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How much will this cost?

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"How much will this cost?"
"How long will it take?"
"What am I going to get?"

These are the questions that every Agile project gets asked at some point. And while "as much as your willing to spend", "as long as necessary" and "whatever you ask for" are perfectly acceptable, many customers are uncomfortable with these answers. This may reflect more on the customer then the team, but can lead to the misconception that the development team is writing themselves a blank cheque. How then does an Agile team define and scope a project where the customer requires fixed time, cost or scope?

This presentation will provide guidance and direction on how to quote for and budget Agile projects, as well as how to change the questions in the first place.

This is intended to be a practical discussion on how organisations can plan agile projects while constrained in a non-agile environment. There are four parts to the presentation (roughly a quarter of the presentation will be spent on each).
1. A look at constraints in general (starting with time, cost and scope), and the potential impact on a project.
2. How to structure a project proposal when the customer expects it to be constrained (e.g. fixed price or fixed time)
3. How to adjust your project (in an agile manner) when it looks like you will break a constraint.
4. Finally, we will look at ways of changing your customer - moving them away from a constrained mindset towards an agile mindset

Published in: Business
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How much will this cost?

  1. 1. HOW MUCHWILLTHIS COST?Evan Leybourn
  2. 2. Evan Leybourn lean / agile business leader and author Singapore @eleybourn http://theagiledirector.com CLICK TO DISCOVER MORE
  3. 3. “There are so many men who can figure costs, and so few who can measure value.” - Anonymous
  4. 4. “how much is this going to cost?”
  5. 5. “how long is this going to take?”
  6. 6. “what am I going to get?”
  7. 7. predictability the fundamental flaw in software contracts
  8. 8. customer collaboration over contract negotiationwhile there is value in the items on the right ...
  9. 9. understand your workflow A Z option 1: increase capacity option 3: drop requirement option 3: increase duration
  10. 10. customer trust partnership identification contract reference
  11. 11. time and materials most “agile” contract model, but linear growth
  12. 12. outcome-based contracts “power by the hour”
  13. 13. scope
  14. 14. scope fixed cost a fixed price quote prior to any work commencing
  15. 15. scope an example provide operational support and maintenance services
  16. 16. scope quoting identify, and estimate, the approximate user stories in iteration 0
  17. 17. scope delivering reduce effort on technical debt and use short (1-2 week) iterations
  18. 18. scope measuring velocity and burn rate are your key indicators of cost
  19. 19. scope fixed time delivery is expected by a specific date
  20. 20. scope an example design and print new marketing material for a product launch
  21. 21. scope estimating use historical velocity data to estimate the expected duration
  22. 22. scope delivering strictly enforce timeboxes
  23. 23. scope measuring tracking team and project velocity and/or cycle time
  24. 24. fixed scopefixed scope a fixed set of requirements – sometimes know and heavy agile
  25. 25. fixed scopean example deliver financial reports prior to the end of the financial year
  26. 26. fixed scopeplanning focus on backlog definition and estimation during iteration 0
  27. 27. fixed scopedelivering work in predefined, and agreed, backlog order
  28. 28. fixed scopemeasuring acceptance of user stories
  29. 29. fixed scopefixed cost & scopea fixed price quote for a pre-defined set of requirements
  30. 30. fixed scopean example build and deliver a product to architectural specifications
  31. 31. fixed scopequoting & planning during planning, increase contingency (% or $) for the unexpected
  32. 32. fixed scopedelivering adjust delivery date in addition to fixed cost and fixed scope
  33. 33. fixed scopemeasuring as per fixed cost and fixed scope
  34. 34. fixed scopefixed time & scope a fixed set of requirements with final delivery due by an agreed date
  35. 35. fixed scopean example recruitment of staff prior to a new project commencing
  36. 36. fixed scopeplanning & estimating pre-assign stories into iterations and allocate time to technical debt
  37. 37. fixed scopedelivering if required, increase the team size prior to completion
  38. 38. fixed scopemeasuring as per fixed time and fixed scope
  39. 39. scope fixed time & cost a fixed price quote with an agreed delivery date – known as capped t&m
  40. 40. scope an example work on an agreed product until the end of the financial year
  41. 41. scope quoting & estimatingcalculate total cost as cost per cost per iteration
  42. 42. scope delivering update backlog as required in addition to fixed time and fixed cost
  43. 43. scope measuring as per fixed time and fixed cost
  44. 44. fixed scopefixed time, cost & scopeno flexibility in the project budget, schedule, or requirements
  45. 45. fixed scope cancel the project
  46. 46. fixed scope but...If you start with t&m...
  47. 47. release the lawyers managing exposure and risk
  48. 48. “What am I going to get?”
  49. 49. “Whatever you tell us you want.”
  50. 50. “How long is this going to take?”
  51. 51. “As long as is necessary.”
  52. 52. “How much is this going to cost?”
  53. 53. “As much as you’re willing to spend”
  54. 54. http://agilebusinessmanagement.o rg - Case Studies - Articles - Community Join our Agile Journey
  55. 55. To learn more, check out Directing the Agile Organisationby Evan Leybourn available at Amazon and all good book stores CLICK TO DISCOVER MORE
  56. 56. PS: #noprojects consistent and continuous, outcomes focused, change
  57. 57. customer trust partnership identification contract reference
  58. 58. Do Defer Limit Avoid Low Effort (5 minutes)High Effort (Ongoing) HighValueLowValue Status Quo
  59. 59. To learn more, check out Directing the Agile Organisationby Evan Leybourn available at Amazon and all good book stores CLICK TO DISCOVER MORE

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