If you are hiring a software or app agency, you will almost certainly hear that it “works agile”. That is useful to know, but it doesn’t tell you much on its own. This guide explains what agile and waterfall actually mean, where each methodology still fits, and what the choice means for your budget, your contract and your own time as the customer.
Waterfall
Each stage is signed off before the next starts
- 1Requirements
- 2Design
- 3Build
- 4Test
- 5Launch
Agile
Short sprints, with working software every time
- Plan
- Build
- Test
- Review
Sprint1 to 4 weeks
The key differences in short
- Waterfall plans the whole project up front and then works through it in stages: requirements, design, build, test, launch. You see the finished product near the end.
- Agile delivers the product in short, iterative cycles. Each cycle produces working software you can see and use, and the plan changes as the team and the customer learn.
Neither is right for every project. Waterfall suits work that is well understood and unlikely to change. Agile suits work where you will learn as you go, which is most new software.
Where the waterfall methodology came from
The sequential model is usually traced to a 1970 paper by Winston Royce, “Managing the Development of Large Software Systems”. It’s worth knowing that Royce did not recommend the simple version. After describing the step-by-step sequence, he wrote: “I believe in this concept, but the implementation described above is risky and invites failure.” His point was that testing comes at the very end, which is the first time anyone finds out whether the design actually works.
That is still the main risk with the waterfall approach today. Each stage is signed off before the next one starts, so if the requirements were wrong, you find out late, when changes are most expensive.
What agile project management actually means
Agile is a set of values rather than a single method, which is why people talk about an agile mindset or an agile approach rather than one agile methodology. The Manifesto for Agile Software Development (2001) says its authors value:
- individuals and interactions over processes and tools
- working software over comprehensive documentation
- customer collaboration over contract negotiation
- responding to change over following a plan
The principles behind it include delivering working software “frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale”, and welcoming changing requirements “even late in development”.
Scrum is the most common way agencies put agile project management into practice. The Scrum Guide describes Sprints as fixed length events “of one month or less”, in which the team turns a selection of work from the Product Backlog into a usable Increment, then reviews it with stakeholders and adjusts.
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Agile and waterfall project management side by side
| Waterfall | Agile | |
|---|---|---|
| Planning | Detailed plan and spec up front | High-level plan, detail added each sprint |
| When you see working software | Near the end | Every sprint |
| Changing requirements | Formal change requests | Expected; re-prioritize the backlog |
| Your time commitment | Heavy at the start and at acceptance | Regular, throughout (reviews, decisions) |
| Usual contract | Fixed price for the whole scope | Time and materials, a capped budget or fixed price per sprint |
| Main risk | Building the wrong thing and finding out late | Budget drift and a product that is never “finished” |
| Good fit | Clear, stable requirements; compliance-heavy work with fixed specs | New products, MVPs, anything with real uncertainty |
How the choice affects scope, contract and budget
This is the part buyers most often miss. The delivery method and the commercial model need to match.
A waterfall project usually goes with a fixed price contract: you agree the full scope, and the agency agrees a price for it. That gives you budget certainty, but every change becomes a negotiation.
An agile project usually goes with time and materials, often with a monthly cap or a fixed price per sprint. You get a more flexible plan, but you need to manage scope actively, because the backlog can grow forever if nobody says no.
A common middle path is a short discovery phase run as a fixed-fee project, followed by agile delivery in sprints with a budget cap. Some firms build their whole offer around a structure like this. Hyperact in Leeds, for example, describes engagements of 12 weeks or more with teams of three or more people, while Build Me App offers fixed-price proposals and Foresight Mobile publishes prices for defined services.
What an agile team asks of you as the customer
Agile only works if the client side is involved. The agency’s team plans and builds, but you decide what matters most. Make sure you can provide:
- A product owner. One person on your side who can make decisions about priorities quickly. If every decision needs a committee, agile slows down.
- Time for sprint reviews. Usually an hour or two every one or two weeks, to see the work and give feedback.
- Access to the team’s board. Most agencies track sprints in a shared project tool. Ask for a login so you can see progress between reviews; SaaSPic compares project management software, including the agile tools built around sprints and backlogs.
- A clear definition of done. What has to be true before a feature counts as finished (tested, documented, deployed).
If you can’t commit that time, a more plan-driven approach with fewer decision points may genuinely suit you better.
Kanban and hybrid approaches
Not every agency works in sprints. Some use Kanban, which the Kanban Guide describes as “a strategy for optimizing the flow of value through a process”. Instead of fixed-length sprints, the team pulls work from a prioritized list as capacity frees up, shows every item on a board, and limits how much is in progress at once. It suits support, maintenance and steady improvement work, where requests arrive continuously.
Many projects also mix the two methodologies. A common pattern is a waterfall-style discovery stage, with requirements, designs and an estimate signed off together, followed by agile delivery in sprints. That gives your finance team a planned budget and still lets the team change course as it learns. If an agency proposes a hybrid, ask which decisions are fixed at the start and which are left open for each sprint.
When the waterfall model is still the right call
Waterfall isn’t dead. It still makes sense when:
- the requirements are fixed by something outside your control, such as a regulation, an industry standard or a published API you have to integrate with
- the project is small and well understood, such as a defined data migration or a website rebuild with an agreed design
- the budget has to be fixed and approved in full before any work starts
Even then, ask the agency to show you working pieces during the build. A demo halfway through costs little and can save a lot.
Questions to ask an agency about its planning and process
- How long are your sprints, and what will I see at the end of each one?
- Who will be our product owner contact, and who is yours?
- How do you estimate, and how do you report progress against budget?
- What happens when we want to change priorities mid-project?
- What is your definition of done?
- How does your delivery method match the contract you are proposing?
Finding a firm
Browse software development companies, custom software developers and app development companies on TechBonna. If the location of the team matters to you, our guide to onshore, nearshore and offshore development covers the trade-offs.
Sources
- Winston W. Royce, “Managing the Development of Large Software Systems” (1970), copy hosted by Praxis Framework: https://www.praxisframework.org/files/royce1970.pdf (read 29 Oct 2026)
- Manifesto for Agile Software Development (2001): https://agilemanifesto.org/ and Principles behind the Agile Manifesto: https://agilemanifesto.org/principles.html (read 29 Oct 2026)
- The 2020 Scrum Guide, Ken Schwaber and Jeff Sutherland: https://scrumguides.org/scrum-guide.html (read 29 Oct 2026)
- The Kanban Guide (May 2025), Orderly Disruption Limited and Daniel S. Vacanti, Inc.: https://kanbanguides.org/english/ (read 29 Oct 2026)
- Engagement and pricing statements quoted from the firms’ own websites, as recorded in TechBonna listings (checked 29 Oct 2026): Hyperact (hyperact.co.uk), Build Me App (buildmeapp.io), Foresight Mobile (foresightmobile.com)