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Identify and Reduce Agile Contract Risk

Discover the differences between Agile and non-Agile contracts and how to protect yourself.

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Contributors

  • Jeffrey Altergott, Senior Manager, Vendor Management, National Restaurant Association
  • Larry Millholland, Senior Manager US Procurement, PricewaterhouseCoopers
  • Sean Katzen, CEO, Ovations Group
  • Deon van Niekerk, COO, Ovations Group
  • Danie Jansen van Vuuren, CFO, Ovations Group
  • 5 anonymous contributors
  • Customer maturity levels with Agile are low, with 67% of organizations using Agile for less than five years.
  • Customer competency levels with Agile are also low, with 84% of organizations stating they are below a high level of competency.
  • Contract disputes are the number one or two types of disputes faced by organizations across all industries.

Our Advice

Critical Insight

  • Agile contracts require different wording and protections than traditional or waterfall contracts.
  • Agile buzzwords by themselves do not create an Agile contract.
  • There is a delicate balance between being overly prescriptive in an Agile contract and too lax.

Impact and Result

  • Identify options for Agile contract provisions.
  • Manage Agile contract risk by selecting the appropriate level of protections for an Agile project.
  • Harness the power of Agile development and collaboration with the vendor while preserving contractual flexibility.
  • Focus on the correct contract clauses to manage Agile risk.

Research & Tools

Start here – read the Executive Brief

Read our concise Executive Brief to find out why you should treat Agile contracts differently from traditional or waterfall contracts, and review Info-Tech’s methodology, and understand the twelve contract clauses that are different for Agile contracts.

1. Identify and evaluate options

Use the information in this blueprint and Info-Tech’s Agile Contract Playbook-Checklist to review and assess your Agile contracts, ensuring that the provisions and protections are suitable for Agile contracts specifically.

Guided Implementations

This guided implementation is a seven call advisory process.

Call #1 - Review definitions and glossary terms; discuss scope.
Call #2 - Discuss governance issues and concerns.
Call #3 - Review pricing methodologies.
Call #4 - Evaluate term and termination options.
Call #5 - Discuss key personnel concepts and potential deliverables categories.
Call #6 - Review acceptance and warranties.
Call #7 - Assess IP-related needs: rights and indemnification.

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Module 1: Identify and Evaluate Options

The Purpose

To understand Agile-specific contract clauses, to improve risk identification, and to be more effective at negotiating Agile contract terms.

Key Benefits Achieved

  • Increased awareness of how Agile contract provisions are different from traditional or waterfall contracts in 12 key areas.
  • Understanding available options.
  • Understanding the impact of being too prescriptive.

Activities

Outputs

1.1

Review the Agile Contract Playbook-Checklist.

  • Configured Playbook-Checklist as applicable
1.2

Review 12 contract provisions and reinforce key learnings with exercises.

  • Exercise results and debrief
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