Agile vs Waterfall: Which Project Management Approach is Better?

Insight 10-07-2024

Nearly half of all project managers do not use a structured project management methodology, which significantly impacts project success.

And yet, project managers without a defined methodology are 15% less likely to meet their objectives and stay within budget, and 16% more likely to exceed their deadlines.

This demonstrates the crucial importance of using an effective project management approach.

This article is for project management professionals seeking a deeper understanding of the two predominant methodologies: Agile and Waterfall. It provides a comprehensive exploration of both approaches, as well as guidance on choosing the right model based on your specific project needs.

Table of contents

Understanding Agile methodology
Understanding Waterfall methodology
Agile vs Waterfall
Choosing the right approach for your organisation
Agile and Waterfall case studies
Implementing Agile and Waterfall with PM3

Understanding Agile methodology

Agile methodology is a dynamic project management methodology that emphasises flexibility, continuous feedback and iterative learning throughout the development process

This methodology is rooted in the Agile Manifesto, which was introduced in 2001 by a group of forward-thinking developers who proposed a radical shift from traditional, rigid project management approaches. 

The manifesto prioritises individuals and interactions over processes and tools, working software over comprehensive documentation, customer collaboration over contract negotiation, and responding to change over following a plan.

The core of the Agile methodology involves breaking down large projects into smaller, manageable units known as iterations, or sprints, typically lasting between one to four weeks. 

During each sprint, cross-functional teams work on various aspects of the project, from design and development to testing and quality assurance. This allows for regular reassessment of a project’s direction and adaptability to change.

Key components of Agile project management include Scrum, Kanban and Lean

Let’s look at each one in more detail: 


Scrum is perhaps the most widely implemented Agile framework. It organises teams around a clear goal and divides the project into sprint cycles. 

Each sprint begins with a sprint planning meeting where the team identifies a small set of features or tasks to complete. 

Daily stand-up meetings help keep the team aligned, and sprint reviews and retrospectives at the end ensure that lessons are learned and integrated into the next sprint.


Kanban is another Agile methodology, which focuses on lean principles and just-in-time delivery without overloading team members

In Kanban, work items are visualised on a board, allowing team members to see the state of every piece of work at any time. 

This promotes a continuous flow as Agile teams pull work items from a backlog as they have capacity rather than having work pushed onto them.


Lean focuses on optimising efficiency, minimising waste and using empirical methods to decide on changes, which can be particularly beneficial in startups and organisations looking to innovate rapidly.

The benefits of adopting an Agile approach are manifold. 

It allows teams to deliver products in manageable increments and gauge their impact and efficacy, enabling a flexible approach to product development

This adaptability is particularly beneficial where projects are likely to undergo scope changes or where there is potential uncertainty in customer requirements. 

Agile also fosters a culture of regular feedback, which enhances customer satisfaction and allows products to better meet user needs by integrating suggestions from early stages in the life cycle.

This methodology allows active and ongoing participation of stakeholders and customers. 

Continuous engagement helps to refine product vision and align the development process with customer needs and company goals. It also builds a collaborative and empowering environment for the team members, boosting morale and productivity.

The iterative nature of the Agile method allows for the detection and correction of issues early in the development process, reducing the risk of major setbacks and ensuring project progress remains on track. 

This is complemented by the emphasis on key deliverables at the end of each sprint, ensuring a focus on quality and measurable outcomes.

Understanding Waterfall methodology

The Waterfall methodology, often referred to as the linear-sequential life cycle model, is a project management approach where tasks are completed in a predetermined, linear order. 

This methodology is highly structured and is typically depicted as flowing steadily downwards through several distinct phases – like a waterfall – hence its name. 

Each phase must be completed before the next begins, and there is little to no overlap between phases.

The key phases in the Waterfall project management include:

Requirements gathering and documentation 

This initial phase involves comprehensive documentation where all possible requirements of the system are captured and documented in detail. This is critical to the Waterfall methodology as these requirements are fixed and guide all future stages of the project.

System design

The second phase translates the detailed requirements into a complete system design. It sets a definitive plan and structures that guide the entire system’s architecture and specifications. This design must be approved by project stakeholders before moving to the next phase.


