Adoption of Hybrid Agile in Fixed-Bid Projects

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Adoption of Hybrid Agile in Fixed-Bid Projects

Is the Waterfall or Agile method more effective? How about both? Learn more about the benefits and breakdown of using hybrid Agile in fixed-bid projects.

· Agile Zone ·
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IT Organizations are using mainly two development models nowadays called Agile and Waterfall. They are commonly used Software Development Life Cycles (SDLC) for both of the models. The primary transformation between Agile and Waterfall is that the Waterfall model executes the development life cycle sequence,  whereas Agile executes iterative cycles. Both of the models are their advantages and disadvantages. As per the TrustRadius survey in 2019, 81% of Organizations are using Agile, and 19% are using Waterfall. 

Nowadays, Organizations are willing to execute projects in an Agile manner in a fixed bid contract. An alternative to fixed bid contracts is time and material pricing model. A fixed bid contract project implementing in Agile is challenging for IT Service Providers to manage. The primary job of Service Provider is to execute the project with the timeframe and budget given by the Organization with high Quality. One of the core principles of Agile is Adaptability- able to change design, architecture, requirement, and deliverables at any point in the project life cycle. Change in requirement and architecture is not well suited for Fixed Bid Contracts. All feel that all Fixed Bid contacts run in the Waterfall approach instead of running in the Agile model. 

But IT Service Providers can think about the Hybrid Agile approach for attempting Agile implementations in Fixed Bid projects. 

The below table describes when to go with Fixed Bid and Time and Material pricing models.

Fixed Bid Pricing Model

Time and Material Pricing Model

Standard Requirements

Dynamic Requirements

Very Clear Requirement of the Project

Unclear Project Scope

Determined Deadlines. Scope not to change

Adaptability is one of the requirements

Limited Budget and Service Provider to manage the project

Willing to manage the project by Organization


The time and materials pricing model work for organizations where the requirements are flexible (adaptability). At the same time, the fixed bid pricing model works best for with apparent requirements and features upfront.

The agile development model practiced over a decade for many Organizations / Service Vendors. IT Organizations experienced significant advantages over the traditional waterfall model by using Agile. In due course, the core agile development to Hybrid Agile development which is a modified waterfall model for Fixed Bid projects especially. Hybrid agile is used mostly in various IT Service Industries instead of core agile methodology. 

Hybrid Agile Model

Agile methodology is an iterative process with iterative cycles called Sprints. The agile process allows project teams to increased development speed, lowers cost, and quick resolutions of defects. The Hybrid Agile framework is a mixture of the Waterfall and Agile Methodology combined to follow sequential flow for Requirements and Design and then iterative cycles for the Development process. Hence, a hybrid agile is the best of both software development models which aids in business values with the precision of the waterfall model and speed of the agile model combined. Below diagram shows how the Hybrid Agile looks like:

development and unit testing iterative process graphic

  • Requirement Analysis, Architecture, and Design can be done with Waterfall and Development and Unite Testing in Sprints. System Integration, UAT in short sprints using Agile Scrum.
  • Communication channels, and a collaborative software tool to support information exchange, data consistency, and traceability across the lifecycle
  • Involve Product Owners in all the communication early.
  • Compliance outlooks and focus on the design phase.
  • Changes in requirements can be adopted with the mutual concern of the Organization and the Service Provider. 
  • All the new requirements after Design signoff will be moved to the Change Management process.

Hybrid Agile suites for below scenarios

  • Project team already using the waterfall model and trying to adopt an agile model
  • Organizations need to meet regulatory and compliance requirements (which require governance and documentation of the project).
  • Projects deals with legacy applications with an inflexible release cycle.
  • Multi-vendor model where independent agile teams cannot run all the stages
  • More suitable for fixed bid projects implementations.

Below are the considerations to choose which methodology to use in the projects:




Hybrid Agile

Customer Availability

Requires only at milestones

Throughout the project life cycle as Product Owner role

Requires sign off after completing the requirement and design phase.

Features Changes

Scope / Features defined well in advance

Adaptability in requirement any time

The feature can change within the time-bound. The scope changes with a mutual understanding of Product Owner and Project Manager

Team Selection

Owned by the Service Provider Management team

An organization can choose the team

An organization can choose the leading persons in the team

Funding and Budgets

Well for Fixed contracts

Well for Time and Material contracts

Well for both of the contracts


A hybrid agile approach for managing projects can offer advantages with highly effective for Service Providers for Fixed Bid Projects. Implementing and planning should be adequately requiring preparation. It is essential to gain knowledge of hybrid agile methodologies and hybrid agile project management. The Project Manager should be known how to adopt the change in Hybrid Agile; otherwise, the total project is in overtime and budget to the Service Provider. The Service Provider Manager has to discuss the requirements one by one with the Product Owner and fix the requirement in the requirement and design stage. After completing / signoff the requirements and design, the Service Provider team starts the development in Sprints and provides the product to the Organization. The Organization can make minimal changes in introspect meetings wherever required. If the change is significant, not able to fit into the timeline, both the parties can sit together and mutually understand the requirement and fit the requirement with removing the non-priory requirement. 

hybrid agile

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