•   8 min read

Agile or Waterfall: which option fits your business better?

The oppo­si­tion of Agile and Water­fall is not as much the­o­ret­i­cal as it is prac­ti­cal. The choice of method­ol­o­gy that does not fit your project will, in the best-case sce­nario, slow down its devel­op­ment or, at worst, will send it to the Major Fails of the Year” list. Flex­i­ble and cas­cad­ing design of project devel­op­ment (Agile и Water­fall respec­tive­ly) — is one of the most pop­u­lar man­age­ment methodologies. 

Hav­ing exam­ined your project’s fea­tures and hav­ing armed your­selves with the knowl­edge from this arti­cle, you will be able to con­fi­dent­ly answer the fol­low­ing ques­tion: What will fit my busi­ness bet­ter — Agile or Waterfall?”

Agile — sys­tem of ideas and flex­i­ble” project man­age­ment prin­ci­ples that serve as a basis for oth­er pop­u­lar meth­ods, such as Scrum, Kan­ban, and oth­ers. The key prin­ci­ple is the devel­op­ment through short iter­a­tions (cycles), and at the end of each of such cycles, the client (user) is get­ting a work­ing code or product.

Water­fall — project man­age­ment method that implies sequen­tial order from one stage to anoth­er with­out any­thing being skipped and with no return to pre­vi­ous stages. 

What is Agile

Like oth­er pop­u­lar project devel­op­ment and man­age­ment method­olo­gies, Agile emerged com­par­a­tive­ly recent­ly in the USA. Unlike CPM and CCPM, a whole group of peo­ple, 17 Amer­i­can IT-spe­cial­ists from the state of Utah, is respon­si­ble for the emer­gence of this flex­i­ble devel­op­ment method­ol­o­gy. Along with the Flex­i­ble devel­op­ment of soft­ware Man­i­festo”, where the term Agile” was first intro­duced, they came up with 12 prin­ci­ples of Agile-development.

The essence of these prin­ci­ples boils down to the fol­low­ing key prin­ci­ples that define the char­ac­ter of the flex­i­ble devel­op­ment method:

  1. Peo­ple and col­lab­o­ra­tion are more impor­tant than process­es and tools.
  2. Work­ing prod­uct is more impor­tant than com­pre­hen­sive documentation.
  3. Coop­er­a­tion with the client is more impor­tant than nego­ti­at­ing the contract’s terms.
  4. Being ready to face changes is more impor­tant than fol­low­ing the ini­tial plan. 

Agile became the basis for the whole array of flex­i­ble meth­ods like Scrum, Lean, and
extreme pro­gram­ming (XP), to name a few. 

Scrum — the method­ol­o­gy of flex­i­ble devel­op­ment based on Agile, which is based on the sprint” — a peri­od from 1 to 4 weeks, after which a work­ing ver­sion of a prod­uct should be obtained.

Lean — method that grew on the basis of Toy­ota Pro­duc­tion Sys­tem. Its fun­da­men­tals are a phi­los­o­phy of con­stant improve­ment at all lev­els of the orga­ni­za­tion, where one of the key notions is — val­ue (what the client is ready to pay for).

Extreme Pro­gram­ming (XP) — one of the Agile-meth­ods where an impor­tant role is giv­en to the peri­od­ic plan­ning game involv­ing the client. It allows to find out all the flaws of the pre­vi­ous inte­gra­tion, tasks pri­or­i­ty, and desired prod­uct func­tion­al­i­ty with the client’s wish­es tak­en into consideration. 

Advan­tages and dis­ad­van­tages of the Agile method

Advan­tages include:

  • Short and clear iter­a­tions — devel­op­ment cycles last from 2 weeks to 2 months at the end of which the client gets the work­ing ver­sion of a product.
  • High degree of exec­u­tives’, man­agers’, and clients’ involvement.
  • The work­ing prod­uct is at the fore­front as the main progress indi­ca­tor — this­can be viewed both as good and bad since it requires high demands to the selfmanagement.

Water­fall turned out the same way as many oth­er inven­tions: Her­bert Ben­ning­ton in 1956 and Hosier in 1961 con­tributed to the devel­op­ment of the method­ol­o­gy while Walk­er used their work secur­ing the name of the Water­fall Cre­ator”. As they say, win­ners are not to bejudged…
Water­fall devel­op­ment mod­el involves the sequen­tial pas­sage of the process, divid­ed into stages. Tran­si­tion to a new stage is pos­si­ble only after the com­ple­tion of the pre­vi­ous one.

