1. The document discusses agile fixed-price contracts for software projects, noting they can succeed but require knowing some "simple tricks." 2. Key factors for success include establishing rules, building trust, embracing change, and defining communication and contract elements up front. 3. Contracts should emphasize vision, initial scope, roles and processes rather than rigid requirements, and allow for scope negotiation between deliverables. Establishing governance through a steering committee also helps.

1. Trifork GOTO Night
Agile fix price contracts in software
projects
12. December 2013 / erwin.saegesser@nis.ch

2. Trifork GOTO Night
„I don’t like the term agile fix price
contracts“
12. December 2013 / erwin.saegesser@nis.ch

3. Trifork GOTO Night
„Agile fix price contracts Sometimes it’s better to withdraw
from an opportunity“
12. December 2013 / erwin.saegesser@nis.ch

4. Trifork GOTO Night
„Agile fix price projects require a
variable scope“
12. December 2013 / erwin.saegesser@nis.ch

5. ... would you?

6. ... it leads to believe

7. Better is ...
“… can be made a success, but you
need to know the [rather simple]
tricks of the trade“

8. Not another miracle

9. Not another miracle
Discipline.
Transparency.
Honesty.
Trust.

10. Characteristics of projects

11. Characteristics of projects
New.
Complex.
Deliver a piece of software.
Most probably the increments impact
existing processes.
Have more unknowns than knowns.

12. Why projects fail

13. Why projects fail
Lack of input.
Incomplete specs.
Changes.
Unrealistic expectations.
Source: Standish Group, 2009

14. Why projects fail
Sounds like engagement, communication and
process challenges …

15. Scrum

16. Scrum
Engage with the customer.
Better manage the unknown.
Be transparent [do you want that?] and hence
manage expectations.
Embrace change.
Discover challenges - or better impediments - early
in the project.

17. But why do Scrum projects fail?

18. 1
A misperception and mostly
a complete lack of rules

19. With it goes …
… lack of discipline
… lack of communication
… lack of experience

20. Complete lose of control
Complete lose of
2
TRUST
Causes a fall back into old patterns
[when it is too late]

21. What can we do to ease
the pain?

22. 3
Write down all missing
pieces in a contract
[guiding principles]

23. Typical project: Fix price contract using
agile methodology. Appendix … see
agilemanifesto.org bla bla bla

24. Typical project: Fix price contract using
agile methodology. Appendix … see
agilemanifesto.org bla bla bla
Contract: WHAT [you must achieve] in
DETAIL
Project: HOW [the heck are we going to
achieve all this?]

25. Much better
Contract: WHAT HOW [are we going to work
together] and what is our vision and our
INITIAL scope
Project: HOW WHAT [increments do we
need to build in order to achieve the vision]

26. As a non-experienced
contractor
w/o Scrum experience don’t
bid for such a project at all
4

27. With a nonexperienced customer
Start small. Exercise
discipline, communication,
reporting and change
management. Exercise around
user stories and acceptance
criteria [!]. Define what a
valuable and verifiable
increment represents

28. Define the
communication
Fix bi-weekly meetings.
Wednesday’s is a good choice.
Define a ‘‘jour fix’’.
Build a central glossary.
5

29. Contract ingredients
Agile contracts do not differ
from ‚normal’ contracts but
they emphasize on other
aspects
6

30. Instead of requirements and specs: vision
statements and initial scope through a story
map [!]
For estimation [we] use magic estimate.
Cone of uncertainty: Magic estimate for average and
worst case estimate.
Visualize risks on story map [technical and business risk].

32. Describe roles, artifacts and processes
[rules].
Clarify and exercise them [during a Sprint
Zero project].

33. Product Owner needs to be in the driver seat.

34. One Project [Product] – many customers
Customer
Customers
Stakeholder [A]
Stakeholder B [us]
50%
50%
Product Owner
Engineering

35. Clarify responsibility about the
implementation: Shall we discuss the HOW?

36. It’s inevitable and very important to have a
steering committee.
Setup a two level controlling with project team and
steering committee.
The steering committee agrees upon agile artifacts.

37. Operational level
Daily updates in Jira.
Biweekly sprint demo/planning minutes through
Confluence.
Story map shall be updated after each sprint.
On a more strategic level we report every
three months.

38. Steering committee: There is only one Preso
Work done since last review.
Results.
Addressed risks and status of risks.
Status with respect to consensus.
Current scope in points [story map].
Scope change.
Cost and remaining budget [cost per point].
Assessment of the situation and recommended next steps.

40. Clarify Intellectual Property [IP] rights.
If
‘‘money for nothing’’ approaches don’t fit you may want
to use the IP for a product.

41. Describe project duration
Ordinary termination.
Early termination.
Contract extension.
and scope of delivery
Targeted delivery: Solution ‘x’ consisting of artifacts from 1-n sprints.
Minimum: All realized sprints to include source code.
Documentation of the requirements in the form of a backlog.

42. Financial aspects.
Billing - We are consistently invoicing on a
monthly basis [two sprints]. It keeps
everybody engaged ;-)

43. What can a
contractor do?
First and foremost ... do your homework!
Be agile yourself
7

44. EBM
EBL
IBW
EWZ EN Uster
NIS AG
EKZ
Founded 1996
CKW
30 employees
BKW
Software and
Swisscom
Serviceprovider for
Utilities
2 Dev Teams
AEK
AEN
AEW
EUG
SAK
EWS
EWA
AKONIS
EW Flims
Energie Thun
SES
SES
EWZ-GR

45. EBM
EBL
AEK
AEN
IBW
EWZ EN Uster
EKZ
AEW
SAK
EUG
CKW
BKW
EWS
EWA
Swisscom
AKONIS
EW Flims
Energie Thun
EWZ-GR
SES
SES

46. Operational excellence
Through a Continuous Inprovement Process [CIP].
Through external audits.
Through external consulting.
Our performance index: Velocity [points]

47. A Continuous Integration [CI] framework

48. 8
A structured allocation of
resources and a process for
pro-actively eliminating
impediments

49. Planning
Resource
allocation
Sprint
Retrospective
Demo
Impediments
Knowledgemanagement (every month)
Backlog refinement
Other
Wednesday
Wednesday
Wednesday

50. 1
Rules
5
Communication
2
3
Trust
Change behavior
6
7
Contract
Homework
4
Build trust
8
Impediments

51. Review your contracts and projects
Exercise based on an completed project
Measure your own scrum maturity level
[NOKIA test]
What’s
next

52. Trifork GOTO Night
Agile fix price contracts can be a
success - we all simply need to ‘do
our homework’ ;-)
12. December 2013 / erwin.saegesser@nis.ch

53. aber uns
out me
erwin.saegesser@nis.ch
certified scrum professional
nis ag - Schweiz

54. Credits and Pictures
agilemanifesto.org
scrum.com
agileproductdesign.com
scrum.jeffsutherland.com
www.wickie-film.de
nasaimages.org
flickr.com
library of congress
erikjohanssonphoto.com
google.com