Project management fundamentals - Waterfall vs agile approac...

Learning Outcomes

After reading this article, you will be able to explain the main principles of project management, distinguish between the waterfall and agile methodologies, describe the core stages of a project life cycle, and recognise how project approaches impact team roles and project outcomes. You will also be able to identify which approach is appropriate for different business situations and understand how effective project management contributes to organisational success.

ACCA Business and Technology (BT) Syllabus

For ACCA Business and Technology (BT), you are required to understand project management fundamentals as part of business structure and process knowledge. In particular, focus your revision on:

• The definition and purpose of projects in organisations
• The common stages of a project life cycle and their objectives
• The structure and main features of traditional (waterfall) and agile project management methods
• The advantages, limitations, and suitability of waterfall and agile approaches for different projects
• The roles and responsibilities of project teams and key participants
• The importance of matching project approach to organisational goals and environment

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What are the four main stages in a typical project life cycle?
2. State one key difference between waterfall and agile project management.
3. For which types of projects is an agile approach generally more suitable, and why?
4. Who is normally responsible for day-to-day project delivery, and how might this role differ between waterfall and agile projects?

Introduction

Projects enable businesses to create change, improve products, or deliver new services. Project management is a disciplined process that guides resources and activities to achieve specific objectives within set constraints such as time, budget, and quality.

There are two widely used project management approaches: the traditional waterfall method, which follows a fixed sequence of phases, and agile, which allows for iterative, flexible cycles. Understanding the differences, advantages, and best uses for each is essential for effective project delivery, especially as organisations face constant technological and market changes.

Key Term: project
A temporary initiative undertaken to create a unique product, service, or result with defined objectives, start, and end.

THE PROJECT LIFE CYCLE

Most projects, regardless of sector, move through a set of standard stages. Recognising these stages helps organisations structure project work and manage progress.

Main stages

1. Initiation: Define the need, objectives, scope, and feasibility. A business case justifies the project’s value.
2. Planning: Develop detailed schedules, budgets, resource plans, and risk assessments. Set measurable deliverables for each phase.
3. Execution: Carry out the project plans. Teams coordinate their work, manage issues, and control quality.
4. Closure: Complete all tasks, review performance, release resources, and formally hand over deliverables.

Key Term: project life cycle
The structured sequence of stages—from initiation to closure—that a project passes through to achieve its objectives.

Worked Example 1.1

A company wants to develop a new mobile app. Outline briefly what occurs in each of the four project life cycle stages.

Answer:
Initiation – Evaluate the app’s viability and business case. Planning – Create a timeline, budget, and assign staff. Execution – Develop, test, and refine the app. Closure – Launch the app, gather feedback, and close the project team.

PROJECT MANAGEMENT APPROACHES

There are two dominant approaches to managing projects: waterfall and agile. Each has different strengths, weaknesses, and areas of best application.

WATERFALL PROJECT MANAGEMENT

The waterfall method arranges project work into clear, sequential phases: each phase must be completed before the next begins. This is especially suited to projects where requirements are clear and unlikely to change, such as construction or regulatory compliance.

Key features:

• Linear phases: requirements → design → build → test → deploy
• Detailed documentation for each step
• Changes after planning are difficult and costly
• Progress is measured by completion of stages and formal sign-offs

Key Term: waterfall approach
A traditional project management methodology where each stage of the process is completed sequentially, with little overlap and minimal scope for changing requirements.

Worked Example 1.2

A manufacturing firm is relocating its warehouse. Why is the waterfall approach likely to be suitable?

Answer:
The requirements (new location, floor plans, equipment) are fixed early, and tasks must be performed in strict order—plans must be drawn before construction starts. The waterfall method provides clear deadlines and control.

AGILE PROJECT MANAGEMENT

Agile approaches are designed for environments where requirements may change, and rapid delivery of features is valued. Projects are divided into short cycles (often called “iterations” or “sprints”), with functionality reviewed and adjusted at the end of each cycle.

Key features:

• Iterative and incremental delivery of outputs
• Regular stakeholder feedback and close customer involvement
• Emphasises team collaboration and flexibility
• Scope and requirements may develop as the project progresses

Key Term: agile approach
A flexible project management methodology using iterative cycles and frequent reassessment of goals and deliverables, enabling adaptation to changing requirements.

Worked Example 1.3

An online retailer is updating its website. Why might it choose agile management?

Answer:
Customer needs and technology may change rapidly, and the company wants to deliver improvements quickly. Agile allows small releases, constant testing, and quick responses to feedback.

COMPARISON: WATERFALL VS AGILE

Exam Warning Do not assume all projects can use agile. Waterfall remains necessary for projects needing strict regulatory or safety controls, or where early certainty is required.

ROLES AND RESPONSIBILITIES

Regardless of method, most projects have similar roles, though involvement varies by approach.

• Project manager: responsible for coordinating, planning, and managing delivery within scope, time, and budget.
• Project team: carry out tasks and communicate progress and issues.
• Stakeholders: provide input, review deliverables, and sometimes approve decisions.
• Product owner (agile): represents customer needs, sets priorities, and ensures team delivers value.

In waterfall, the project manager has central authority and control. In agile, responsibility is shared more widely; teams organise their work, and continual feedback shapes results.

Key Term: project manager
The individual accountable for leading a project, overseeing progress, managing risks, and ensuring objectives are delivered.

SUITABILITY OF METHODS

Waterfall is often best when:

• Requirements are clear and unlikely to change
• Outcomes must be predictable and controlled (e.g., infrastructure build)

Agile is preferred when:

• Rapid delivery is valuable
• Requirements are expected to change
• Innovation and user feedback drive product improvement (e.g., digital products)

Revision Tip

Match your project approach to needs: use waterfall for predictability, agile for adaptability. In exams, always justify your choice based on project characteristics.

Summary

Selecting the correct project management approach is critical for delivering business change effectively. Waterfall provides structure and control in predictable projects, while agile enables frequent adjustment and collaboration in fast-moving situations. Knowledge of both methods allows you to guide teams, select suitable tools, and respond to the needs of modern organisations.

Key Point Checklist

This article has covered the following key knowledge points:

• Define a project and outline typical project life cycle stages
• Explain the waterfall and agile management methods, highlighting differences
• Identify appropriate contexts for waterfall and agile approaches
• List key roles and responsibilities in project teams
• Assess how to align project approaches to organisational needs

Key Terms and Concepts

• project
• project life cycle
• waterfall approach
• agile approach
• project manager