Flexibility in Agile Projects: Contracting Practices and Organisational Arrangements

The adoption of agile methods in software projects has been fast. The majority of new software projects utilises agile methods, and they have radically changed the internal dynamics of software development projects. This has created a need for adjustments in the management of software projects. The current literature rarely discusses the early phases of agile projects: contracting and organising agile projects. The literature also lacks investigations on the project management practices of agile projects.

This dissertation focuses on flexibility as it occurs in agile software projects. The main objective of this research is to explore the nature of flexibility in agile software projects and study the challenges of project contracting and management in leveraging agile development methods. The research was conducted as a mixed methods research. The research findings contribute to the emerging literature on agile project management. Secondarily, the results contribute to proactive contracting literature.

The results indicate that agile methods can be used to increase flexibility and efficiency in software projects, but flexibility needs to be planned by projects parties. This planning activity already starts in the negotiation phase, and it is optimally summarised in the project contract. Thus, it is also important that lawyers contributing to project contracts are aware and informed of the business contexts. The traditional project management approach needs adjustments in adopting agile practices. This research reports several categories of challenges faced in adopting agile practices and increasing flexibility in projects. The results also indicate that projects delegate part of the decision-making authority to implementation teams in order to increase flexibility. By taking some of the decisions closer to project implementation, flexibility can be used to manage uncertainties caused by a complex environment.