What is agile project management?
Agile boosts team responsiveness and project success. Learn core principles, frameworks, and tools to deliver faster.
Published Thursday 11 September 2025
Table of contents
Key takeaways
- Implement agile methodology by starting with team education and training on core principles, then choosing an appropriate framework like Scrum or Kanban that matches your business needs and team capabilities.
- Organise work into short iterative cycles called sprints (typically 2-4 weeks) to deliver value to customers quickly and gather feedback for continuous improvement rather than waiting for a perfect final product.
- Form cross-functional teams with diverse skills and clearly defined roles to enable independent project management and faster decision-making through regular collaboration and communication.
- Track key performance indicators such as sprint burndown charts, cycle success rates, and customer feedback quality to measure the effectiveness of your agile implementation and identify areas for improvement.
What is agile project management?
Agile project management is a flexible approach that completes work in short, iterative cycles called sprints, and it's highly popular—a study found that more than 70 percent of organisations use an agile method for software development. It prioritises people over processes, working products over documentation, and adapting to change over following rigid plans.
Key differences from traditional methods:
- Traditional: Linear planning with fixed deadlines and big launches
- Agile: Flexible cycles with continuous improvement and regular releases
Core process phases:
- Planning and designing
- Developing and testing
- Deploying and reviewing
- Repeating the cycle with improvements
The 4 core values of agile
Agile is guided by four core values. These help your team focus on your customers and your business.
- Individuals and interactions over processes and tools. When you value people and encourage collaboration, your team finds better solutions than by relying on rigid processes.
- Working software over comprehensive documentation. Focus on creating value for your customer, with documentation supporting your working product.
- Customer collaboration over contract negotiation. Work with your customers throughout the project to make sure the final product meets their needs. This approach adds more value than following strict contract terms.
- Responding to change over following a plan. Business needs and markets can change quickly. Agile allows you to adapt to these changes, giving you a competitive edge.
The 12 agile principles in business
The 12 agile principles form the foundation of agile methodology, guiding how teams work together, deliver value, and continuously improve their processes.
These principles help businesses:
- Deliver value faster to customers
- Adapt quickly to changing requirements
- Build stronger, more collaborative teams
- Maintain sustainable work practices
1. Early and continuous delivery
Early and continuous delivery ensures customers receive value quickly rather than waiting months for a finished product.
How to apply it: Release basic versions of your product or service early, then use customer feedback to guide improvements in each subsequent release.
2. Responding to changing requirements
Responding to changing requirements means treating change as an opportunity rather than a disruption, even late in a project.
Business benefit: This flexibility helps you adapt quickly to market shifts and customer needs.
3. Frequent delivery
Agile businesses regularly improve their products or services to enhance quality, mitigate risk, gather feedback early, and stay competitive.
4. Close collaboration
Agile working emphasises collaboration across all areas of the business. Connecting regularly – such as by holding daily standup meetings – encourages transparency and discussion of important issues. This helps people make decisions and stay aligned between a project's goals and its implementation.
5. Motivated team members
Motivated teams find creative solutions, produce higher-quality work, and get the job done. Build a supportive environment where your team has the trust and freedom to make decisions, move fast, and innovate.
6. Face-to-face communication
Direct communication brings your team together and helps minimise misunderstandings. When cross-functional teams connect in person, they find solutions and share expertise quickly.
7. Working product is the primary measure of progress
Focus on tangible outputs and meaningful results. Regularly review your products or services to make sure they meet customer needs and achieve your business goals. This helps you maintain trust with your customers and stay competitive.
8. Sustainable development
Agile frameworks help you improve continuously. Build a workflow that lets your team work at a steady pace. This supports a healthy work-life balance and reduces the risk of burnout.
9. Technical excellence and good design
Aim for technical excellence and good design so your team can adapt quickly, create scalable solutions, and focus on your customer.
10. Embracing simplicity
Keep things simple and eliminate unnecessary work. This helps your team focus on critical tasks that add real value for your customers and business.
11. Self-organising teams
Empower your teams to make decisions, innovate, and own their work. When your teams organise themselves, they invest more in projects and use resources better to meet your business and customer needs.
