Agile Procurement and Dynamic Value for Money to Facilitate Agile Software Projects

In situations where software systems are developed under formal contractual arrangements it is common for the buyer and supplier to dispute whether value for money is being delivered, even though it is unlikely that either party will be capable of measuring this outcome. This problem is exacerbated by a basic incompatibility between the buyer's linear or sequential procurement process and the supplier's agile software development methodology. At the commencement of a software development contract it is probable that a supplier will have accepted terms and conditions relating to scope and price that are philosophically in opposition to agile principles, particularly in respect of an iterative elaboration of requirements. A range of suboptimal project outcomes, including budget and schedule blowouts, typically result in these situations. This paper proposes an agile procurement process that can operate in conjunction with an agile software development methodology to improve many aspects of software project delivery. This process is supported by a mechanism designed to give the buyer and supplier the ability to define and agree the value for money proposition at various milestones within the project _y namic value for money

1. Introduction

A review of studies of software project problems by Molakken and Jargensen's [1] supports the view expressed in the Chaos Report [2] that a number of specific problems are routinely identified. These include: poor requirements specification, inadequate user involvement, changing requirements, lack of executive sponsorship, poor project management and inaccurate cost estimates. Some of these problems (such as executive sponsorship and user involvement) stem from the relationship between the customer and supplier. Other problems arise when decisions are made using imperfect information and with poor definition of final desired outcomes [3].