Transferring the benefits of Agile project management using Scrum to a firm-fixed-price context: a study of German software development projects
Student thesis: Doctoral Thesis
This research explores whether Agile project management, using the Scrum process framework, is perceived to be effective and efficient in the context of firm-fixed-price1 software development projects and, if the perception is positive, to understand why and how Agile project management is perceived to be beneficial within a firm-fixed-price context. To clarify this, the following research question is to be answered.: How can applying the Agile practices, values and principles of ‘communication, collaboration and short feedback cycles’ used in the Scrum process framework help project stakeholders to increase perceived effectiveness and efficiency in the context of firm-fixed-price software development projects? This research further explores if and how the Agile Scrum framework has to be modified in order to make it beneficial in firm-fixed-price contexts. Over the past few decades, Agile project management has proven to be a success factor in complex and dynamic software projects (The Standish Group, 2015; Tomanek, Cermak, & Smutny, 2014, p.550; Vlaanderen, Jansen, Brinkkemper, & Jaspers, 2011; Wilson, 2012) as it meets the customer needs of shorter time to market and higher flexibility of continuously changing business requirements. While Agile approaches often come with time and material contracts, firm-fixed-price contracts are quite common for software development projects. Firm-fixed-price projects are especially requested in public tenders or at large companies in order to reduce financial risk for the customer and to ensure that projects are chosen with the highest return on investment (Ambler, 2008a; Gaebert, 2014a). However, applying an adaptive Agile process to a firm-fixed-price contract exposes the supplier to a substantial financial risk (Fowler, 2001, p.16), which is why this has been avoided so far. Nevertheless, there is a demand among Agile practitioners to use Agile approaches within a firm-fixed-price context because of the expected benefits. Yet, still no substantial academic research has been undertaken so far in this research field. This thesis has now addressed these demands, using Scrum as an Agile representative, as it is considered to be the most widely adopted Agile method worldwide (Hoda, Noble & Marshall, 2011, p.522) and provides a well-defined process framework. The chosen research philosophy for this research is an interpretative one, as it suits well the exploratory and subjective nature of the research field. To answer the research question, an abductive approach was used with induction as the predominant approach. This resulted in a multimethod sequential qualitative approach with thirteen semi-structured interviews with Agile experts from Germany as the data gathering method for the first phase. In the second phase, the identified themes and patterns from the interviews were then discussed and validated in two guided focus groups, including eleven Agile experts in the first group and four Agile experts in the second group. The whole study was conducted in a cross-sectional time horizon to get a status quo in the researched field. The findings highlight that applying Agile practices, values and principles for ‘communication, collaboration and short feedback cycles’, using the Scrum process framework, to FFP projects a) is perceived to be beneficial (seven benefits have been identified), b) is perceived to increase the effectiveness (four measures of effectiveness have been identified) and the efficiency (four measures of efficiency have been identified) of projects, c) increases the likelihood of meeting stakeholders’ expectations within the project constraints, i.e. to be successful (see Chapter 1), d) needs modifications to mitigate these associated challenges (seven modifications have been identified to mitigate six challenges). As a result, the major contribution of this research to theory is a theoretical model which depicts these benefits and challenges and their impact on effectiveness and efficiency, including recommended modifications to mitigate the identified challenges. As a contribution to practice, the Scrum process framework has been adapted to fit in the context of German FFP contracts to increase the perceived effectiveness and efficiency of these projects. In addition, important points for clients’ obligations have been derived based on the modifications, which might serve as a checklist for practitioners.
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