12. Regular reflection and improvement
Continuous improvement is a key benefit of agile working. Set aside time to reflect on your successes and find ways to boost efficiency and improve how your team works.
Traditional vs agile project management methodologies
Traditional project management is linear – it follows a strict plan towards a clearly defined target. The phases of research, scope, design, and development happen one after the other, and teams provide management and support after launching. This method, the 'waterfall' approach, relies on the predictability of people, tools, and outcomes in each phase.
Agile project methodology is cyclical. It helps you adapt and evolve your product or service over time. By working in sprints, your team can keep developing, testing, and reviewing after launch.
Which business types can benefit from agile methodologies?
Agile methodologies benefit businesses that need flexibility, regular customer feedback, and the ability to adapt quickly to changing requirements.
Your business is a good fit for agile if you have:
- Ongoing deliverables: Projects with multiple phases or regular releases
- Uncertain requirements: Goals that may evolve based on customer feedback
- Close customer engagement: Regular interaction and collaboration with clients
Industries successfully using agile: Software development, engineering, construction, advertising, finance, healthcare, pharmaceuticals, aerospace, and government sectors.
Why it works: Agile creates productive teams that thrive on rapid change and deliver value incrementally rather than waiting for a perfect final product.
The different types of agile frameworks
There are several agile frameworks that apply specific approaches to project planning, management, and delivery.
Scrum
Scrum is a simple framework that helps you tackle complex problems and diverse tasks.
Scrum organises work into short cycles with specific deadlines, called sprints, that usually last between two and four weeks.
The framework assigns clear roles, such as product owner, scrum master, and development team, and encourages collaboration.
You can deliver results and adjust priorities quickly in a structured yet flexible environment. Review your work after each sprint to respond to changes in the market or your customers' needs.
Regular collaboration takes time and buy-in from your whole team. Keep your long-term objectives in sight, as sprints can encourage a focus on short-term goals.
Kanban
The Japanese word kanban translates roughly as 'signboard' or 'visual card'. Kanban organises tasks into visual cues on a physical or digital board, showing when tasks are started, underway, or complete.
A kanban board gives you a clear overview of work underway to achieve your business goals. It helps you visualise workflow, track progress, identify bottlenecks, and centralise information on your deliverables. By showing work in progress, your team is encouraged to complete tasks before starting new ones.
Kanban depends on your team managing time well. Without this, your team could struggle with task overload and the minimalist structure of kanban.
Extreme programming (XP)
Extreme Programming (XP) is a less-regimented agile framework that emphasises regular releases of work in short sprints.
Extreme Programming (XP) lets you deliver results and make changes quickly. Your team works in short bursts to produce quality output, satisfy customer needs, and keep your product backlog low. Rapid change can also reduce costs over time by removing the need for major updates.
While XP enables continuous improvement and fast project development, XP can:
- Be resource intensive
- Take lots of effort, collaboration and creativity, and rapid feedback from the customer to be successful
The benefits of using agile techniques in business
These include:
- Teams have the space to adapt, learn, and respond to change quickly and effectively
- Faster releases deliver value to the customers quickly, improving customer satisfaction
- Working in an iterative way improves quality
- Regular collaboration improves team dynamics and strong communication, including with stakeholders
- Delivering updates in sprints improves risk management across the project
How to implement agile methodologies in your business
Successful agile implementation transforms how your team works, delivering faster results and better customer satisfaction through structured flexibility.
Four essential requirements:
- Team education: Training on agile principles and chosen framework
- Cross-functional teams: Members with diverse skills working together
- Defined roles: Clear responsibilities within the agile structure
- Iterative processes: Work organised into regular cycles with reviews
1. Educate and train your team
Team education builds the foundation for successful agile adoption by ensuring everyone understands the why and how of agile working.
Implementation steps:
- Run an introductory workshop to explain agile principles and their benefits, using real examples from your industry
- Provide hands-on training on the specific tools and practices your team will use every day
- Share success stories to show how similar businesses improved efficiency and customer satisfaction with agile methods
2. Choose an agile framework
Find an agile framework that suits your business needs by assessing the strengths of each framework against your business goals and team capabilities.
