Delivery

Running agile delivery inside a fixed budget

Fixed budgets and iterative delivery are compatible if scope is the variable. Fixing all three is what causes trouble.

Key takeaways

  • Fixing time, cost and scope makes quality the hidden variable.
  • A value-ordered backlog makes stopping at any point acceptable.
  • Contract discovery separately from delivery increments.
  • Report what works in production, not percentage complete.

Fix two of the three

Time, cost and scope cannot all be fixed without quality becoming the variable, and quality is the one nobody agrees to sacrifice explicitly.

Fix budget and date, keep scope negotiable, and prioritise continuously. Most organisations can accept this once it is stated plainly at the start rather than discovered during delivery.

Prioritise ruthlessly and continuously

Order the backlog by value so that if delivery stops at any point, the most valuable work is done. This makes a fixed budget safe: you get the best available outcome for the money rather than an incomplete everything.

Re-order as understanding improves. A backlog fixed at the start encodes the least informed view anyone will ever have.

Contract for the shape of the work

  • Fixed price for discovery, which is bounded and well understood.
  • Costed increments for delivery, with a stop point at each boundary.
  • A change process that shows cost before acceptance.
  • Explicit agreement that scope is the flexible variable.

Report against value, not tasks

Reporting percentage complete against a fixed task list encourages the appearance of progress. Reporting what now works in production is harder to misrepresent and more useful.

Demonstrating working software each increment keeps the conversation on outcomes and gives stakeholders real information for the next prioritisation decision.

Handling change requests fairly

In a fixed-budget arrangement, change requests are where relationships are tested. Handling them mechanically rather than emotionally keeps things straightforward.

Assess the change, state its cost in time or scope, and put the decision to whoever owns the budget. The answer may be to proceed and drop something else, to defer, or to decline — all are legitimate.

What causes trouble is accepting changes informally without cost, then reporting a schedule problem later. Making the trade-off visible at the moment of the request keeps the client in control.


Frequently asked questions

Suppliers confident in their delivery generally prefer it, because it removes the risk premium a fixed-scope price must contain. Suppliers who insist on fixing everything are pricing that risk into your budget.

Fix the discovery deliverable and the first increment precisely, and describe the ongoing arrangement as a costed framework. Most procurement processes can accommodate this.

With value-ordered increments it should not, because each increment is deliverable. Half-finished features indicate increments were sized too large.

Working on this?

A conversation with our team, no charge and no obligation.

Book a conversation