During this phase, the actual development and coding of the software take place. Teams follow the guidelines set during the design phase to build the software. Typically, this is the longest phase of the Waterfall cycle.

Integration and testing

Once the software is developed, it is thoroughly tested for defects. Testing is crucial as once the application moves to the next stage, going back to change functionality is costly and complicated. This phase ensures that the software operates according to the specified requirements.


After successful testing, the system is deployed to a live environment where it becomes available for use. Depending on feedback, the system may return to earlier phases if significant issues are identified.


This final phase involves making changes after deployment, fixing issues not caught during earlier stages and responding to any problems users identify when the system is used in real scenarios.

The Waterfall model is best suited for projects where workflow requirements are well understood and less likely to change over time. 

It is commonly used in construction, manufacturing and software development projects where clear, fixed instructions are required and the scope of the project does not change midway. 

Waterfall‘s highly organised nature makes it easy to estimate timelines, resources and costs at the beginning of the project, which can be crucial for projects with tight budgets and stringent timelines.

Agile vs Waterfall

Choosing between Agile and Waterfall methodologies requires a good understanding of their fundamental differences and how these impact the management and success of projects. 

Both methodologies offer distinct advantages and cater to different project needs, but they also carry inherent limitations which are crucial to consider when planning a project’s strategy.

Key differences in methodology

The Agile model is characterised by its flexibility, iterative development and the continuous involvement of customer feedback throughout the project lifecycle

It adopts an incremental approach where project tasks are broken down into small, manageable units known as sprints or iterations, which are continually assessed by the project team and stakeholders

This iterative process allows for regular adaptation based on feedback and changing requirements, aiming to deliver the highest value in the shortest time.

Waterfall, on the other hand, is a linear and sequential approach where project phases (such as conception, initiation, analysis, design, construction, testing, deployment and maintenance) happen in a fixed order. Each phase must be completed before the next one begins, and there is little to no revisiting of a phase once it is closed. 

This approach is better suited for project plans with well-defined requirements that are unlikely to change, allowing for meticulous planning, coordination and continuous improvement.

Adaptability and stakeholder involvement

One of Agile’s strongest features is its adaptability. In an Agile project, change is expected and welcomed, even late in development. This flexibility makes it particularly effective in dynamic sectors where end-user needs can shift rapidly, such as Agile software development or product design.

Conversely, the Waterfall methodology works best in environments where changes are minimal and predictability is paramount. This can include large construction projects or aerospace manufacturing, where deviations from the plan can lead to significant delays and increased costs.

In terms of stakeholder and customer involvement, Agile promotes ongoing interaction with stakeholders throughout the project, facilitating frequent updates and adjustments based on direct feedback. 

This continuous loop of feedback and improvement aims to enhance customer satisfaction and align the final deliverables more closely with customer expectations.

Waterfall methodology generally involves stakeholder input primarily at the requirements and design stages, with limited engagement throughout the subsequent phases. This can make it challenging to incorporate changes later on without disrupting the project schedule and budget.

Impact on project management and outcomes

The impact of choosing between Agile and Waterfall extends to how projects are managed and the nature of their outcomes. 

Agile’s flexibility often leads to better product quality as the end product undergoes continuous testing and revision. However, it can sometimes lead to scope creep if it’s not carefully managed. This will increase the project’s duration and cost.

On the other hand, Waterfall‘s structured approach lends itself well to projects requiring rigorous adherence to schedules and budgets. 

Its phased development cycle helps tracking of progress and resource allocation, reducing the likelihood of missed deadlines and budget overruns. 

However, the lack of flexibility can result in difficulties adapting to new insights or requests that arise late in the project.

Choosing the right approach for your organisation

So which is the best fit for you? 

Both methodologies have their merits, but aligning the right approach with your project’s needs can significantly influence its success.

Let’s look at some factors to consider before you make a decision:

Project requirements and scope

The nature of your project’s requirements is perhaps the most crucial factor in deciding between Agile and Waterfall

Agile is best for projects where requirements are expected to evolve or are not fully defined at the outset. 

It allows for flexibility and continuous refinement of the project scope, making it ideal for software development, product innovation and other dynamic fields, especially where user feedback plays a big part in the project’s development.

