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Why agile contracts make financial sense

Why agile contracts make financial sense

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  • 1. Agile ROI Or, why agile contracts make financial sense Cristiano Sadun Manager TietoEnator Corporation [email_address]
  • 2. Agile principles in focus
    • Prioritize features on business value
    • Prioritize often
    • Put in production often, and as early as you can
  • 3. Example - 5-features delivery
  • 4. 1- One-go full delivery
    • All features-pre specified and estimated
    • Delivery in July
    • Cost-first cash flow
    • Breakeven in Sept. (9 months)
  • 5. 2- Per-feature delivery
    • All features pre-specified and estimated
    • Deliveries from March to July
    • Smoother cash flow
    • Breakeven in August (8 months)
  • 6. 3- Prioritized per-feature delivery
    • Features prioritized and released in order of priority
    • Deliveries from March to July
    • Very flat cash flow
    • Breakeven already in February!
  • 7. Calculations
    • Easy to replicate by yourself!
  • 8. Agile ROI
    • Agile contracts:
      • Huge benefits can be reaped by prioritizing and delivering early
      • “ Cut-away” of less valuable feature becomes the norm
      • Prioritization and value-evaluation are built-in
      • Stop clauses allow for agreed ramp-down once valuable features are realized
  • 9. Agile ROI – why Tieto
    • Execution is essential: project and delivery management skills
    • Continuous open communication with Customers is a Tieto hallmark
    • “ Real world pitfalls vs. the example
    • First-time guidance
    • We’ve done it before:
      • Salsa – Portal project at NetCom, major telecom operator in Norway (2008)