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Agile Development and Modern Software Development Contracts

by Fahad Mahmood
January 13, 2023
Agile Development and Modern Software Development Contracts

When it’s time to draft up a contract for web or software development, there are several different approaches that a software development agency might suggest for your project.

Each unique methodology will have an impact on how your final product is developed, and some development styles will definitely be a better fit for your project than others.

In this blog we’ll be covering Waterfall and Agile development - two of the most common methodologies that software companies are using. Before you sign that contract, read on to learn how these development styles will affect the development of your project.

What are Waterfall Development and Agile Development?

The Waterfall model of software development takes a linear approach to projects, meaning software companies will research, design, develop, test and deliver the finished product in that specific order. The entire scope of the project is decided from the beginning, typically with a fixed cost and fixed timeline so the software development agency knows exactly what to deliver.

Agile software development takes a far more fluid approach, in which portions of the project are completed in segments with continued input from the client to add, remove or change features as they are developed. Agile projects will more often charge by the hour, allowing real-time feedback to influence the development as it happens.

How Do Waterfall and Agile Compare?

Both of these methodologies have their own unique benefits.

Waterfall is great for hands-off projects where you’d prefer that the software development agency handles everyday development decisions for you. It’s also well-suited to strict timelines and budgets where the full scope of the project absolutely MUST be agreed upon.

Agile software development provides far more flexibility to adapt with the fast-changing business world, but without the guarantee of a fixed cost and fixed scope to rely on. The Agile approach is collaborative between software companies and clients, so there’s more opportunity to pivot when needed and make improvements to the project at any time.


What are the Major Benefits of Agile Development?

While there’s value in both approaches, Agile projects are nearly 1.5 times more successful than Waterfall projects. Let’s go over some of the reasons why Agile software development is a better fit for most modern contracts.


A great Agile development team will provide adaptability in their contract by offering estimated costs per module or per individual features. Rather than agreeing on everything beforehand, you’re able to assess the cost of each segment of the project and change development priorities at any time.

This also allows greater financial flexibility when software companies offer rough time estimates for each module and charge hourly for their service – you can scale back development to save costs instead of paying for the total development time of features you’re no longer interested in.

Real-Time Feedback

Agile software development allows you to add or remove functionality from software in the middle of the development cycle. This real-time control over the direction of your project just isn’t possible with a fixed contract, so you won’t know which features are no longer needed until you’ve paid for the entire development cycle.

Agile development allows this anytime input because of the financial freedom of paying by the hour – there’s no disruption to the project when a feature needs to be removed, added or changed on a whim.

Easier Exits

What if you’re halfway through a web application contract when you suddenly have no use for a website anymore? A Waterfall project would hold you to your contact and make you pay for the full fixed cost of the project.

Most modern Agile development companies will instead offer you an easy exit from your contract, typically by charging a small fee of 15 to 20% of the remaining contract value. Some Agile companies like iVersion even allow exiting without any fee, so be sure to shop around before settling on anyone!

Always Read Your Contract

Much like choosing an SEO agency or a host for your website, it’s crucial to figure out what sort of software development agency is the best fit for you. Always read the terms of your contract before signing anything, and don’t hesitate to ask the important questions and ensure you’re getting what you need.

When it comes to Agile development, make sure you’re getting as much flexibility as possible. That means the freedom to add or remove features as you go, as well as the cost flexibility to scale your budget and walk away from the project if needed.

Agile Software Development with iVersion

Here at iVersion, we use Agile software development for custom web application contracts that give you all the flexibility a proper Agile team should. Check out our Web Development services to learn more!

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