Purpose – The purpose of this paper is to increase the understanding of the main challenges of the contracting process and project contracts in the context of project business characterized by a high level of complexity and uncertainty. The authors argue that understanding contracting as a flexible process and as a business tool will contribute to creating more value in projects which are implemented in constantly changing circumstances or which require gradual and iterative development. Design/methodology/approach – This is a conceptual paper with illustrative examples from the software industry. Findings – A prevailing approach for both managing contracts and the contracting process focuses on careful planning and drafting of contracts that protect each party in the case of conflicts and disagreements. The underlying assumption is that all activities can be planned and documented in a formal contract. According to this approach, the contracting process is seen only as a bargaining negotiation and the project contract as a detailed agreement of the responsibilities and safeguarding clauses to protect one’s position in the event of conflicts and failures. However, in the context of project business characterized by complexity and uncertainty, there is a need for flexible project contracts. The authors suggest that there are two fundamentally different approaches to implementing flexibility in both the contracting process and the project contract: postponing the decision until there is adequate information for decision making or making decisions that allow flexible adaptation to changes during the project lifecycle. Practical implications – The authors suggest that organizations in project business should pay closer attention to how contracts are formed and how flexibility is introduced to projects. Organizations are encouraged to see contracts as a business tool, not as rigid documents which are taken into use in case something goes wrong. Originality/value – This paper contributes to the understanding of how to adapt the contracting process to overcome challenges related to uncertainty, especially during the early phases of the project lifecycle. The authors provide a novel perspective on contracting as a process that extends over the lifecycle of a project and on the project contract as an agreement between parties formed during the contracting process. This perspective includes formal contract documents as well as various other documents, oral communication, commitments, actions and incidents.

Agile development methods are widely used among business enterprises. Since the introduction of the Agile Manifesto in 2001, several agile methods have been implemented, first in single-team set-ups and later in larger multi-team set-ups for complex Information Technology (IT) system development. However, the adoption of agile methods has been slow in the public sector. This is also reflected in the academic literature, as there are only a few studies discussing agile adoption in public organizations. This paper contributes to research on the use of agile practices specifically in the context of public organizations, and sheds light on the challenges a public organization may face while adopting these practices. The aim of this paper is to identify and categorize the challenges that may hinder efficient adoption and use of agile methods in public IT projects that include private software vendors. This research is based on a case study of a large governmental office. As a result, this paper presents several categories of identified challenges, the root causes of these challenges, and a discussion of the characteristics of these challenges for the public sector.

Meeting customer needs is considered to be vital for new product success. This study explores customer need identification and related challenges in product management and research and development (R&D) in a market-driven context, where a large number of customers exist. This paper reviews the literature on customer interaction and needs in a product development context. Despite the rich literature, product management and R&D angle have not been sufficiently addressed. Thus, customer need identification and challenges from product management and R&D managers' perspectives are studied in two new product development (NPD) projects: one in business-to-business (B2B) and the other in business-to-consumer (B2C) market. While differences between B2B and B2C markets exist, the results indicate that product management professionals must collaborate with various stakeholders and utilize many information sources to obtain and interpret diverging customer needs. Recommended practices for companies to tackle various customer-need related challenges include systematic ways of working, small cross-functional teams in product definition, and avoiding early handovers between product management and R&D. Besides internal collaboration, product management and R&D professionals should aim for some direct contact with selected external customers to clarify the real and project specific needs, and to build overall understanding about customers.

Proactive contracting is a practice-oriented research stream, and scholars focused on proactive contracting have suggested fundamental changes for corporate contracting. Researchers have proposed that companies should improve their contracting capabilities and corporate lawyers should serve business objectives instead of preparing for possible litigation. The research reported in this paper focuses on two key areas of proactive contracting: the purpose of the project contracts; and the role of lawyers contributing to project contracts. The research goal was to find out whether business managers and corporate lawyers recognize a need for evolution in project contracting as suggested by the proactive contracting literature. The research data were collected using a survey of commercial contracting professionals, and the research results indicate that managers and lawyers share the same view – that contracts are made for business objectives and benefits. However, it was found that the perspectives of managers and lawyers differ with regard to the role of lawyers in preventing and resolving disputes.

Agile development methods were developed to enhance innovations and productivity in software projects, increase customer collaboration and flexibility, and enable dynamic approach to change management. These key principles of agile approach responded to the challenges that project management faced with software projects. The agile methods are increasingly adopted by the public sector which traditionally is not considered as agile but control-oriented and bureaucratic. In this paper, a single case study method is used to explore how the adoption of agile methods is managed in the context of a large governmental agency. This study examines a public software development project utilising agile methods and analyses the form of organising in the agile project using a framework focusing on the universal problems of organising: task division, task allocation, reward distribution and information flows. As a result, the paper presents the case project's solutions to the problems of organising and discusses the differences between agile project setup and the traditional project management approach to manage a project organisation in the public sector context. In the case project, task division was centralised and owned by a project owner, task allocation was done by an autonomous agile team, reward distribution was not used to create additional incentives, and information flows were based on virtual communication tools and occasional meetings.