Contracting Models for Agile Projects


Project Business Management


By Antje Lehmann-Benz

Munich, Germany



“Effectively, change is almost
impossible without industry-wide
collaboration, cooperation, and consensus.”
– Simon Mainwaring


When companies come together to do projects as customers, contractors, and in other roles, it is high-risk business for all parties involved. Often, this concerns agile projects as well.

Most agile methods and techniques pay little regard to cross-corporate team setups. Instead, they seem to have been described mostly for company-internal projects. However, the fourth value of the Agile Manifesto does urge us to consider “customer collaboration over contract negotiation”. With more and more project-related work outsourced, this addresses an increasingly undeniable reality teams face. Does this not mean that we should take a closer look at this often ignored aspect of agile project work?

The following article intends to clarify some facts around cross-corporate setups for agile teams in general and give suggestions for possible contract models.

Case Study

Sweet Taffy Inc. was developing a new HR software interface for their customer Cold Wax Ltd., a large car manufacturer with rigid procurement processes. They had agreed on a fixed price, and at this time, many unexpected problems had come up that made them invest much more effort than anticipated at the beginning. Sweet Taffy was looking at a potential loss situation, and to make matters worse, the customer had recently made deadlines tighter. When Sweet Taffy raised concerns about being able to meet this deadline given the unresolved issues, the responsible manager at Cold Wax told them: “Well, you’re probably not agile enough? Just have your development team work more agile and you will be faster.”

Overview: Agile Methods

Unfortunately, the situation described above is extremely common. In reality, of course, things are much more complex than that. Agile methods were not developed simply to deliver results faster. Instead, contractual models have to reflect the necessities of a given project situation.

In 1997, Ken Schwaber introduced the framework that he and Jeff Sutherland had recently developed at a conference for object-oriented programming called OOPSLA (Schwaber, 1995). The framework took some ideas from Lean manufacturing (Jansson, 2017) and translated them from production to (software development) project environments. Also, new ideas were added to accommodate for this environment’s realities and with hopes to mitigate the pain points many in the domain felt every day: Processes were too heavyweight for the complexity and uncertainties they faced, communication problems and disputes arose, features were developed that never got used later, reaction times to changing circumstances were slow, money and time was wasted, and teams felt they could not be creative or responsible for their own results. Schwaber and Sutherland hoped that by applying the principles and values of the Scrum framework and promoting its use also to stakeholders, while requiring a certain amount of discipline from the people in the project, such issues could be addressed more effectively.

The introduction of the Scrum framework marked the start of a series of events: In 2000, Kent Beck published his book “Extreme Programming Explained – Embrace Change” (Beck & Andres, 2000), and one year later, Beck, Schwaber, and Sutherland met with several others who had also been active with developing more “lightweight” management methods for software projects. They all had in common that they felt traditional project management tools were often too heavyweight and hard to adapt to the software domain. After all, this domain had been growing more and more complex, and still is to this day. Although as a tendency, complexity is increasing across all industries, software development experts were among the first people to experience this first-hand.

Figure 1: The Cynefin framework was used as a basis for this graphic. It attempts to help choose a suitable project management approach according to the uncertainty regarding technology and requirements in a given project situation (Wikipedia, 2019).

When the rather diverse participants of the gathering met in the winter of 2001 in a skiing resort in Snowbird, Utah, many of them thought this would not lead to “anything substantive”, as Alistair Cockburn put it (Beck et al., 2001). After all, they’d met before to loosely network and share and exchange ideas for lightweight software development processes. To call methods that would reflect these ideas “agile” did not go undiscussed—but in the end, not only that name was decided upon, but also something very substantive was indeed published and came to be known as the Agile Manifesto (Beck et al., 2001).

It consists of four main values and twelve underlying principles that have often been referenced since and hit a nerve in the software community. It could be referred to as nothing less than the start of a new era in software development, valuing


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Editor’s note: This is the 15th in a series of articles based on the book by Oliver Lehmann, “Project Business Management” (ISBN 978-1138197503), published by Auerbach / Taylor & Francis in 2018. See author profile below.

How to cite this article: Lehmann-Benz, A. (2019). Contracting Models for Agile Projects, PM World Journal, Vol. VIII, Issue II (February).  Available online at https://pmworldjournal.net/wp-content/uploads/2019/02/pmwj79-Feb2019-Lehmann-Benz-Contracting-Models-for-Agile-Projects.pdf



About the Author

Antje Lehmann-Benz

Munich, Germany




Antje Lehmann-Benz, MA, PMP, PMI-ACP, PSM is a project management and agile training professional for Oliver F. Lehmann Project Management Training, working with various training providers.  Recent experience includes:

Since 2017: Lecturer at the Technical University Munich, teaching Scrum Fundamentals to PhD candidates in Informatics

  • 2017: Agile training for a US military institution in Germany
  • 2018: Online PMP preparation training sessions for a global telecommunications company
  • Since 2018: Scrum trainer for a German car manufacturer
  • Since app. 2009: Project management and Scrum practitioner, consultant in the semiconductor and IoT industries (Atlassian JIRA / Confluence implementations)

She is also active as a volunteer for the Project Management Institute Southern Germany Chapter e.V. (Editor-in-chief, chapter magazine “PMI SG Live”; Director at Large for English Speaking Meetings in Munich). Active in 2016-2017 for PMI International as Subject Matter Expert regarding specific industry experience.

Magister Artium in linguistics, (M.A., LMU Munich), Antje holds the following certifications: PMI-ACP, PMI Agile Certified Practitioner (http://www.pmi.org); PSM, Professional Scrum Master (http://www.scrum.org); PMP Project Management Professional (http://www.pmi.org)

She can be contacted at [email protected]

To view other works by Antje Lehmann-Benz, visit her author showcase in the PM World Library at https://pmworldlibrary.net/authors/antje-lehmann-benz.