Agile v waterfall: how to choose the right development methodology for your software development contract

The basics

There are two main methodologies in the software development industry, which are reflected in software development contracts:

1. Agile - this is the most common methodology for software development and is generally seen as a more flexible and fluid mechanism for development, that allows for changes in the software and process used over time. With this methodology, customers can be more involved in the development process as agile focuses on continuous improvement and frequent testing. Agile teams work in sprints (short, specified periods (usually two to four weeks)) to complete set pieces of the project, allowing for regular feedback and adjustments; or

2. Waterfall - this is a more rigid mechanism, with key details being decided prior to the development process starting/continuing so that development is structured from the very outset. Waterfall is a linear and sequential approach to software development. Common phases include conception, initiation, analysis, design, construction, testing, implementation and maintenance. Waterfall is known for its thorough documentation and upfront planning, making it easier to predict timelines and budgets.

What is agile development?

The key features and benefits of an agile methodology in a software development contract are:

• Agile is an adaptable approach, allowing for evolving requirements, frequent feedback, and continuous improvement throughout the project.

• Development occurs in short iterations called sprints, which allows for more flexibility with deliverables for each project phase.

• Changes to the specification and requirements can be made throughout the project. The specification is initially defined but expected to evolve and be refined as the project progresses.

• Agile embraces a collaborative approach with stakeholders involved throughout the development process.

• There is greater visibility throughout the project. Regular meetings keep the team and stakeholders informed about the progress. Deliverables are provided at the end of each sprint, ensuring continuous feedback and value delivery.

• Agile promotes collaborative teamwork. It encourages cross-functional teams that collaborate closely on a daily basis. Communication is frequent, transparent, and involves all stakeholders.

What is a waterfall approach?

The key features and benefits of a waterfall methodology in a software development contract are:

• Waterfall is well-suited for projects with stable requirements, a clear scope, and a sequential approach.

• Development phases are linear and sequential - the next phase won’t start until the previous one has been completed.

• The specification is defined upfront and remains relatively fixed during the project, so any changes once the project starts are limited.

• The customer’s input is generally limited to acceptance testing at the end of the project, after the software has been developed.

• The project progress and outcome become visible at the end of the development cycle when the entire software is complete. There is limited visibility during the development process.

• There is usually a traditional hierarchical team structure with distinct roles and responsibilities. Communication is typically top-down, with limited collaboration between team members.

Comparison of the two methodologies

The table below highlights the key differences between the agile and waterfall development methodologies:

Choosing the right approach for your project

1. Assess your project requirements - consider the scope and requirements of your project. If you anticipate needing frequent changes and updates based on user feedback, Agile might be the more appropriate choice. If your project has clear, unchanging requirements, then Waterfall could be more effective.

2. Consider your team’s expertise - the experience and skills of your development team can also influence your choice. Agile requires teams to be very adaptable and communicative, with a strong emphasis on collaborative problem-solving. Waterfall, being more siloed and sequential, might be preferable if your team excels in environments with clear directives and less frequent changes.

3. Evaluate the client's involvement - determine how involved your client wishes to be in the development process. Agile requires active client participation, which can be beneficial but time-consuming. If your client prefers a more hands-off approach, Waterfall might be the better fit.

Whichever method you choose, it is important to clearly set out the methodology and agreed processes in your software development contract.

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