Procuring for agile projects

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Scene-setting and the aim of this white paper

Traditional legal drafting likes certainty. It aims to nail down every detail or at the very least define the terms sufficiently to get a meaningful ‘fixed price’ from the market. But change happens on projects, and that means the parties can easily be drawn into fighting over the cost, timescale and the other impacts of the change rather than delivering what the client wants. This white paper uses the terminology of the APM Contracts and Procurement SIG’s (2017) APM Guide to Contracts and Procurement for Project, Programme and Portfolio Managers. It also loosely follows the same structure. Furthermore, traditional projects delivered under contract are often delivered late, with a ‘big bang’ coming all in one go. On a long project, this ‘big bang’ (whilst delivered to specification) could end up meeting outdated stakeholder requirements or using out-of-date technology.

It is for this reason that agile methodologies developed in the fast-moving IT sector have become popular in the last decade. In the IT world, there exists a set of well-defined methodologies known by the overall term ‘agile’ that are specifically designed to cover the efficient development of software (e.g. ‘scrum’). In this paper, we use the term ‘agile’ to have the more general, wider meaning of the word. However, the whole world – not just IT – is moving faster in a more VUCA (volatile, uncertain, complex and ambiguous) environment. Consequently, project delivery methods are becoming more adaptable and collaborative. As a result, delivery teams are prizing collaboration and iterative approaches where risks are evolving and outcomes are not easily specified. These trends can be summarised in a slide taken from the APM’s ‘Projecting the Future’ project.

The aim of this white paper is to outline how procuring and contracting approaches can be developed to facilitate and support a more agile approach in any sector where there is need for a commercial arrangement to deliver an unknown or changing outcome.

 

APM Contracts and Procurement Specific Interest Group

 

Posted on 31st Jan 2020
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