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Agile Contracting - Killing Bureaucracy

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My Agile Contracts speech given at Agile Estonia in February 2014, where I encouraged people to kill bureaucracy and to call doges doges, not cats.

My Agile Contracts speech given at Agile Estonia in February 2014, where I encouraged people to kill bureaucracy and to call doges doges, not cats.

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  • 1. Agile Contracting LL.M. Juha Ilola Agile Saturday X / Agile Estonia 15 Feb 2014 Saturday, February 15, 14
  • 2. legal guy @ Reaktor previously @ major law firm, Sulake doing legal IT stuff since 2001 © Copyright Reaktor 2014 Saturday, February 15, 14
  • 3. Agenda Killing Bureaucracy Waterfall Contracts Agile Contracts © Copyright Reaktor 2014 Saturday, February 15, 14
  • 4. Photo Credit: http://www.flickr.com/photos/x_jamesmorris/ Killing Bureaucracy © Copyright Reaktor 2014 Saturday, February 15, 14
  • 5. people really do hate bureaucracy. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 6. bureaucracy = “excessively complicated administrative procedure”. Source: Oxford Pocket Dictionary via Google © Copyright Reaktor 2014 Saturday, February 15, 14
  • 7. lawyers, procurement, other bureaucrats excessive, unnecessary administrative complexity. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 8. administrative complexity - increased initial transaction costs - increased cost of change - increased non-value-adding work (e.g., unnecessary features, excessive documentation) © Copyright Reaktor 2014 Saturday, February 15, 14
  • 9. bureaucracy = not only waste by itself, but also a catalyst for waste in the system. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 10. to eliminate waste, you need to kill bureaucracy. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 11. unfortunately, laws prevent you from killing bureaucrats like me. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 12. two examples of legal ways to kill bureaucracy © Copyright Reaktor 2014 Saturday, February 15, 14
  • 13. 1 foot-in-the-door approach: start small; immediately deliver exceptional results; kill bureaucracy via internal pressure from the biz guys. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 14. 2 kill-the-silos approach: make bureaucrats understand agile / the way value-adding work is actually done. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 15. from waterfall to agile contract © Copyright Reaktor 2014 Saturday, February 15, 14
  • 16. a zero-sum game approach to collaborative contracts creates non-optimal contracts, bureaucracy and waste. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 17. a collaborative contract should be optimized for successful outcome, not for the (imaginary) interests of one party. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 18. a beautiful contract provides the the simplest possible solution for its purpose. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 19. Waterfall Contracts © Copyright Reaktor 2014 Saturday, February 15, 14
  • 20. waterfall contract = fixed price + fixed scope © Copyright Reaktor 2014 Saturday, February 15, 14
  • 21. “the Supplier will deliver to the Customer the software described in Annex 1 for EUR [price] by [deadline].” © Copyright Reaktor 2014 Saturday, February 15, 14
  • 22. assumptions in the contract dictate what will be done, not the real (discovered) needs. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 23. Fixed price encourages the Supplier to put in minimum effort for the agreed price. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 24. Change Management the Supplier will agree to change only if there is enough money on the table. contract is renegotiated throughout the project (Change Orders). © Copyright Reaktor 2014 Saturday, February 15, 14
  • 25. the contract gives the customer illusion of control, but in fact the Supplier operates as a black box and has no incentives for transparency. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 26. if one of the most common causes for IT failures is budget overflow, is price in “fixed price contracts” really fixed? © Copyright Reaktor 2014 Saturday, February 15, 14
  • 27. Agile Contracts © Copyright Reaktor 2014 Saturday, February 15, 14
  • 28. risks of a software project are best addressed by using agile methods. not with contract. agile contract should make it possible to capitalize on the ability of agile methods to provide the customer with best value for a given budget. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 29. Specified Empiric © Copyright Reaktor 2014 Saturday, February 15, 14
  • 30. Backlog Specified in detail Priority Recognized, required functionalities Fuzzy ideas Release 1 © Copyright Reaktor 2014 Saturday, February 15, 14
  • 31. the object of an agile contract should be the performance of service (as opposed to delivery of specified results). © Copyright Reaktor 2014 Saturday, February 15, 14
  • 32. team members subject to approval of the customer. the customer has the right require the change of a team member at any time, for any reason. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 33. contents of the services (i.e. backlog) are agreed in accordance with the agile method. no separate change management is necessary. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 34. charged on time & material basis on the basis of realized hours / days. set max budget? payment not tied to approval of results. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 35. Reaktor’s satisfaction guarantee: if the customer feels that Reaktor has not performed with satisfactory level, they may notify Reaktor and receive automatic discount - no questions asked. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 36. indefinite term contract with 2 - 4 weeks’ notice period. customer’s exit made possible by assignment of all rights or unlimited license to results. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 37. doge is doge even if you call it cat. Regardless of what you call it, it is not agile if you do it with waterfall contract. © Copyright Reaktor 2014 Saturday, February 15, 14
  • 38. Thanks! © Copyright Reaktor 2014 Saturday, February 15, 14