How do I transition from Waterfall to Agile without losing control of the project budget?

All answers to this question.

Have you looked into "Agile Contracts"? They are specifically designed to handle the iterative nature of the work while still providing some level of financial protection for both the client and the provider.

   Answered 2024-01-25 by Thomas Hall

• Thomas makes a great point. "Target Cost" contracts are popular in Agile. They allow for a shared-risk approach where savings are split if the team finishes early, but there is a cap on the total spend. This gives upper management the "Fixed Price" feeling they crave while allowing the team the flexibility to pivot based on user feedback. It really helps bridge the gap between the two worlds during a transition.

     Commented 2024-01-28 by Steven Scott

Focus on Burn-up charts to show progress against the total scope. It’s the best way to visually prove to management that the budget is being spent on actual working software.

   Answered 2024-02-02 by Barbara Adams

• I agree with Barbara. Visualizing progress is the best way to build trust. When management sees the velocity, they feel much more comfortable with the iterative spending.

     Commented 2024-02-05 by Susan Bennett

The key is to shift from "Project Budgeting" to "Value Stream Budgeting." Instead of a fixed price for a fixed scope, you budget for a fixed capacity over a set period (like a quarter). In 2023, I helped a finance firm make this switch by using "Guardrails." We defined a Minimum Viable Product (MVP) that was non-negotiable within the budget, and everything else was prioritized in the backlog. This way, the business always gets the most valuable features for their spend, providing a much higher and faster ROI than waiting for a late Waterfall release.

   Answered 2024-03-14 by Michelle Young