication wide open. Finally, form and manage relevant and clear contracts that offer clear lines of delineation for all parties.
Photo credit: iStock