How do you align contract milestones with agile releases?

Aligning contract milestones with agile releases can be challenging, especially when working with clients who are used to traditional waterfall methods. In this article, you will learn some tips and best practices to help you create agile contracts that support your iterative delivery and foster collaboration with your stakeholders.

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1 What are agile contracts?

Agile contracts are agreements between a service provider and a client that reflect the values and principles of agile methodologies, such as flexibility, feedback, and value delivery. Unlike fixed-price or time-and-material contracts, agile contracts do not specify the exact scope, schedule, or budget of the project upfront, but rather allow for changes and adaptations based on the evolving needs and expectations of the client. Agile contracts also emphasize the importance of frequent communication, transparency, and trust between the parties, as well as the alignment of incentives and risks.

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2 Why do you need to align contract milestones with agile releases?

Contract milestones are predefined points in the project that trigger payments, reviews, or other actions from the client or the service provider. They are often used to measure progress, ensure quality, and manage expectations. However, contract milestones can also create conflicts or constraints when they are not aligned with the agile release plan, which is the roadmap of how the project will deliver value incrementally through iterations or sprints. For example, if a contract milestone requires a certain feature to be delivered by a fixed date, but the feature is not prioritized or validated by the client in the agile release plan, the service provider may have to compromise on quality, scope, or feedback to meet the milestone. Conversely, if a contract milestone does not reflect the value delivered by the agile release plan, the client may not recognize or appreciate the work done by the service provider, or may withhold payment or feedback until the milestone is reached.

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Tanya Thomas

Delivery Head Arch Technologies| Professional Scrum Master™ I Procurement Specialist | Customer Relations | Escalation Management |
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Aligning contract milestones with Agile releases helps ensure that both parties—the client and the service provider—have a shared understanding of project progress and deliverables. This alignment allows for better collaboration, transparency, and risk management throughout the project. Agile releases provide tangible results at regular intervals, making it easier to track progress and make necessary adjustments. By tying contract milestones to these releases, it becomes clearer when certain contractual obligations are met, which can help prevent misunderstandings and promote a smoother project execution.

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3 How do you align contract milestones with agile releases?

To align contract milestones with agile releases, you need to adopt a collaborative and adaptive approach to contract negotiation and management. Begin by establishing a high-level vision and scope of the project, using user stories, epics, or themes to describe the desired outcomes and benefits. Define the agile release plan with the client based on their priorities, feedback, and validation. Then, set contract milestones that are aligned with the agile release plan and reflect the value delivered by each iteration or sprint. Make sure these milestones are SMART (specific, measurable, achievable, relevant, and time-bound) and agreed upon by both parties. Review and adjust the contract milestones and the agile release plan regularly. Use agile ceremonies such as sprint planning and sprint review to communicate, evaluate, and improve project performance. Additionally, use change management processes such as change requests or change logs to document any changes to the contract milestones or the agile release plan. Finally, celebrate and reward achievement of contract milestones and agile releases as an opportunity to strengthen relationships between service provider and client. Use recognition, appreciation, testimonials, or bonuses to acknowledge value delivered by each party.

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4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Sagar Nikam

Head of Product - AI and Data | Advancing AI & Data-Driven Innovations | Business Intelligence and Data Analytics | Data Product Leader | Mentor | Speaker
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Aligning contract milestones with agile releases requires a dynamic approach, given the unpredictable nature of agile projects. To bridge this gap, I rely on metrics like Burn-up or Burn-down charts. These visual representations track project progress and velocity, aiding in defining realistic release timelines. Collaboration with the customer is crucial in this process, ensuring transparency and enabling prompt communication of any potential release date impacts. While it's challenging to predict exact scopes and dates, leveraging these metrics and fostering open dialogue equips both parties to navigate uncertainties and align contract milestones effectively with agile releases.

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How do you align contract milestones with agile releases?

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1 What are agile contracts?

2 Why do you need to align contract milestones with agile releases?

3 How do you align contract milestones with agile releases?

4 Here’s what else to consider

Agile Methodologies

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How do you align contract milestones with agile releases?

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1 What are agile contracts?

2 Why do you need to align contract milestones with agile releases?

3 How do you align contract milestones with agile releases?

4 Here’s what else to consider

Agile Methodologies

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