Agile can be cheap; Waterfall is expensive

Agile can be cheap, but Waterfall will always be expensive.

Here's why:

Waterfall starts its process with an estimate. The Waterfall method uses a set of phases (analysis, design, coding, testing, and deployment) which are executed according to a fixed schedule. Many Waterfall projects assign specific times to each phase. Waterfall needs this planning because it makes a promise: deliver a set of features on a specific date.

But notice that Waterfall begins with an estimate: the features that can be implemented in a specific time frame. That estimate is crucial to the success of the project. What is necessary to obtain that estimate?

Only people with knowledge and experience can provide a meaningful estimate. (One could, foolishly, ask an inexperienced person for the estimate, but that estimate has no value.)

What knowledge does that experienced person need? Here are some ideas:

- The existing code
- The programming language and tools used
- The different teams involved in development and testing
- The procedures and techniques used to coordinate efforts
- The terms and concepts used by the business

With knowledge of these, a person can provide a reasonable estimate for the effort.

These areas of knowledge do not come easily. They can be learned only by working on the project and in different capacities.

In other words, the estimate must be provided by a senior member of the team.

In other words, the team must have at least one senior member.

Waterfall relies on team members having knowledge about the business, the code, and the development processes.

Agile, in contrast, does not rely on that experience. Agile is designed to allow inexperienced people work on the project.

Thus, Agile projects can get by without senior, experienced team members, but Waterfall projects must have at least one (and probably more) senior team members. Since senior personnel are more expensive than junior, and Waterfall requires senior personnel, we can see that Waterfall projects will, on average, cost more than Agile projects. (At least in terms of per-person costs.)

Do not take this to mean that you should run all projects with Agile methods. Waterfall may be more expensive, but it provides different value. It promises a specific set of functionality on a specific date, a promise that Agile does not make. If you need the promises of Waterfall, it may be worth the extra cost (higher wages). This is a business decision, similar to using proprietary tools over open-source tools, or leasing premium office space in the suburbs over discount office space in a not-so-nice part of town.

Which method you choose is up to you. But be aware that they are not the same, not only in terms of deliverables but in staffing requirements. Keep those differences in mind when you make your decision.