Why Agile is Better than Waterfall (Based on Standish Group Chaos Report 2020)

When it comes to technology projects, Agile projects succeed where traditional projects fail. It’s really that simple. In fact, the most recent Standish Group Chaos Study from 2020 shows that Agile Projects are 3X more likely to succeed than Waterfall projects. And Waterfall projects are 2X more likely to fail.

To be clear, the failure and success metrics shared in this article are based on software projects only. I don’t know about success and failure rates for other types of projects.

Oddly not everyone agrees even when talking about technology or software projects. In particular the project management community decried the value of agile ways of working. Only recently have they embraced their own version of agility and even now they still like to claim that traditional approaches have their place in technology projects. Unwilling to let go, they promote the alchemy of hybrid agile, whatever that is.

[See this related article: Project Managers Fail to Help Software Projects Succeed]

But the PM community aside, most people are on board that all that upfront planning and plan-driven approaches are going to fail on fast-paced technology initiatives. There is plenty of supporting evidence that Agile wins out over Waterfall Projects.

That data comes from 25 years of studying project success and failure rates is pretty clear. Agile projects are 2X more likely to succeed and less than half as likely to fail than Waterfall. This is based on the Standish Group Chaos Studies and their most recent report in 2020 called Beyond Infinity. As with the other Standish Group Chaos reports, they reside behind a paywall on the Standish Group Website. Read on for more highlights from the 2020 Chaos report.

There should be NO Debate over Agile vs. Waterfall Projects

While the 2020 data from the Standish Group was clear about the success of Agile vs. Waterfall Projects, it isn’t a change in direction. In fact, the Standish Group has been clear about advocating for Agile Projects over Waterfall or Traditional Projects for about 10 years.

For those of you who may not have heard of the Standish Group, they’ve been analyzing technology projects for over 25 years. Their first Chaos Report came out in 1994, even before Agile was a term used for software development approaches. Since then, over 50,000 technology projects have been added to the Standish Group database of successful and failing projects.

What does success and failure mean? Great question. Failure is easy. Failure means, the project was cancelled or the solution was never implemented. Success is a little more nuanced.

For the first 15 years of the Standish Group studies, the definition of success was the same used for years by the Project Management Institute. Remember On Time, On Budget, On Scope? Better known as “how well did we 1) plan and then 2) deliver against that plan?”

You may recall that the Agile Manifesto came out squarely against the ‘plan the work, work the plan’ line of thinking. The Agile Values state that agilists value Responding to Change over Following a Plan.

The Standish Group expanded their definition of success in 2015 to what they called a modern success measure. The new definition expended to include the outcomes or impact of the project. They looked beyond the delivery against the plan to include the value delivered and customer satisfaction. After all, isn’t that the reason we complete projects – to deliver something of value? It’s not simply a test of our planning process or execution against a plan.

So the Standish Group “Modern” definition of success includes the following six individual attributes of success:

1. On Time
2. On Budget
3. On Target (scope)
4. On Goal
5. Value
6. User Satisfaction

From as early as 2015, the results of agile projects vs. waterfall projects have been pretty consistent. Consider this chart which summarizes over 10,000 projects from the Standish Group database from the years 2011 to 2015.

 

As shown, in 2015 The Standish Group data showed that Agile Projects were 3X more likely to succeed and Waterfall Projects were 3X more likely to fail.

Are Agile Projects Still Better than Waterfall in the Standish Group 2020 Chaos Study?

Fast forward to today and the most recent Standish Group Chaos Report. That report, called Chaos 2020 Beyond Infinity, shows a minuscule reduction in Waterfall failure rates from the 2015 report. Otherwise, little changed. This report is based on an impressive database of 50,000 projects.

The Standish Group data also segmented out success and failure according to project size, Agile and Waterfall Projects. As you can imagine, smaller projects succeed more often than larger projects. Smaller projects have less risk and shorter feedback cycles. The data highlights how much more successful those smaller projects are. For Agile projects, small projects are 3X more likely to succeed than large ones. And for Waterfall projects, the success rates for small projects jumps to 6X more than large ones.

One key takeaway here is to avoid large projects. By breaking large projects down into smaller projects, you can significantly reduce your risk and improve your odds for success. Check out this quote from the Standish Group 2018 Chaos Report:

When we break “agile versus non-agile” by size, we find some really interesting data. Large agile projects succeed at twice the rate of non-agile projects, and fail half as often. “Medium-agile” projects do not fare that much better (31% versus only 19% for non-agile projects). Only in the small category does non-agile come close to agile. Therefore, we conclude that size trumps agile methodology—but in combination, they can be deadly.

— Standish Group CHAOS Report Series, Decision Latency Theory

However, in the Standish Group 2020 report, they went beyond advocating for smaller projects. How about no projects at all?

Are You Still Using Waterfall instead of Agile?

Ok so I know there are a lot of you out there still using Waterfall. It has worked in the past of course. We put men on the moon with Waterfall approaches. But the data is clear – you are rolling the dice and risking your money and valuable resources using those plan-driven approaches. Why would you risk your career?

Making the transition from Waterfall to Agile is not trivial, but it is certainly possible. Many organizations have tried and failed, while others have succeeded with Agile approaches. If you are ready to learn more, here are some resources that can help you.

• First, check out our article on How to Successfully Transition from Waterfall to Agile and Scrum. This article provides an overview of the steps you need to consider when moving to Agile and Scrum which can help you create your own agile transformation roadmap. You can also download our detailed step by step guide on how to transition to Scrum.
• Another great resource is the article, How-to Guide for Success with an Agile Methodology. It provides a grouping of articles by subject.
• If you are wondering if your organization is too big or too old for Agile, read this Case Study about how Bank of America successfully made the transition to Agile and Scrum. Bank of America is both big and old and if they can make the transition to Agile, so can you.
• You can also join our mailing list to receive our monthly newsletter with tips on Agile and Scrum and successfully adopting Agile in your organization.

If you are a leader, consider getting training for you and your core team. Our training page lists plenty of Agile and Scrum courses, with and without certification. Specific to leaders, the Agile for Leaders course and Professional Agile Leadership courses provide the insights and tools you need to succeed in an agile transformation. You might also enjoy this article on The Leaders Role in an Agile Transformation.

Bottom Line – Agile vs. Waterfall

It’s no longer a question of which approach works best – Agile wins over Waterfall projects as supported by the data. So why risk your career and your reputation by rolling the dice on another Waterfall project. The move to Agile is not trivial but it is possible. We would love to help.

[Check out this Related Article about the Standish Group 2020 Chaos Report – Project Managers Fail to Help Software Projects Succeed].