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Education and Career

Agile and Waterfall: Understanding the Best Project Management Approach for Your Business

For all types of organizations, executing large projects requires an appropriate level of planning. Deciding between a waterfall or agile project management approach merits careful thought. Businesses that choose the wrong approach for the project and their culture risk missing the full realization of their project investment.

Without some agility in your project approach, a business risks spending resources to produce a product that is not aligned with its customers. Conversely, a business that releases a product too quickly risks early failures that can be detrimental to the remainder of the program.

To decide whether an agile or waterfall approach is best for your organization and projects, it’s important to understand some basic differences between the two approaches.

Lyssa Adkins, an agile coach, has likened waterfall project management to eating a cake one layer at a time. You conduct design and development in phases that cannot begin until the previous phase is complete, and the final product is not released until each phase is finalized — or the last layer of the cake is eaten. In this scenario, a company risks performing work that is ultimately not necessary. For example, Jeff Sutherland, co-creator of Scrum (a well-known agile approach often used in software development) notes that up to 60% of software features are not used. Why devote resources to planning and delivering work that will not generate value?

With an agile approach, Adkins notes that you eat the cake one vertical slice at the time. You perform design, development, testing and release for a small part of the big picture quickly, rather than waiting until each phase is complete before releasing value. In other words, agile gives the customer a chance to see value with each slice, and offer feedback that guides the remainder of the project as well as future, iterative versions of the product. In this way, organizations avoid performing work that is not necessary to value realization – beating their competitors to market and enabling their own teams to move on to other value-creating work.

Agile is often viewed as the approach for innovative companies looking to outpace their competition. Releasing early versions of a product can help companies beat their competition to market, make continuous improvements and gain competitive advantage rather than waiting until the entire project is complete.

However, this doesn’t mean that the traditional waterfall approach is outdated. There are many instances and industries where this approach is the right choice. It’s important for CEOs and other decision makers to think of project management methodologies as a continuum rather than a choice. With pure waterfall on one end and pure agile on the other, most organizations select a hybrid approach somewhere on that continuum — one that considers many factors and offers benefits from both waterfall and agile.

Waterfall or Agile?

While many organizations pursue an approach that is a mix of waterfall and agile, it’s still important for businesses to consider where they fall on the spectrum in order to maximize value from projects.

If you are developing an innovative new product, there is a case to be made that the more agility you can embrace, the more competitive you’ll be. But for organizations executing projects that simply cannot afford to fail upfront — like building a skyscraper or developing medical technology that lives depend on — a more rigid approach is required.

In any case, organizations need to assess the following factors to determine where they fall on the spectrum:

  • Economies of Scale: A large project that requires significant resources be procured and committed up front points to more of a waterfall approach. Let’s say you’re constructing a building. You need to know all of the materials you’ll need to complete the project upfront, so you can buy in bulk ahead of time rather than piecemeal. It is not economical to buy a small amount of materials to complete one part of the building, then stop and order new supplies for the next phase.
  • Level of Risk: Projects that must minimize upfront risks lean more towards the waterfall end of the spectrum. For example, if you’re developing a medical device that has a direct connection to life safety, failure is literally not an option. This factor drives organizations in this space to perform a great deal of planning and research early in the project lifecycle to identify and manage risk.
  • Need for Innovation: In contrast to scenarios aimed at minimizing risks, the more comfortable you are with embracing risk and perhaps even an early market misfire to be competitive, the more agile you can be. In other words, a more flexible approach to project management could help innovative businesses leapfrog competition. You’ll be able to get new versions of your product out faster (whether it’s software, hardware or another physical product), which will allow you to implement customer feedback quickly for future iterations.
  • Organization Culture: When deciding upon a project management approach, it’s important to be honest about your company culture. Some companies are simply too large and bureaucratic to adopt an agile approach, as this approach requires quick decisions, direct engagement and feedback, and immediate pivots in response to inputs. A more bureaucratic organization may find an approach closer to waterfall on the spectrum is a better fit. With these organizations, it’s often too difficult to complete quick releases or pivots in strategy when management layers and longer approval processes are part of the culture.

Regardless of where you land on the continuum and the approach you select, one important thing you can do for your organization is to give your project teams a common basis in training. Assess the project factors, choose your strategy and make sure all key players within the organization are on the same page and have developed the necessary skills to complete the project as planned.

At the end of the day, choosing the best approach to run your project can help you maximize value realization and minimize risk. Consider the key factors that play a role in determining the best project approach for you, and make sure your team is fully equipped to do their best work.

By Shawn Belling, Vice President – Product Development & Support at CloudCraze.

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CEOWORLD magazine - Latest - Education and Career - Agile and Waterfall: Understanding the Best Project Management Approach for Your Business
Shawn is Vice President - Product Development & Support, for CloudCraze, a cloud-based e-commerce software firm.