A company is moving its headquarters using a predictive approach, while its information systems migration will use an agile approach. The project manager must choose a contract type for the vendor migrating the systems and wants to control finances while delivering results. How should the project manager handle this?
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Correct answer: Use fixed-price increments tied to completion of user stories..
Why this is the answer
Using fixed-price increments tied to the completion of user stories is the best approach for an agile information systems migration when the project manager wants to control finances and ensure results. This method aligns with agile principles by breaking the work into manageable, value-driven chunks (user stories) and provides financial control by setting a fixed price for each increment. It allows for regular payment upon demonstrable progress, motivating the vendor and providing the company with predictable costs for delivered value. Signing a single contract for the entire migration would be less suitable for an agile project due to its inherent flexibility and evolving requirements. Confirming payment after each project retrospective doesn't guarantee delivered value, as retrospectives focus on process improvement, not necessarily completed work. Negotiating payment only after the entire migration is complete is risky for the vendor and offers less financial control for the company throughout the project.
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