Agile Contracts talk given in AgilePrague 2012, September 3rd

1. Agile
Contracts?
AgilePrague 2012
Johannes Brodwall, Principal Architect
Steria Norway
@jhannes

2. Part I

3. Motivation

4. Agile Manifesto
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan

5. Agile Manifesto
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan

6. Does «contract» make a
difference?

7. Hold on, I expected
a much fancier UI
for this.
?
Customer
Supplier

8. Most common contracts:
Fixed price
Time and material

9. Hold on, I expected
a much fancier UI
for this.
Crap
Customer
Supplier

10. Hold on, I expected
a much fancier UI
for this.
No problem, we’ll
work some more
Customer
Supplier

11. «Time and material»
creates the most happiness

12. «Time and material»
creates the most happiness
(Source: My best and worst projects)

13. «Time and material»
creates the most happiness
(Also for customer!)

14. So why care about the
rest?

15. Do you pay taxes?

16. How should your
government handle:
• We’re running out of money for pensions
• We need to change the rules!
• The current system is huge

17. How should govt spend
your money?
• A big, state-run project?
• Hire a random company to do it all?
• Just pay consultants until it’s done?
• “Just be agile”?

18. Can Agile help?

19. Customer collaboration
over contract negotiation:
• Contracts hurt
• Big tax-funded projects are inevitable
• Agile can help – but insufficient

20. Part II

21. PS2000 + Agile

22. Typical Norwegian public
sector project:
«We need to replace huge system X…

23. Typical Norwegian public
sector project:
«We need to replace huge system X…
… we’d like to use Scrum»

24. PS2000:
«Target price»

25. (Target price:
Set a budget,
report cost.
Supplier & client splits difference)

26. PS2000 + agile:
«Colocated»
«Sprints»
«Sprint reviews»
«Product owner»
«Product backlog»

27. … but also
«Negotation phase»
«Requirement phase»
«Acceptance test phase»

28. Whence PS2000?

29. Contract standard from
Norwegian Computing
Association

30. 2001: PS2000 with target
price

31. 2009: PS2000 + Agile

32. Norwegian trends:
• Active community
• Meetups about contracts
• Scrum certifications
• Large and diverse consultancy industry

33. Some project
highlights

34. LARM:
Domain: Electricity reserve power
Application: Operator UI
Internal Integration
Project size: 2 scrum teams plus support
Organization: Supplier + Customer teams
Colocated at customer site
Team size: 7 per team
Duration: 3 years (1,5 years left)
Sprint length: 3 weeks (customer present)
Releases: 3 times per year
Contract: Target pricing for whole scope

35. Mar,
2010
Apr,
? 2010
Bid Aug,
2010
Negotiation SIGNED Nov,
2010
Elaboration Sprint
May, Sept,
2011 2011
Release 1
Sprint Sprint Sprint Sprint Sprint Sprint Sprint Acceptance Production
Elabor
Sprint Sprint Sprint
ation

36. Smart move:
Reliable product backlog using
scenarios

37. Big win:
First release in use 1 year after
contract, containing most used
screen

38. Big loss:
Feature creep of individual user
stories

39. PERFORM:
Domain: State pension fund
Application: Case worker UI
External Integration
Process flow
Project size: 12-14 scrum teams plus support
Organization: Three suppliers with 3-6 teams
Colocated at customer site
Team size: 10 per team
Duration: 3 years
Releases: 3 times per year
Sprint length: 3 weeks, with shared demo
Contract: First release: Time & materials
Subsequent:
Target pricing per release

40. Smart move:
Contract on price per release
First release on T&M
«Competing» suppliers

41. Big win:
Delievered what was needed
Government is happy
Users are happy

42. Big loss:
Full time requirement spec
Hostile architecture team

43. Customer collaboration
over contract negotiation

44. Reality:
• We must compete
• We must commit

45. Part III

46. Wishful contracts

47. The source of our
troubles

48. 2 year - development Use
Fabulation
Speculation
Bungling
Yelling
Worrying

49. 2 years - development Use
Fabulation
Contract
Price Ok? Deliverable
ScopeSpeculation
Bungling
Yelling
Worrying

50. The problem

51. 2 years - development Use
Fabulation
Contract
Price
ScopeSpeculation
Bungling
Yelling
Worrying

52. A way out?

53. IMAGINE:
Project size: Some scrum teams with independent
users and product owners
Organization: Colocated at customer site
Team size: 6-8 per team
Duration: 3 years
Sprint length: 2 weeks, with shared demo
Releases: Every month
Bidding: Performance competition
Contract: Target estimate per user story

54. Pricing: Unit pricing

55. Menu:
• Simple GUI: 20 kNOK
• Complex GUI: 50 kNOK
• GUI that customer decides
how looks: 100 kNOK
(Or 2, 5, 20 story points)

56. I need a screen
shot for X. We want
something simple.
Ok. 2
kEURO
Customer
Supplier

57. We’ve
spent half
the budget
Do you have
anything to
show for it?
Customer Nothing that
is tested yet
Supplier
Okay, I’m
pulling the
plug

58. We’ve
spent the
budget
Stop!
Customer
Supplier

59. But I wanted rounded
corners, and gradients!
No problem, but
Customer that means it’s
no longer
«simple»
Supplier
Oh, never mind.

60. (I hate having this sort
of discussions)

61. But I wanted …!
Oh, I guess we
have to do it, then
Customer No way! Change
order!
Hmm…we didn’t
Supplier
consider that when
we gave the price

62. Bidding: Competitive
delivery

63. Project reference
Resumes
Hourly rates
Supplier
Supplier
Customer
Supplier
Supplier
Supplier Pre-
qualification
Supplier

64. Supplier
Supplier
Supplier

65. 6-10 weeks
Supplier
Supplier
Supplier

66. Analysis
Coding
Supplier
Analysis Analysis
Coding
Coding
Supplier
Analysis
Coding
Supplier

67. Analysis
Coding
Supplier
Analysis Analysis
Coding
Coding
Supplier
Analysis
Coding
Supplier

68. Another model

69. IMAGINE:
Supplier Commitment:
Δ☺
Δ$

70. Questions and
discussions

71. Conclusion

72. Customer collaboration
over contract negotiation

73. We need an answer for
large investments

74. Norway’s answer ain’t
half bad

75. Norway’s answer ain’t
half bad

76. But

77. We can do better

78. Thank you
johannes@brodwall.com
http://johannesbrodwall.com
http://twitter.com/jhannes