Litigation Risks for Vendors in Agile Development and Practical Precautions – Part 2: Estimation Phase
Jul 01, 2025
1. The Estimation Phase in Agile
Common Pitfalls and Mismatched Expectations
Gaps appear during estimation. Clients and developers may have different goals. This creates significant pitfalls.
Developers want to communicate sincerely. But they also need to win contracts. So they often give broad estimates.
Clients may have only vague ideas. They often lack documentation. They need estimates for their budgets. Some use bids to drive down prices.
The Danger of Scope Creep
Budgets need sufficient buffers. Otherwise, they rarely work as planned. Scope creep is a major risk. Adding features later bloats projects. This can stop MVP delivery. It also misses market testing chances. Many projects fail from the start. They simply try to include too much.
The ‘Second Mover’ Advantage in Market Timing
Release products early. This helps test market fit fast. Being first doesn’t guarantee success. A “second mover” can learn and adapt. They often outcompete the pioneer. The Fuller vs. Mercari rivalry is an example. Strategic follow-up was key to winning.
Strategies for Clearer Estimates and Client Alignment
Overloading features leads to failure. Vendors must have these hard conversations. Some vendors may overpromise for revenue. This is a short-sighted approach. Developers can also ruin a product. They do this by adding excess features. Real validation happens after release. A lean prototype offers the best chance.
Using Prototypes and Clear Assumptions
Build a simple prototype first. Then, re-estimate costs. This builds a good team dynamic. Vendors seen only as contractors lose influence.
You must explain story points. Explain the reasoning behind them. Clients may later ignore assumptions. Set clear conditions with the client. Get their confirmation in writing. Clarify that estimates have limits. They are tied to schedules and assumptions.
Testing Compatibility with Paid Preliminary Work
Some vendors use estimates as a tactic. This can raise client expectations. It may cause later communication failures. For small scopes, it is wise to charge. This tests if the team can work well. Some worry about legal risks. But testing compatibility early is smart. It helps you avoid future disputes.
2. Estimating Workloads in Agile
Managing Evolving Estimates and Client Expectations
Precise agile estimates come later. This often happens after the project starts. Clients may not provide all materials. So, initial estimates are limited. Courts will still examine them in a dispute.
Clients and vendors think differently. Clients expect more work to be included. So, vendors must document reservations. Avoid inflating client expectations. Choosing a cheap vendor often backfires.
Ensuring the Right Communication Skills are on the Team
Managing expectations is key. It prevents project failures. But not every engineer can explain this. A skilled developer is not a communicator. Your team must include both roles.
The Critical Role of the Product Owner and Decision-Making
Basic design decisions emerge late. Often, this is after the kick-off. The dev team must adjust to this. This creates new dependencies. The designer must talk to the PO. A lack of responsibility is dangerous. The project can spiral out of control. Is the decision-maker reliable? Vendors must continuously assess this.
Identifying and Handling Uncooperative Product Owners
Product owners are not always helpful. They may delegate too much. They may resist making decisions. Or they may lack the needed authority. Sometimes a pseudo-PM has no real power. Vendors must manage schedules tightly. They need to align all expectations.
Documentation and Tracking for Transparency
Maintaining Meticulous Records and Decision Logs
Vendors must keep clear records. Use sprint and product backlogs. Keep detailed meeting notes. Document who made each decision. This is especially important. Automated minutes can be lifesavers.
Using Deliverables and Metrics to Justify Progress
Work in three-month increments. Create visible deliverables. This supports contract extensions. Early estimation helps manage clients. It provides a realistic budget. Story points relate to team speed. They should be tracked with real data.
Visualizing the Evolution of Estimates
Early estimates must evolve. Show these changes visibly. Clients often push for more features. Neglecting this leads to disputes. Documented evidence protects you. This is true even for your own mistakes. It fosters a more cooperative relationship.
Setting Boundaries and Resolving Conflict
Sometimes a client is too demanding. This can make work unsustainable. You must gather evidence. Escalate the issue to senior leaders.
Elite engineers are not enough. Believing so is an illusion. Good client communication is better. It prevents projects from blowing up.
Drawing Clear Lines on Scope Flexibility
Clients can exploit agile’s flexibility. They may frequently change the design. Some do this unintentionally. Others do it deliberately. Vendors must draw clear lines early. If conflict is coming, face it sooner. Delays can lead to formal litigation.
The key is to give the best early estimate. Use the information you have. Be clear about when a better estimate is coming. This timeline management is critical. It protects the vendor’s position.
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