Fixed Price Distributed Agile Projects in Outsourced Product Testing – An Experience Report

Agile Software Development and the breed of Agile Methodologies (XP, SCRUM, DSDM, etc.) have gained popularity since 2001. Primarily founded as methodologies for software projects executed at a single location, Agile Methodologies have started showing promising results in multi-site projects too with many adopters and practitioners across the globe. Agile Software Development focuses on early delivery of working software to measure the progress of projects and hence to mitigate risks. It creates an environment that responds to changes by means of being flexible and nimble. It discourages creation of extensive documents that do not add any value to the customer. Distributed Agile Software Development and Testing is nothing but applying Agile Principles and Practices to software projects executed by teams located across geographies. In this context, service providers prefer Time & Material based pricing over Fixed Price model in order to avoid the risk of cost overruns induced by project changes. On the other hand, in order to reduce financial risks and to implement a fixed-scope on a mutually agreeable timeline or fixed-schedule, customers prefer to execute projects on fixed-cost basis. This paper is based on our experience in delivering a Fixed Price Distributed Agile project to one of our strategic customers. This paper presents the challenges in executing Fixed Price contracts, and the approach and real time course corrections we made to deliver this project. Besides, this paper discusses our Findings along with the Best Practices and Lessons Learned.