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Implementing Scrum in fixed-price projects

Many organizations prefer Agile methodology for software development. These organizations may then not be comfortable in altering their approach in software development projects once a project has started. Agile methodology is a flexible and innovative method introduced for the practice of project management. There is a consensus across organizations that Agile will make the development process smoother and better. Owing to this many companies are looking for ways to use Agile methods not only to develop software but also to build customer satisfaction.

Clients get the following benefits using Agile for project management:

  • The possibility to get the value of the software quicker by implementing important end to end features up front.
  • The facility to delay/hold decisions on certain features.
  • The ability to prioritise features with more relevant ones even after the project has started.
  • The capacity to record the progress of the end to end functional feature earlier and the ability to provide feedback.
Scrum, a subset of Agile. is a lightweight process framework for Agile project development. Scrum processes are distinguished by specific concepts and practices from other agile processes.

Scrum process benefits the organization by helping it to

  • Improve the quality of the deliverables
  • Accumulate changes efficiently
  • Create better estimates
  • Better control of the project schedule and state
While scrum may have its benefits. It is also rife with challenges in projects with fixed parameters.

Challenges in applying scrum in fixed cost projects

Great expectations

Managing client expectations appropriately is the most important aspect in scrum for fixed-bid projects. Clients always want more for less and hence they have to understand that any changes in a fixed-bid project, where scrum is used, would add more processes, increase delivery time, and extend the budget of the project.

Changes


Agile is responding to change more effectively. This is where the actual problem arises in a fixed-price projects following agile methods. In a fixed-price contract the schedule, cost, and scope are fixed. When we follow agile, we are essentially saying that no changes will be entertained.

Clarity of requirements

Sometimes the product we are developing does not have adequate information. We can always modify/add more details in future as we are able to change the requirement at any time in Agile. But adding details later will cause a change in the price of the project. .Your team and your clients should be made aware of this addition.

Here's a look at how these challenges can be overcome.

Product backlog

Maintaining product backlog is the most crucial stage in working on fixed-price projects using Scrum. We should be focusing on detailing the scope with a clear description of accepted criteria. We can then start the statement of the work based on this document.

Prioritize

The product backlog will determine the order of tasks. Based on priority and impact to identify the critical features, set of features are evaluated. The most important features are moved to the top of the list.

Maintaining change requests

We need to treat change requests differently in agile approach which is designed to avoid change requests. Careful analysis of the change request is required as we have baselined all the requirements. We can then exchange requests to swap stories of similar sizes. While sizing and exchanging the user story, it's important to consider the impact of a new user story on the current design.

Moving from fixed scope to fixed budget/size

We should focus on changing the fixed scope into the fixed budget, i.e., changing scope within a defined size. For example: We can change a project with a size of 2,000 story points by replacing existing user stories with new user stories of a similar size.

Effective communication

In Scrum projects communication is the key to meeting demands of the client. Clients should always be notified of updates and progress of the project. Similar transparency should be maintained with your team members.

Conclusion

Applying scrum in fixed cost projects highlights a challenge in projects. Identifying the issues and channelizing the solutions is a mandatory step to ensuring the realization of the project. We should apply agile techniques for handling risk instead of avoiding them. Scrum framework can be applied to have flexibility to a fixed-price project, without tailoring its advantages, which can be amounted to the visibility and flexibility it provides to clients, and yet it has to be assessed for the effects it could have on a project.
Topics: Scrum project management

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e-Zest is a leading digital innovation partner for enterprises and technology companies that utilizes emerging technologies for creating engaging customers experiences. Being a customer-focused and technology-driven company, it always helps clients in crafting holistic business value for their software development efforts. It offers software development and consulting services for cloud computing, enterprise mobility, big data and analytics, user experience and digital commerce.