DSDM is a vendor-independent method that recognises that more projects fail because of people issues than technology. The focus is on helping people to work effectively together to achieve the business goals. DSDM is also tool and technique independent enabling it to be used in any business and technical environment without tying the method users to any particular vendor.

Many system development projects fail to meet the expectations of the end users. Such project failures can be classified into one of five basic types:

1. The system fails to meet the business requirements for which it was developed. The system is either abandoned or expensive adaptive maintenance is undertaken.
2. There are performance shortcomings in the system, which make it inadequate for the users' needs. Again, it is either abandoned or amended incurring extra costs.
3. Errors appear in the developed system causing unexpected problems. Patches have to be applied at extra cost.
4. Users reject the imposition of the system, for political reasons, lack of involvement in its development or lack of commitment to it.
5. Systems are initially accepted but over time become impossible to maintain and so pass into disuse.

DSDM aims to prevent all five types of project failure.

A fundamental assumption of the DSDM approach is that nothing is built perfectly first time, but that 80% of the solution can be produced in 20% of the time that it would take to produce the total solution. A basic problem with less agile approaches is the expectation that potential system users can predict what all their requirements will be at some distant point in time. This problem is compounded by the fact that the mere existence of a new system affects the users' requirements because the methods of working have changed.

In the classical, sequential (or "waterfall") approach, the next step cannot be started until the previous step is completed and fully tested. In practice, a lot of time is spent in getting from the 80% solution to the total solution, with the assumption that no step ever needs to be revisited. This means that considerable time is spent going back to "completed" steps and unravelling the defects from work that has previously been accepted. The result is that projects are delivered late and over budget or they fail to meet the business needs since time is not spent reworking the requirements.

DSDM assumes that all previous steps can be revisited as part of its iterative approach. Therefore, the current step need be completed only enough to move to the next step, since it can be finished in a later iteration. The premise is that the business requirements are likely to change anyway as understanding increases, so any further work would have been wasted!

Systems built using the DSDM approach address the current and imminent needs of the business rather than the traditional approach of attacking all the perceived possibilities. The resulting system is, therefore, expected to be a better fit to the true business needs, be easier to test and be more likely to be accepted into the users' working practices. Since the development cost of most applications is only a small part of the total lifecycle costs, it makes sense to build simpler systems that are fit for purpose and easier to maintain and modify after their initial development. The latter is possible since maintenance can be treated as a further incremental delivery towards the total solution.

DSDM is not only about developing new systems. Enhancements to existing systems can be created using DSDM.