Scrum

What it means

Scrum is a framework for building software in short cycles. It defines three accountabilities, the product owner, the scrum master and the developers, plus five events and three artefacts; it prescribes no engineering practices or tools, which the team adds itself.

It is not a project plan with a fixed scope: the cycle length and the team capacity are fixed and the scope moves. It differs from kanban in taking work as a batch for a whole sprint, where kanban pulls it continuously as capacity frees up.

The artefacts are the product backlog, the sprint backlog and the increment, which comes with a definition of done. That definition is what decides what counts as delivered at the end of a sprint; without it the team reports work that can be neither deployed nor handed over. This is where scrum differs from a roadmap, which says where the product is heading but not what is finished.

How it works in practice

In a supplier relationship scrum sits badly with a contract for work at a fixed price against a fixed specification. The usual answer is a framework contract billed for team capacity with an acceptance record after each increment.

For VAT a service supplied in parts or repeatedly is treated as supplied no later than the last day of the period the payment relates to. It pays to line the billing period up with the sprint length and to tie a firm milestone to acceptance.

When a company builds software with its own team, the sprint records serve the accounts as well: they help separate development that may give rise to a long-term intangible asset from routine maintenance that is simply expensed. We therefore suggest the team logs hours in every sprint by type of work, not only by task.

What to watch out for

The most expensive combination is a fixed price for a fixed specification delivered in sprints. Scope shifts at planning, nobody writes the contract amendments, and at handover the customer pays only for what the annex lists; the sprints worked stay uninvoiced.

When the team is made up of sole traders who attend the daily meetings, work on the product owner’s instructions and bill their hours to a single customer, the relationship starts to look like dependent employment. A labour inspectorate check can treat it as illegal employment, with a fine for the customer and back payment of social and health contributions.