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As Agile and DevOps adoption rapidly grows in enterprises, sourcing executives face challenges as they try to understand the nuances of contracting in this new model vis-a-vis traditional services. Given that the contract volume and complexity are likley to increase, it is imperative for sourcing executives to understand the nuances of Agile/DevOps and to learn to contract for a product that is difficult to define.

In this research, we address some of the challenges in the current scenario by analyzing the “as-is” state of Agile contracting and how enterprises are signing contracts, including the following areas:

• Existing adoption and its challenges
• Contract tenets including Statement of work (SOW), pricing models, terms and conditions, etc.

To scale Agile at an organizational level, we also discuss on the “to-be” state, or how enterprises can contract for scaled Agile and what the transformation journey should look like. Topics covered include:

• Scope definition and the importance of "definition of done"
• Managing vendor lock-in (speed vs. reliability)
• Removing the waterfall mindset and the inception of value-based pricing

As a logical extension to Agile, we also touch upon contracting for DevOps, including some of the contractual keys, such as statement of work and service levels that need to be addressed in DevOps delivery.

We conclude this report with some recommendations for the sourcing executives to consider when scaling Agile in their organizations.

Scope and methodology of this report:

We based this report on our interactions with sourcing executives, evaluation of Agile sourcing contracts, and interaction with suppliers managing day-to-day challenges of Agile delivery.