In the orig­i­nal work of Walk­er Man­ag­ing the devel­op­ment of large soft­ware sys­tems,” 6 stages of prod­uct devel­op­ment are described. These 6 stages were secured in the stan­dards of work with soft­ware devel­op­ers in 1985 by the US Depart­ment of Defense:

  1. Sys­tem and pro­gram require­ments: are secured in PRD (prod­uct require­ments document).
  2. Analy­sis: embod­ied in mod­els, schemes, and business-rules.
  3. Design: inter­nal soft­ware archi­tec­ture is being devel­oped with ways to imple­ment the require­ments. This is not only about the inter­face and appear­ance of the soft­ware but also about its inter­nal struc­tur­al logic. 
  4. Cod­ing: pro­gram code is writ­ten direct­ly; soft­ware inte­gra­tion is in progress.
  5. Test­ing: Bug testers (testers) check the final prod­uct by enter­ing infor­ma­tion about defects in the pro­gram code or func­tion­al­i­ty into the track­ers. In case of errors and time/​money avail­abil­i­ty, bug fix­es occur.
  6. Oper­a­tions: the prod­uct adapts to dif­fer­ent oper­at­ing sys­tems, is reg­u­lar­ly updat­ed to fix bugs found by users and to add func­tion­al­i­ty. The stage also pro­vides tech­ni­cal sup­port to customers.

The Toy­ota com­pa­ny that had made the Lean and Kan­ban meth­ods pop­u­lar used cas­cad­ing soft­ware devel­op­ing mod­el till the end of 2000‑s for pro­duc­tion needs.

Advan­tages and Dis­ad­van­tages of Waterfall

The biggest advan­tages of Water­fall are:

  • Clear and sim­ple struc­ture of devel­op­ment process — it reduces the entry thresh­old for teams
  • easy report­ing — you can eas­i­ly keep track of resources, risks, time and mon­ey spent thanks to the strict phas­ing of the devel­op­ment process and detailed doc­u­men­ta­tion of the project
  • task sta­bil­i­ty — the tasks that the prod­uct faces are clear to the team from the very begin­ning of devel­op­ment and remain unchanged through­out the entire process
  • Esti­ma­tion of the cost and dead­lines for the project — the tim­ing of the fin­ished prod­uct as well as its total cost can be cal­cu­lat­ed before the start of development.

Dis­ad­van­tages of the cas­cad­ing method include:

  • a process that lacks flex­i­bil­i­ty – in oth­er words, if a project hap­pens to require more time and finan­cial resources than had been ini­tial­ly allowed, then the whole test­ing phase goes to sham­bles. Accord­ing to research by the Roth­man con­sult­ing group, the cost of fix­ing bugs after a prod­uct is released is on aver­age 20 times high­er than dur­ing full-fledged mul­ti-step test­ing dur­ing the devel­op­ment process
  • resis­tance” to changes — the rigid frame­work of the devel­op­ment stages and the con­di­tion that only the fin­ished prod­uct is pro­vid­ed deter­mine that it is impos­si­ble to make adjust­ments dur­ing the development
  • iner­tia — in the ear­ly stages, the fore­cast of time and finan­cial expens­es may change upwards, but it is impos­si­ble to change the project towards opti­miz­ing costs and improv­ing the func­tion­al­i­ty or con­cept before the release of the fin­ished product
  • increased risk — the clas­sic test­ing sys­tem implies test­ing each com­po­nent of the project sep­a­rate­ly (includ­ing test­ing com­po­nents in coop­er­a­tion with oth­ers). When using Water­fall, the fin­ished prod­uct is tested.

Par­tial­ly the draw­backs of the water­fall devel­op­ment mod­el are cor­rect­ed in the Water­fall mod­i­fi­ca­tions: Sashi­mi, Water­fall with sub­pro­jects, and the water­fall devel­op­ment mod­el with risk-reduc­ing feature.

Sashi­mi or water­fall mod­el with over­lap­ping phas­es is the most famous among them. As in the orig­i­nal method, its stages fol­low each oth­er but at the same time over­lap one anoth­er in time.

Water­fall with sub­pro­jects is a mod­el in which you work with three large blocks: con­cep­tu­al­iza­tion, require­ments design, and archi­tec­tur­al struc­ture of the prod­uct. Then for each of them, you go through the stages (sub­pro­jects) of detailed design, cod­ing, and test­ing. At the end, all com­po­nents are inte­grat­ed dur­ing the sys­tem test­ing phase.

