AGILE Projects and internal contracts

 A contradiction?



By Athenais Regnier

SKEMA Business School

Lille, France



The Agile Manifesto was published in 2001, setting up principles and values of a new project management methodology, opposed to traditional waterfall approaches and ideal for IT development projects: Agile. But this new methodology questions traditional service contracts.

This paper introduces a new way of realising internal contracts in order to fit Agile projects.

Different techniques will be proposed, analysed and compared: such as inverting the fixed and estimated parts of golden triangle          or including checkpoints and exit points in the contract.

We will see that the most efficient way of bringing flexibility to a contract is to base it on a flexible and mutually shared vision of the customer-supplier relationship.

Key words: Agile, Contract, IT projects, SLA, Internal contracts, Software development, SCRUM


The Agile approach was born because of a simple observation: in most cases, at the beginning of a software development project, the customer does not and cannot know what the final deliverable will be like. It was necessary to find a way for the customer’s needs to evolve along with the project, and to facilitate the interaction between the customer and the development team.

The Agile approach is more and more popular: in a study consisting of a survey on 601 software developers and IT professionals, “two-thirds described their company as either pure agile or leaning towards agile” (Jeremiah, J. (2016). Agile vs. waterfall: survey shows agile is now the norm. Retrieved from https://techbeacon.com/survey-agile-new-norm). This trend applies for both external and internal projects as Agile projects have proven to increase software quality and customer satisfaction.

Indeed, many companies in need of constantly increased performance ask their internal IT departments to adopt the Agile frameworks, the most widely used being Scrum and Kanban. But most of these departments are also asked to use internal contracts such as SLAs – service-levels agreements. The aim of these contracts is to make sure that both the supplier and the customer, seen as businesses within a business, agree on:

  • a deliverable (product or service)
  • a payment, for example by distributing a portion of the organization’s budget
  • a start date and a duration
  • accountabilities

However, the core principles of Agile methods are to prioritize customer satisfaction by early and continuous delivery of valuable software (working software is delivered frequently – weeks rather than months – and reviewed by the customer for improvement) and welcome changing requirements, even in late development. As a consequence, neither the customer nor the developer knows exactly what the final deliverable is when the contract has to be signed. Following this observation, buyers and jurists gathered and started coming up with solutions, and Agile development contracts started to emerge. But in reality, these contracts are not innovative legally speaking: they intend to adjust, in a formal way, the flexibility required for product requirements evolution. So, logically, it isn’t the contract itself which is “Agile”, but the customer-supplier relationship in fact is.

So how can we establish a contract without knowing what will be delivered? Isn’t it the core objective of a contract?


To read entire paper, click here


Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director, at [email protected]

About the Author

Athenais Regnier

SKEMA Business School
Lille, Fance



Athenais Regnier is a 21-years-old French graduate student preparing two diplomas: a 5-year degree at engineering school Centrale Lille and a Master of Science of Project and Programme Management and Business Development (PPMBD) at Skema Business School. She belongs to the ITEEM department of Centrale Lille, where engineering, management and entrepreneurship are combined to train future managers with a solid technical background as well as an innovative, adaptable and ingenious spirit. This spirit is consolidated by 17 months of internship experience throughout the 5 years of education.

Specialised in information systems architecture and processes optimisation, she has previous experience mainly in web development and IT project management. She has lived for 9 months in Auckland (New-Zealand) where she worked as a project management intern in local company Kiwise Digital. Responsible for the development of a WordPress e-commerce website, her main missions were to import data from Excel spreadsheet and WooCommerce plugin (CSV Import Suite), optimise processes in the project especially data-entry, train new team members and report to the client.

Class delegate during her entire post-graduate education, Athenais has also been involved in several school projects including an innovation award-winning project in 2014 consisting of presenting an innovation for a radio-controlled car after realising a complete technical and market analysis. Her third-year project was to redefine school-companies relationship in her region of Nord-Pas-de-Calais and, as part of this project, her team organised an event with 50 professionals and about the same number of students where each team member managed a facilitated workshop to lead participants in innovating on the subject.

Athenais has a passion for horse-riding, she has participated in jumping and equestrian vaulting competitions for many years. She has been a junior champion of France of team vaulting in 2007, at the age of 11 years old.  She can be contacted at [email protected]