On the other hand, Waterfall is a better fit for projects with well-defined, stable requirements that are unlikely to change. 

This includes construction projects, certain types of manufacturing, or projects in highly regulated industries where changes can introduce significant delays and increase costs.

Teamwork dynamics

The composition and distribution of your team is another factor that should influence your choice of methodology. 

Agile requires a high degree of collaboration, open communication and flexibility among team members

It is well-suited for teams that can work closely together or are cross-functional, often located in the same geographical area (or effectively coordinated if remote).

Waterfall, with its sequential phases, might be a better fit for teams that are more hierarchical or dispersed, where tasks can be completed independently without the need for constant collaboration.

Stakeholder engagement and expectations

The level of stakeholder engagement in your project should also guide your methodology choice. 

Agile encourages ongoing involvement from all stakeholders, including frequent updates and adjustments based on feedback. So, it is suitable for projects where stakeholder inputs and changing needs are an integral part of the project lifecycle.

Conversely, if stakeholder requirements are clear and agreed upon upfront, and minimal engagement is needed throughout the project, then Waterfall could be more effective. 

It’s an approach that works well in environments where once a plan is set, only minimal deviation is expected or acceptable.

Risk management and flexibility

Assessing the level of risk and the need for flexibility throughout the project lifecycle is essential. 

Agile provides the ability to pivot and adapt quickly, so it is great for managing projects with high uncertainty or fast-changing external conditions. 

It’s an iterative approach, so it allows teams to identify issues and deal with them quickly, which reduces overall risk.

Waterfall, which is more structured but less flexible, is better at managing risk through rigorous documentation and phase-based testing before moving on to the next stage.

This can prevent significant issues arising late in the project. It is a good approach for a project where adherence to budget, scope and time is more critical than flexibility.

Embracing the hybrid approach

The emergence of hybrid methodologies represents an evolution in project management, combining the strengths of both Agile and Waterfall while mitigating their limitations.

According to a recent Harvard Business Review article, hybrid methods have evolved organically as a response to the complex and varying demands of modern projects. 

These methodologies incorporate the flexibility of Agile with the structured planning of Waterfall, allowing organisations to adapt to changing needs while maintaining a clear project trajectory.

Flexibility and structure: Hybrid methodologies, like those implemented by Philips for its HealthSuite digital platform, illustrate the benefits of combining Agile’s rapid, iterative releases with Waterfall‘s strict adherence to documentation and safety guidelines. This approach has enabled Philips to enhance product quality, reduce time to market and achieve predictable cost savings.

Phased and iterative: DBS Bank exemplifies the hybrid approach by using phased planning for infrastructure upgrades while adopting iterative development for customer-facing digital services. This strategy allowed the bank to overhaul legacy systems and introduce new services, contributing to a significant revenue increase from S$9.6 billion in 2014 to S$14.6 billion in 2020.

Customer involvement and predictability: British Telecom has leveraged hybrid methodologies to balance customer involvement and project predictability. For its digital services, such as the rollout of the new 5G network, BT employed Agile techniques to integrate customer feedback early and often. Conversely, for more predictable infrastructure projects like new data centres, BT applied Waterfall methods to ensure timely and within-budget completion.

Balanced approach and risk mitigation: Ubisoft’s development of Assassin’s Creed Valhalla showcases a balanced hybrid approach. By using Waterfall to plan and develop stable game assets and Agile for dynamic aspects like gameplay mechanics and updates, Ubisoft was able to launch a commercially successful product. Similarly, Tesla’s development of their Model 3 involved a hybrid approach; rigorous planning for the Gigafactory was coupled with Agile’s flexibility for rapid software updates and improvements, enhancing risk management in a complex manufacturing environment.

Efficient use of resources: Zara’s approach demonstrates how hybrid methods can optimise resource usage. Detailed planning and phased development ensure minimal idle resources, while iterative cycles involving cross-functional teams allow for quick adjustments based on market feedback and sales data.

