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Business value of Agile : A People10 Showcase
People10 Technosoft Private Limited
Nov 24, 2011
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Transcript of "Business value of Agile : A People10 Showcase"
1. © People10 1Business Value of Agile Agile introduction
© People10 2UnderstandingAgile
Contents3 The AGILE Manifesto and Principles History and evolution Industry coverage and presence © People10
The AGILE Manifesto and 12 Principles4We are uncovering better ways of developing software by doing it and Build projects around motivated individuals. Givehelping others do it. Through this work we have come to value:Individuals and interactions over processes and tools 05 them the environment and support they need, and trust them to get the job doneWorking software over comprehensive documentation Customer collaboration over contract negotiation The most efficient and effective method of conveyingResponding to change over following a plan 06 information to and within a development team is face-to-face conversationThat is, while there is value in the items on the right, we value theitems on the left more. 07 Working software is the primary measure of progress Kent Beck James Grenning Robert C. Martin Mike Beedle Jim Highsmith Agile processes promote sustainable development. Arie van Bennekum Alistair Cockburn Andrew Hunt Ron Jeffries Steve Mellor Ken Schwaber Jeff Sutherland 08 The sponsors, developers, and users should be able to maintain a constant pace indefinitely Ward Cunningham Jon Kern Dave Thomas Martin Fowler Brian Marick 09 Continuous attention to technical excellence and good design enhances agility01 Our highest priority is to satisfy the customer through early and continuous delivery of valuable software Simplicity “the art of maximizing the amount of work Welcome changing requirements, even late in 10 not done” is essential02 development. Agile processes harness change for the customers competitive advantage Deliver working software frequently, from a couple of 11 The best architectures, requirements, and designs emerge from self-organizing teams03 weeks to a couple of months, with a preference to the shorter timescale At regular intervals, the team reflects on how to 12 become more effective, then tunes and adjusts its behavior accordingly04 Business people and developers must work together daily throughout the project Source : http://agilemanifesto.org/ © People10
History and evolution5 Year Method Founder Firm Features Use Cases, Domain Models, Frequent Delivery,1991 Crystal Methods Cockburn IBM Reflection Workshops, Risk Management Backlogs (Feature Lists), Daily Scrums, Sprints1993 Scrum Sutherland Easel (Iterations), Retrospectives (Post Mortems) Dynamic User Involvement, Time Boxes and Prototypes1993 Systems Millington DSDM (Iterations), Testing and Quality Assurance Development Feature-Driven Feature Lists (Customer Needs), Domain Model1997 Development De Luca Nebulon (Object Orientation), Inspection (Peer Review) Extreme Release Planning, Onsite Customers, Iterations, Pair1998 Programming Beck Chrysler Programming, Test-Driven Development P10 follows a hybrid of Scrum and Extreme Programming Source : The Business Value of Agile Software Methods by Dr. F Rico, Dr. H Sayani, Dr. S Sone © People10
Coverage and presence of Agile6 “A Forrester report on Northrop Grumman Corp Manpower agile indicate that agile DHL Express Acxiom Corp. development processes Delphi Corp. are already in use in FedEx Corp. DaimlerChrysler Fannie Mae 14% of North American Merrill Lynch & Co. and European General Motors Corp. Flextronics International enterprises, and Verizon Wireless 7-Eleven another 19% of Harvard Business School enterprises are either interested in adopting Hewlett-Packard Corp. Dell Lincoln National Corp. agile or already planning to do so” Source : cio.com (most honored agile companies) © People10 Forrester Research Report : “Corporate IT leads the second wave of IT adoption” by Carey Schwaber and Richard Fichera
© People10 7Benefits of Agile
Contents8 Current business context and Agile Comparing Traditional vs. Agile methods Measuring Agile value Industry surveys, cost advantage and benefits Business value of Agile Other intangible benefits © People10
Agile for current business context9business environment human behavior our business is constantly changing, so we misunderstand our needs evolve continuously requirements and only discover the new ideas emerges constantly, not just at misunderstanding after we the beginning have started building opportunities and threats appear when we see working unexpectedly, software, we also see we must respond quickly improvements Software building process Agile what we build doesn’t always work as well as we expect, so changes methodology must be made delivers best in today’s impatient world ! © People10
