Agile project cannot overrun the budget

Some recent trade rags published stories about Agile-run projects and how they overran their budgets. This seems wrong, based on what I know about Agile methods.

First, a little history. Before "agile" projects, the dominant project method was "waterfall". Waterfall is a method for running a project. All projects need a number of tasks: analysis, design, development, and testing. The waterfall process puts these in strict sequence, with each occurring before the next phase. Thus, all analysis is performed, then all design, and then all development.

The beauty of waterfall is the schedule. The waterfall method promises a specific deliverable with a specific level of quality on a specific date.

The horror or waterfall is that it rarely delivers on schedule. It is quite common for waterfall projects to overrun their schedule. (Their cost estimates, too.)

Agile is not waterfall. The agile method takes a different approach and makes a different promise. It does not promise a specific deliverable on a specific date. Instead, it makes a promise of deliverability.

An agile project consists of a number of iterations. (Some people call these iterations "sprints". I'm not too attached to either name.) Each iteration adds a small set of features. Each iteration also uses automated tests to ensure that previous features still work. The project starts with a small set of initial features and adds features on each iteration. But the important idea is that the end of each iteration is a working product. It may not have everything you want, but everything that it has does work.

The promise of agile is that you can always deliver your product.

With the agile process, one cannot overrun a budget. (You can always stop when you want.) You can, instead, underdeliver. You may get to the end of your allotted time. You may use all of your allotted funds. But you always have something to deliver. If you run over your budget or schedule, it's because you chose to spend more time or money.