Choosing between Agile and Waterfall (or going for a hybrid approach) should be a strategic decision based on a thorough understanding of your project’s requirements, team capabilities, stakeholder expectations and the flexibility needed throughout the project lifecycle. By aligning the chosen methodology with these factors, organisations can better manage their projects, meet their objectives and enhance overall project success.

Agile and Waterfall case studies

Exploring successful applications of Agile and Waterfall methodologies provides valuable insights into their effectiveness and suitability for different types of projects.

Here are five case studies for each methodology, showcasing how organisations across various industries have successfully implemented these approaches.

Agile case studies

Spotify: Spotify organises its workforce into autonomous ‘squads’ within larger ‘tribes,’ using Agile methodologies to maintain flexibility and encourage rapid innovation. This structure allows for continuous improvement and quick adaptation to market changes.

IBM: IBM implemented Agile practices to enhance collaboration and speed up problem resolution across its software development teams, leading to faster product updates and improved responsiveness to customer demands.

Microsoft: Adopting Agile methodologies in the development of Visual Studio allowed Microsoft to incorporate regular user feedback into rapid product iterations, significantly boosting customer satisfaction and product quality.

Barclays: Barclays transformed its IT operations by implementing Agile across 3,000 team members globally, resulting in shorter development cycles, more frequent releases and a significant increase in productivity and employee engagement.

Zara: Zara uses Agile to manage its design and production processes, enabling the company to quickly move designs from runway to store. This responsiveness is key to Zara’s success in the fast-paced fashion industry.

Waterfall case studies

Boeing 787 Dreamliner: Boeing employed the Waterfall methodology to manage the complex, large-scale project of developing the 787 Dreamliner. Despite initial delays, the structured approach was crucial for meeting rigorous safety standards and managing detailed project phases.

The Panama Canal Expansion Project: This major infrastructure project utilised Waterfall methodology to manage its extensive and sequential construction tasks, facilitating meticulous planning and successful execution over many years.

The Shard, London: The construction of The Shard involved Waterfall methodology to adhere to the strict project scope and architectural requirements, ensuring all phases were completed systematically before proceeding to the next.

Intel: Intel’s use of Waterfall for chip development allows for thorough phase-by-phase testing and validation, essential in the costly and precision-driven field of hardware production.

Apollo Space Programme: NASA’s Apollo missions were managed using Waterfall, with its structured phases enabling the precise and sequential completion of tasks necessary to land humans on the moon and safely return them to earth.

Implementing Agile and Waterfall with PM3

After understanding the advantages and applications of both Agile and Waterfall methodologies, the next step for project management professionals is to apply these insights practically. The choice between these methodologies – or a blend of both – can significantly impact project outcomes. This is where PM3, an award-winning PPM tool from BestOutcome, becomes instrumental.

PM3 is uniquely designed to support both Agile and Waterfall methodologies, accommodating the diverse needs of projects ranging from straightforward tasks to complex transformation programmes.

Agile and Waterfall support

Embracing both structured and flexible project management practices, PM3 is built to accommodate a comprehensive range of methodologies. It supports the structured phases of Waterfall, specifically aligned with Prince2™ principles, ensuring that each phase of your project is thoroughly planned and executed.

Additionally, PM3 embraces Agile practices by including features like user stories, sprints and Kanban boards. This dual capability allows project managers to harness the strengths of both methodologies, applying them as needed to enhance project adaptability and success.

Effective resource management

Managing resources efficiently is critical, whether you are iterating rapidly with Agile or following a strict sequence with Waterfall. PM3 helps identify and manage resource pinch points and ensures that your projects are appropriately staffed, supporting effective decision-making and optimisation of resources.

Customisable dashboards and reports

With over 100 out-of-the-box reports and adaptable dashboards, PM3 allows you to monitor and present project progress using metrics that matter most. This feature supports both Agile’s need for continuous improvement and Waterfall’s requirement for detailed project phase reviews.

Enhanced collaboration tools

PM3 fosters team collaboration, which is essential for Agile environments but equally beneficial in Waterfall projects. The PM3Team app ensures that with team members either in the same room, or distributed across different locations, collaboration is uninterrupted and effective.

Whether you are managing a simple project or a complex portfolio, PM3 provides the clarity and control needed to ensure that your projects deliver the desired outcomes.

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