The traditional method10 high risk for customer Long requirement gathering phase low confidence on Tight contracts; rigidity in change outcome Possibility of significant re-work during testing Tunnel effect (low product visibility) between requirement and delivery Large volume of documentation “tunnel effect” Project life cycle Requirement Design Build Testing Deployment Product life cycle © People10
The Agile “value”11 low risk for customer high confidence Short iterative cycles; features prioritized with client on outcome Regular product demos; welcoming feedbacks High focus on software quality and maintainability Flexible to change Project life cycle 1 2 3 n Product life cycle © People10
How do we measure value? Metrics for Agile Value Measurement Metric Definition Agile context Formula Total amount of money Total development cost (includes nCosts spent (Life Cycle Cost) training, coaching, automated tools) ΣCostiSum of Costs i=1 Total amount of money Economic benefit from new systemBenefits nSum of Benefits gained (includes maintenance, rework ΣBenefiti savings) i=1 Ratio of benefits to Includes development, BenefitsB/CR costs maintenance and businessBenefit to Cost Ratio CostROI Ratio of adjusted Benefits – Costs benefits to costsReturn on Investment Cost n Discounted cash flows Time value considered. PreferredNPV for Agile ΣCosti Benefitsi .- Costs 0 (1+Discount Rate) YearsNet Present Value i=1 Point when benefits New Costs .BEP exceed costsBreakeven Point Old Costs / New Costs − 1 Value gained from Considers „risk factor‟ and N(d1 ) × Benefits − N(d2 ) × Costs XROA strategic delay reduction in possible loss due toReal Options Analysis delays in investment e−Rate × Years d1 = [ln(Benefits ÷ Costs) + (Rate + 0.5 × Risk2) × Years] ÷ Risk × √ Years d2 = d1 − Risk × √ Years Source : The Business Value of Agile Software Methods by Dr. F Rico, Dr. H Sayani, Dr. S Sone © People10
Industry survey outcomes on Agile13 67% more Data from 5183 respondents worldwide suggests consensus on productivity, 65% more Quality and 49% better on cost compared with traditional methods. Survey also suggests Number of world-wide developers using agile is rising Agile is not just confined to small organizations; size of organizations using agile is getting larger Productivity Quality Cost Year Organization Author # Respondents increase increase reduction 2003 Shine Johnson 131 93% 88% 49% 2006 Agile Journal Barnett 400 45% 43% 23% 2007 Microsoft Begel et al. 492 14% 32% 16% 2007 UMUC Reco et al. 250 81% 80% 75% 2008 AmbySoft Ambier 642 82% 72% 72% 2008 IT Agile Wolf, et al. 207 78% 74% 72% 2008 Version One Hanscom 3061 74% 68% 38% Average 67% 65% 49% Source : The Business Value of Agile Software Methods by Dr. F Rico, Dr. H Sayani, Dr. S Sone Page 89 © People10
Cost advantage and economic benefits measured through Productivity and Quality14development cost through Productivity maintenance cost through Quality(lines of code / hour) (defect density)26 studies with 726 programmers show average productivity of 21 21 studies with 323 programmers give average defect density ofLOC / hour 1.79 defects / KLOC 10 to 20 times higher 19 times higher Agile proves to be highly productive (fast and efficient) and of higher quality than traditional 10 Measures Traditional Agile92 8 21.24 LOC / hour (7.931169 Productivity .85 LOC / hour adjusted) 646 Defect density 33.33 defects / KLOC 1.797 defects / KLOC 4 Development 5,087.89 hrs ($508,789 ) / 471 hrs ($47,087) / KLOC23 cost KLOC 2 0 0 Total Life 18,751 hrs ($4,509,997) / 2268 hrs ($217,712) / KLOC 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 cycle cost KLOC Productivity (LOC / hour) Quality( Defects / KLOC) Tangible benefits (Traditional – Agile) $4,292,285 / KLOCAgile increases economic benefitsincrease revenue through collaboration, interaction, listening to customers, capturing their needs as flexible stories,implement the stories with highest business value firstreduce development and maintenance cost through increased productivity (reduce development cost)andimproved quality (reducing maintenance cost ) thereby decreasing total cost of ownership Source : Benediktsson, O., & Dalcher, D. (2005). © People10 Estimating size in incremental software development projects. Journal of Engineering Manufacture, 152(6), 253-259.