Water­fall devel­op­ment mod­el with the risk reduc­tion com­po­nent is a mod­i­fi­ca­tion of the clas­sic Water­fall, in which risk reduc­tion spi­rals are added, which divide the project into mini-projects and cor­re­spond to one or sev­er­al key risks.

Com­par­i­son Table 
 Agile Water­fall
Essence Flex­i­ble devel­op­ment mod­el based on iter­a­tive principles Cas­cad­ing devel­op­ment sys­tem based on strict sequen­tial devel­op­ment process
Date Cre­at­ed 2001 1956, 1961, and 1970
Appli­ca­tion principles
  • The high­est pri­or­i­ty of the client satisfaction 
  • Through­out the entire project, both the team and the client are in close col­lab­o­ra­tion with one another 
  • Work­ing prod­uct is the main progress indicator 
  • The work can only be trust­ed to self-orga­nized moti­vat­ed team 
  • Opti­mal time­frame of the work­ing prod­uct release – from 2 weeks to 2 months.
  • Strict sequence of devel­op­ment stages
  • The next step comes only after the suc­cess­ful com­ple­tion of the pre­vi­ous one
  • Fixed prod­uct cost
  • The client is not direct­ly involved in the devel­op­ment process
  • Changes can be imple­ment­ed only after the whole devel­op­ment process.
  1. High lev­el of inter­ac­tion between project team members 
  2. Quick result (work­ing code) at the end of sprints” 
  3. Stim­u­lat­ing change and improve­ment of the prod­uct dur­ing its development 
  4. Direct involve­ment of the client in the work process.
  1. Clear and user­friend­ly scheme of the work process 
  2. The pos­si­bil­i­ty of cal­cu­lat­ing the exact costs spent on the project 
  3. Does not require com­mu­ni­ca­tion costs between all the team members.
  • Risk of end­less changes to the product 
  • High depen­den­cy on team’s lev­el of qual­i­fi­ca­tion and experience 
  • Almost impos­si­ble to cal­cu­late the final cost of the product.
  • Pri­or­i­ty to the for­mal approach to the sequen­tial work process 
  • Client can­not make changes until the end of the prod­uct development 
  • In case of lack of resources, qual­i­ty of the prod­uct is affect­ed due to test­ing stage reduction.
Clients Unilever, a num­ber of banks (Alfa Bank, Home Cred­it, Raif­feisen­bank, etc.) Cis­co Eric­s­son AB, Toy­ota (till 2010)
It will work for you if…
  1. High­ly-expe­ri­enced and high­ly-qual­i­fied team is work­ing on the project.
  2. You are work­ing on a startup.
  3. You need to get a work­ing ver­sion of the prod­uct fast.
  4. Client acts as a part­ner and not an investor.
  5. The prod­uct is being devel­oped in the envi­ron­ment where con­stant change is happening.
  1. The biggest part or the entire workis per­formed outsourcing 
  2. You have a clear con­cept of the prod­uct you would like to get 
  3. You are not lim­it­ed in time or resources for prod­uct development
  4. Cre­at­ing a prod­uct or build­ing a busi­ness is based strict­ly on fol­low­ing sequen­tial taskcompletion.
It will not work for you if…
  • You are not ready to spend addi­tion­al resources on estab­lish­ing dai­ly sta­ble com­mu­ni­ca­tion between all the process participants 
  • the prod­uct needs to be devel­oped by a cer­tain deadline 
  • project’s bud­get is limited 
  • you need detailed doc­u­men­ta­tion for all devel­op­ment processes.
  • You wish to cre­ate an inno­v­a­tive prod­uct or a large project 
  • You are not sure about the con­cept of the project offered 
  • Finan­cial resources are not the key lim­i­ta­tions in your project.


Agile и Water­fall — two com­plete­ly dif­fer­ent meth­ods of devel­op­ment and project man­age­ment. Each of them has gen­er­at­ed dozens of mod­i­fi­ca­tions and meth­ods, sharp­ened” for a spe­cif­ic project format.

The flex­i­ble mod­el will be ide­al for ITcom­pa­nies, start-ups, and projects in inno­v­a­tive areas The cas­cade mod­el does not lose ground in con­struc­tion projects or projects where the key con­straint is the time­frame of the project rather than finance

Tak­ing into con­sid­er­a­tion the specifics of each of the meth­ods and your busi­ness along with risk cri­te­ria, time, and involve­ment of stake­hold­ers, you will be able to inde­pen­dent­ly deter­mine an effec­tive methodology.

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