Keep in mind the resource requirements for these frameworks. For example, Extreme Programming (XP) requires a robust team and regular collaboration.
3. Form cross-functional teams
Cross-functional teams help you optimise collaboration, creativity and problem-solving in your projects.
Create small teams with members who have different skills. This lets your agile teams manage different parts of a project independently and access other skills quickly.
Support your teams by fostering a culture of collaboration, learning, and self-management.
4. Define roles and responsibilities
Clearly define roles within your agile teams. Typical roles in Scrum include the product owner, scrum master, and development team.
Make sure everyone knows their responsibilities and how they will contribute to your team's success.
5. Plan work in iterations
Divide your project into chunks and plan the work in sprints or iterations. Use tools, such as a digital kanban board, to help your team work in an agile way.
Review your work regularly to share progress, gather feedback, and make changes. Use these reviews to generate insights and keep improving.
How to measure your success with agile KPIs
Agile key performance indicators (KPIs) help you measure whether agile methods are improving your business performance and team effectiveness.
Essential metrics to track:
- Track sprint burndown charts to see if your team is completing planned work on time and to identify bottlenecks
- Measure sprint cycle success to check how consistently your team meets sprint goals and deadlines
- Track team satisfaction scores to see if agile working improves engagement and reduces burnout
- Monitor customer feedback quality to find out if faster, iterative delivery leads to higher satisfaction
- These metrics help you fine-tune your agile approach and show the value of your investment in new ways of working.
Can software help manage agile teams?
Agile software tools remove manual tracking and communication bottlenecks that slow your team down. This lets you focus on delivering value, not managing paperwork.
Key software benefits:
- Centralised information: All project and sprint data in one accessible location
- Visual progress tracking: Dashboards and kanban boards show work status at a glance
- Automated workflows: Reduce time spent on administrative tasks
- Enhanced communication: Built-in collaboration features keep everyone aligned
Popular agile tools: Jira, Trello, Asana, and Monday.com each offer different strengths. Choose based on your team size, technical needs, and budget.
Start with a simple tool and upgrade as your agile practices grow. Avoid overwhelming your team with complex features at the start.
Getting started with agile in your business
Adopting an agile mindset can transform your business. You become more efficient, responsive, and customer-focused. Start small, train your team, and choose the right tools to build a culture of continuous improvement and drive growth.
Get a clear view of your finances to make smart, agile decisions. Real-time insights into your cash flow and business performance help you adapt to new opportunities. Try Xero for free to see how easy it can be.
FAQs on agile methodology
Here are common questions and answers small business may have about agile methodology.
1. Is agile suitable for non-IT projects?
While agile workflows are commonly used for IT projects, they're also useful in other industries, with a global survey finding more than a third of organisations are widely using agile in functions like R&D, marketing, and finance where teams need to manage and execute complex projects. These include:
- Marketing and advertising
- Manufacturing
- Engineering and construction
- Finance and banking
- Healthcare and pharmaceuticals
Agile methodologies can be used for projects that require planning, design, testing and release over a product or service lifecycle.
2. How can you manage agile teams remotely?
Although agile working favours face-to-face connection and collaboration, some best practices for managing remote teams using agile methodologies are to:
- Hold regular, open communication over video, phone and messaging to foster collaboration
- Use digital collaboration tools like Zoom, Asana, and Google Meets
- Ensure each team member understands the goals and outcomes of each sprint
- Set clear expectations for each team and team member
- Acknowledge achievements and completion of tasks and goals
- Encourage autonomy and flexibility in your team to achieve the tasks and outcomes of each sprint.
3. Can sole traders use agile methodologies?
While agile typically applies to teams and larger projects, you can still work with an agile mindset and approach as a sole trader.
- Choose the agile methodology that best suits your business,
- Organise your tasks into sprints or iterations
- Focus on continuous improvement and adaptation
Use a digital tool to guide your agile work and provide visual support, such as a kanban board.
Disclaimer
Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.
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