A risk management investigation of SME adoption of agile method information system development

Contemporary Information System Development (ISD) is performed within operational environments characterized by rapid change across many dimensions – including personnel, user requirements, regulation, and technology architectures. The rapidity, extent, and inevitability of this environmental change are credited as the major catalysts for a move away from traditional, plan-driven ISD methods (i.e. the Waterfall method) toward the agile method paradigm. Agile methods are known for several main operational strategies, including iterative development, significant user involvement and frequent releases. Agile method adoption, however, does come with risks. These risks must be carefully identified and managed within any potential agile-adopter. This is particularly so within a small adopting organization that is less able to absorb the impact of any significant level of failed ISD experimentation. This study describes the identification and analysis of the major risk in the adoption of agile methods by a Small-to-Medium-Enterprise (SME) software developer. The study was completed over a twelve month period during which the SME moved from Waterfall ISD to agile ISD. Research data has been obtained via an exploratory case study utilizing the risk-identifying Agility/Discipline Assessment (A/DA). The A/DA data collection involved interviews and observations across three different SME sources: project managers, project team members, and customers. The case study factor analysis synthesised the experiences of these stake holders to produce a comprehensive understanding of the strategic management challenges. The contribution from this study is that the SME agile method adoption faced one very major risk – a risk that could not be effectively controlled. The risk is posed by the need for the SME and the customer to formalize the customer relationship via the negotiation of an appropriate contract. It proves very difficult to negotiate such a contract whilst not constraining the full potential of agile ISD.