Business value of Agile Result of studies15 79 studies with quantitative data proves average ROI of 2633% ($26 return for $1 invested) for Agile Category Low% Median% High% Development Cost 10 26 70 ROI due to high productivity and Schedule 11 71 700 high quality; Productivity 14 122 712 reduction in cost of software Quality 10 75 1000 maintenance (brings down cost of Satisfaction 70 70 70 ownership) ROI 240 2633 8852 Summary : Result of Business Value in Agile Vs Traditional context Total Cost Benefits B/CR ROI% NPV BEP ROA ISO 9001 $1,73,000 $5,69,841 3:1 229% $3,20,423 $11,96,206 $5,03,345 CMMI® $11,08,233 $30,23,064 3:1 173% $15,09,424 $5,45,099 $26,33,052 SW-CMM® $3,11,433 $30,23,064 10:1 871% $23,06,224 $1,53,182 $28,28,802 Agile $2,17,712 $42,92,285 20:1 1,872% $34,98,958 $11,043 $41,25,209 Methods Source : The Business Value of Agile Software Methods by Dr. F Rico, Dr. H Sayani, Dr. S Sone © People10
Business value of Agile Agile vs. Traditional comparison16 Cost Benefits (Million $ / KLOC) Cost Benefit Ratio ROI (Million $ / KLOC) 5 2100% Millions 25 1800% 4 20 1500% 3 1200% 15 2 900% 10 600% 1 5 300% 0 0 0% Cost Benefits Cost / Benefit Ratio ROI Agile CMMI® SW-CMM® ISO 9001 Agile CMMI® SW-CMM® ISO 9001 Agile CMMI® SW-CMM® ISO 9001 NPV BEP ROA 4 1.5 5 Millions Millions Millions 1.2 4 3 0.9 3 2 0.6 2 1 0.3 1 0 0 0 NPV Break Even Point Real Options Analysis Agile CMMI® SW-CMM® ISO 9001 Agile CMMI® SW-CMM® ISO 9001 Agile CMMI® SW-CMM® ISO 9001 © People10 Source : The Business Value of Agile Software Methods by Dr. F Rico, Dr. H Sayani, Dr. S Sone
Intangible benefits17 visibility business value adaptability reduced risk high degree of customer & developer interaction gives features prioritized directly adaptability to changing frequent visibility and maximum visibility by customers and market/customer needs feedback mechanism delivered in iterations give ensures reduced risk better time-to-market and business value improved teamwork product communication high customer sustainability highly skilled satisfaction professionals transparency quality customer collaboration maintainability better co-operation strong relationships automated testing problem solving more trust lightweight processes and traditional development documentation agile development Source : VersionOne LLC © People10
© People10 18Agile Approach
Contents19 Agile iterative workflow Agile delivery life cycle – process and deliverables Tools and techniques © People10
Agile; the iterative workflow20 Daily scrum project team Demo of features completed to the Product backlog product owner/end prioritized with product owner users Iteration Plan Feedback on project team deliverables Priority of Release Plan remaining features Project Manager Release deployed to end users © People10
A typical Agile delivery life cycle processes and deliverables21 release scope, release signed milestones planning, deliverable contract detailed specs & schedule structure, RACI iteration goal, task allocation, prioritized backlog retrospective actions implemented time, scope, cost, quality indicators operational meetings scrum, TDD, completedrequirements tasks, performance info. signed– action items, actor, action date off specs , validated weekly status reports prioritized published dashboard specification features accepted project review meetings, Steerco features, completed features changes (RTF), demo, retrospective agreed KPI & metrics information re-allocate archive team, project plan (comm., training, travel, risk, fixes, schedule…) acceptance sign-off documentation, HLD, high level user training signed-off sizing & estimation project © People10
Tools and techniques22 white board daily scrum Product backlog burn down Iteration Plan charts project team software factory Release Plan sanity checks Project Manager retrospective end of iteration demo © People10
© People10 23P10 Advantage
Contents24 Our Agile capabilities Agile myths resolved through P10 facts P10 radical team management © People10
Our Agile capabilities P10 time tested and proven track record25 management capabilities Agile transformation capabilities certified scrum masters (industry certified) transformed 1400+ IT professionals from traditional to Agile directly managed Agile teams of 1000+ size built and implemented in-house customized Agile tools and methods developed in-house training and certifications for delivery capabilities Agile transformations evangelized sizing and estimation techniques for successfully delivered 200+ IT projects with 100% Agile agile teams using modern technologies (java, .net, Oracle..), legacy technologies (COBOL, ProC, business complexity PHP, Sybase…) and complex products in Business Intelligence space (Business Objects, Informatica, Terradata..) delivered 25% of global IT projects for leading Investment Bank covering front, middle and back recruited, trained and managed 200+ technical office, Risk and Accounting systems in distributed leader and solution architects who have designed Agile model with 100% Agile teams and developed highly complex, scalable IT systems across businesses recruited and managed 150+ business Analysts who are experts in collaborative requirements gathering techniques to provide most robust solutions for evolving business needs mindset and behavior we are Agile in our thinking and approach, every day, in and out of work ! © People10
