Software project success rates are alarmingly low in today’s rapidly changing business landscape. 

According to Zipdo’s report from 2023, 31% of software projects are cancelled before completion, while over half of them almost double their initial budget. Perhaps the most concerning fact is that only 16% of IT projects are completed on time and within budget. 

These stats underscore the real fears companies harbour when considering outsourcing their software development–quite understandably. 

The concern that external development teams may struggle to adapt to changing business needs is well-founded. However, one solution has the potential to alleviate these concerns and increase the odds of success: agile software development methodology. 

Read on to learn how it helps to ensure that your next IT project delivery happens on time, on budget, and in line with your changing business goals. 

Defining agile software delivery methodology

Agile software development is an iterative approach to IT project delivery. Instead of trying to deliver all at once, development teams build software incrementally from the start of the project. 

It focuses on adaptive planning, evolutionary development, early delivery, and continuous improvement. Regularly releasing parts of the product encourages testing, validation of product assumptions, and rapid responses to changes. 

At its core, agile software development methodology rests on the principles of:

• Iterative progress with regular customer-developer touchpoints;

• Adaptability to changing requirements;

• Collaboration between cross-functional teams;

• Regular testing and validation of the software product.

This approach starkly contrasts conventional project methodologies like the waterfall model, which follows a linear, sequential approach. 

Agile’s flexibility makes it ideal for fast-paced business environments with rapidly changing requirements, which is an everyday reality in the global digital economy. 

Four common IT project issues & how agile software development addresses them

Cost overruns vs. agile budget control

Going over the budget is a common occurrence in the world of IT projects. 

An iterative development approach ensures that agile teams reassess priorities regularly and align the tasks with the budget. By breaking the project into smaller, manageable chunks called ‘sprints,’ teams can better estimate costs and adjust as necessary.

For instance, Siemens’ adoption of agile software development methodology resulted in benefits such as 25% cost reduction and 30% quality improvement. 

Project delays vs. timely delivery 

You’re not alone if you’re worried that your project will be delayed. Research from BCG proves that delays are common, with nearly half of respondents indicating that a significant portion of their IT projects face such challenges. 

Agile software development methodology emphasises breaking the project into manageable sprints with clear deadlines. This approach ensures continuous progress and enables spotting and fixing potential issues early before they snowball into costly delays. 

A great example is Cisco, which used scaled agile methodologies to accelerate workflows and decrease overtime hours. As a result, the company experienced a 40% reduction in significant defects and boosted its removal efficiency by 14%. 

The gap between business & IT vs. agile alignment

Another important factor behind the high IT project failure rate is the disconnect between business and tech departments. 35% of respondents in the PwC study named this lack of collaboration an obstacle to reaching expected results from digital transformation initiatives.

Agile software development methodology prioritises cross-functional collaboration, ensuring the product meets changing needs. 

Regular touchpoints like sprint planning, reviews, and demos gather business and tech stakeholders, keeping everyone aligned and allowing for course corrections as business requirements change. 

PayPal is an inspiring example of how agile methodologies align stakeholders for accelerated product release. Previously, the company was slow to release new products due to a disorganised and bottlenecked process. Within six months of switching to Scrum, the company delivered 58 new products. 

Failed product vs. product-market fit

As many as 90% of startup ideas fail, with no evident product-market fit being one of the most prominent reasons for this. If you spend six months investing considerable money in developing a product nobody wants to use, it can indeed feel like a fiasco. 

Unlike waterfall projects, agile software development methodology involves frequent testing and feedback loops. Ensuring regular touchpoints with business and end-users minimises the risk of a subpar final product. 

In agile development, there are no unpleasant surprises, as you’re in control of product changes at all times. Combined with the lean startup method, agile is extremely useful for building products your users actually want. 

Dutch ING Bank is a textbook example of the power of agile product development. By incorporating customer feedback in every sprint, the organisation delivered a far more satisfying digital banking experience for its users. 

As you can see, by using agile software development methodology, you can overcome many IT project issues. Let’s now shed light on what to expect when working with an agile software team. 

Working with agile software development teams 

Here are the typical steps our development team follows when working on new projects:

System design

#1. Analysis of your business needs and requirements

All our software projects start with a thorough analysis of your business requirements, challenges, and conditions. We help you define project goals and present ways to achieve them. 

Our collaboration usually starts with a Proof of Concept (PoC), which helps to assess the technical feasibility of your app idea and verify initial market needs.

#2. Design and prototyping

At this stage, you get detailed technical specs and prototypes demonstrating how your future solution can work. 

Our team gathers your feedback and provides necessary corrections and updates to the wireframes and prototypes. 

#3. Agile software development 

Once the prototype gets your green light, regular software development work begins. 

Our development team delivers you parts of software in frequent sprints, which typically last two weeks each.
At the end of each period, you get a detailed demo so you are aware of all changes, ensuring that the final product matches your evolving business needs.

#4. Testing and deployment

Our testers carefully check all software pieces to ensure impeccable functionality before implementation. Once new features are deployed, we will provide you with the necessary technical documentation. 

#5. Support and maintenance

When users start enjoying the product, we can still support you in monitoring its performance, managing bug fixes and updates, and providing ongoing assistance. 

How to approach agile software development methodology for the best results

Even the best external agile consultants, methodology, and tools alone will not guarantee complete project success without proper preparation on the side of your team.

Accounting for these issues will undoubtedly position your organisation for IT project success:

#1. Clearly define your business goals

Establish goals and priorities to guide the software development process. 

Before actual work begins, ensure that your stakeholders align on the business challenge you wish to solve and the expected outcomes to avoid costly delays.

#2. Choose the right technology partner

Find a reliable agile software development team with proven experience in your industry. Get quotes and ask for portfolio examples, references, and project methodologies. 

Remember, you can always start with a small PoC to assess if a given software company is a good match for your organisation. You don’t have to commit to the entire project right away. 

#3. Collaborate (pro)actively

Commit to regular communication and feedback to ensure your IT project stays on track. Use PM trackers like Atlassian JIRA to keep in touch with your external development team on the tasks at hand. 

Arrange with your developers which of the usual agile ceremonies you and your team should attend. The usual ‘suspects’ include sprint planning, review, and retros, but don’t shy away from getting more involved to gain even more control over the changes. 

#4. Set manageable expectations

Before the project starts, understand the iterative nature of agile software development methodology, its benefits, and potential drawbacks. 

Educate your team and encourage their active participation in the collaboration with the external consultant. 

Instead of a summary

Agile software development methodology has the potential to reduce the key challenges of IT outsourcing: cost overruns, delays, and misalignment with business goals.

By embracing this approach, your company can significantly increase its chances of success in IT projects, as demonstrated by the success stories of Siemens, Cisco, and ING Bank.

Discover how agile software development methodology can boost your next software project. Contact us to schedule a free, non-binding consultation with our agile team.