Agile myths resolved through P10 facts26 P10 uses an Agile model which is a hybrid of Scrum and XP. We ensure the following disciplines and rituals as part of Agile practice: test driven development “Agile development is daily stand-up meetings not disciplined” continuous integration of code to ensure working software iteration planning day story point and task level estimations weekly sanity checks end-user demo… At the beginning of the project, P10 provides you high level planning and estimation including delivery milestones “Agile teams do not Throughout the project, P10 refines incremental plan (Release Plan, Iteration plan” plan) and share with you This „progressive elaboration‟ eliminates re-planning wastage throughout the project and provides realistic view of project timeline and cost At P10, we deliver features to you in every iteration. Valuable historic data quickly emerges from iterations. The quality of our plans improve as speculation is replaced with historic results and facts. “Agile development is not predictable” Based on the progress of our product(not just process), we are able to predict the outcome with greater accuracy throughout the project. Our predictability is a result of constant planning, estimating, prioritizing and delivering against the plan © People10
Agile myths resolved through P10 facts27 Smaller teams have been proven time and time again to be much more productive than large teams “Agile development At P10, we take very large projects and break them down into a coordinated does not scale” series of smaller projects. We have teams staffed by smaller, cross- functional experts and completely autonomous to deliver highest level of quality and scale A recent Forrester report on agile indicate : “Agile development processes are already in use in 14% of North American and European enterprises, and another 19% of enterprises are either interested in adopting agile or already planning to do so.” Many of today‟s adopters are large divisions and software organizations of “Agile development is enterprise IT. The top three reasons noted for transitioning to agile development include just another fad / accelerating delivery hype” aligning business and market needs with IT improving visibility into s/w development process As founders of P10, our track record of 100s of successful deliveries prove several folds of productivity, quality, business value, employee satisfaction and customer satisfaction Agile has been around for a while; It is here to stay ! © People10
Agile myths resolved through P10 facts28 P10 delivers to you all necessary project management documentation like Project Plan, communications plan, estimation and costing sheets, resource plan, project governance documents, Risk and Issues register, weekly status “Agile means you reports, quantitative monthly delivery dashboards never have to write P10 ensures requirement specifications, design documents, test plans, defect documentation” reports throughout the project life cycle. The documents are done at the right time to ensure less editing and revisions P10 normally follows 3 week iterations(sprint). For every sprint, P10 business “Agile means I can analysts work with the client representatives and ensure visibility to the team change my mind Within the sprints in Agile development, change needs to be on hold or very whenever I want to” minimal. At the end of 3 weeks and the demo, the required changes are incorporated into next sprint At P10, we have expertise to deliver very large projects in Agile mode. We achieve this by keeping agile teams small and link together these teams to handle size “Agile works only for small projects” This phenomenon is achieved through a technique called „scrum of scrums‟ As per the industry, a large project had as many as 27 teams successfully linked together © People10
Agile myths resolved through P10 facts29 At P10, we exercise „radical management‟ principles to manage our highly competent agile teams “Agile means teams cannot be controlled We believe in control through planning, monitoring, and adapting. Management is about getting more done by removing obstacles. There is a by management” different style of management (ref. „P10 Radical Management‟ for details) At P10, our architecture needs to come out from working through the “Agile requires problems and should not be just a guiding factor detailed architecture and design” We let architecture emerge and is open to adapt and change throughout the product life cycle to ensure the best scalability and „state of the art‟ solution At P10, we ensure right balance of work and fun. For our highly motivated “Agile teams do not staff, „focus‟ is key work hard, they just However, our Agile developers are more likely to have fun outside work and play foosball” sleep better at night as they work with close collaboration within the team, and with end-clients , so there tends to be less worries about errors © People10
How we manage our teams P10 radical management30 The differences between traditional management and radical management are stark. They flow from different goals, modalities and consequences. They are summarized in the following table: Traditional Management P10 Radical Management The purpose of work is to produce goods or Goal services Focus work on delighting clients How work is Work is done by individuals reporting to bosses Do work through self-organizing teams organized Work is done in accordance with a comprehensive Do work in client-driven iterations aimed at Plan plan continuous innovation As work proceeds, provide progress reports of Measuring progress what is under way Deliver value to clients each iteration What is Be totally open about impediments to Communications cover what people need to know communicated improvement Create a context for continuous self- Improvement Bosses are responsible for productivity improvement by the team itself How it is One-way communication: send people messages, Communicate interactively through stories, communicated and tell them what to do questions, conversations Principal focus of Cost reduction: economies of scale, downsizing, Time: deliver more value to the client sooner competition outsourcing Rates of return on assets steadily decline. Continuous innovation: self-organizing teams Innovation is stunted. Four in five workers are not normally evolve into high-performance teams, Consequence fully engaged in their jobs. Customers receive focused on delighting clients, with above- average products and services average productivity and deep job satisfaction © People10
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