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Trifork GOTO Night

Agile fix price contracts in software
projects

12. December 2013 / erwin.saegesser@nis.ch
Trifork GOTO Night

„I don’t like the term agile fix price
contracts“

12. December 2013 / erwin.saegesser@nis.ch
Trifork GOTO Night

„Agile fix price contracts Sometimes it’s better to withdraw
from an opportunity“
12. December 2013 / erwin.saegesser@nis.ch
Trifork GOTO Night

„Agile fix price projects require a
variable scope“

12. December 2013 / erwin.saegesser@nis.ch
... would you?
... it leads to believe
Better is ...

“… can be made a success, but you
need to know the [rather simple]
tricks of the trade“
Not another miracle
Not another miracle

Discipline.
Transparency.
Honesty.
Trust.
Characteristics of projects
Characteristics of projects
New.
Complex.
Deliver a piece of software.
Most probably the increments impact
existing processes.
Have more unknowns than knowns.
Why projects fail
Why projects fail
Lack of input.
Incomplete specs.
Changes.
Unrealistic expectations.

Source: Standish Group, 2009
Why projects fail
Sounds like engagement, communication and
process challenges …
Scrum
Scrum
Engage with the customer.
Better manage the unknown.
Be transparent [do you want that?] and hence
manage expectations.
Embrace change.
Discover challenges - or better impediments - early
in the project.
But why do Scrum projects fail?
1
A misperception and mostly
a complete lack of rules
With it goes …
… lack of discipline
… lack of communication
… lack of experience
Complete lose of control
Complete lose of

2

TRUST

Causes a fall back into old patterns
[when it is too late]
What can we do to ease
the pain?
3
Write down all missing
pieces in a contract
[guiding principles]
Typical project: Fix price contract using
agile methodology. Appendix … see
agilemanifesto.org bla bla bla
Typical project: Fix price contract using
agile methodology. Appendix … see
agilemanifesto.org bla bla bla

Contract: WHAT [you must achieve] in
DETAIL
Project: HOW [the heck are we going to
achieve all this?]
Much better
Contract: WHAT HOW [are we going to work
together] and what is our vision and our
INITIAL scope
Project: HOW WHAT [increments do we
need to build in order to achieve the vision]
As a non-experienced
contractor
w/o Scrum experience don’t
bid for such a project at all

4
With a nonexperienced customer
Start small. Exercise
discipline, communication,
reporting and change
management. Exercise around
user stories and acceptance
criteria [!]. Define what a
valuable and verifiable
increment represents
Define the
communication
Fix bi-weekly meetings.
Wednesday’s is a good choice.
Define a ‘‘jour fix’’.
Build a central glossary.

5
Contract ingredients
Agile contracts do not differ
from ‚normal’ contracts but
they emphasize on other
aspects

6
Instead of requirements and specs: vision
statements and initial scope through a story
map [!]
For estimation [we] use magic estimate.
Cone of uncertainty: Magic estimate for average and
worst case estimate.
Visualize risks on story map [technical and business risk].
Describe roles, artifacts and processes
[rules].

Clarify and exercise them [during a Sprint
Zero project].
Product Owner needs to be in the driver seat.
One Project [Product] – many customers
Customer

Customers

Stakeholder [A]

Stakeholder B [us]

50%

50%

Product Owner

Engineering
Clarify responsibility about the
implementation: Shall we discuss the HOW?
It’s inevitable and very important to have a
steering committee.
Setup a two level controlling with project team and
steering committee.
The steering committee agrees upon agile artifacts.
Operational level
Daily updates in Jira.
Biweekly sprint demo/planning minutes through
Confluence.
Story map shall be updated after each sprint.

On a more strategic level we report every
three months.
Steering committee: There is only one Preso
Work done since last review.
Results.
Addressed risks and status of risks.
Status with respect to consensus.
Current scope in points [story map].
Scope change.
Cost and remaining budget [cost per point].
Assessment of the situation and recommended next steps.
Clarify Intellectual Property [IP] rights.

If
‘‘money for nothing’’ approaches don’t fit you may want
to use the IP for a product.
Describe project duration
Ordinary termination.
Early termination.
Contract extension.

and scope of delivery
Targeted delivery: Solution ‘x’ consisting of artifacts from 1-n sprints.
Minimum: All realized sprints to include source code.
Documentation of the requirements in the form of a backlog.
Financial aspects.
Billing - We are consistently invoicing on a
monthly basis [two sprints]. It keeps
everybody engaged ;-)
What can a
contractor do?

First and foremost ... do your homework!
Be agile yourself

7
EBM
EBL

IBW

EWZ EN Uster

NIS AG
EKZ
Founded 1996
CKW
30 employees
BKW
Software and
Swisscom
Serviceprovider for
Utilities
2 Dev Teams
AEK

AEN

AEW

EUG

SAK

EWS

EWA

AKONIS

EW Flims

Energie Thun

SES

SES

EWZ-GR
EBM
EBL
AEK

AEN

IBW

EWZ EN Uster

EKZ

AEW

SAK

EUG

CKW
BKW

EWS
EWA

Swisscom

AKONIS

EW Flims
Energie Thun
EWZ-GR

SES

SES
Operational excellence
Through a Continuous Inprovement Process [CIP].
Through external audits.
Through external consulting.

Our performance index: Velocity [points]
A Continuous Integration [CI] framework
8
A structured allocation of
resources and a process for
pro-actively eliminating
impediments
Planning
Resource
allocation

Sprint

Retrospective

Demo

Impediments
Knowledgemanagement (every month)
Backlog refinement

Other
Wednesday

Wednesday

Wednesday
1
Rules

5
Communication

2

3

Trust

Change behavior

6

7

Contract

Homework

4
Build trust

8
Impediments
Review your contracts and projects
Exercise based on an completed project
Measure your own scrum maturity level
[NOKIA test]

What’s
next
Trifork GOTO Night

Agile fix price contracts can be a
success - we all simply need to ‘do
our homework’ ;-)
12. December 2013 / erwin.saegesser@nis.ch
aber uns
out me
erwin.saegesser@nis.ch
certified scrum professional
nis ag - Schweiz
Credits and Pictures
agilemanifesto.org
scrum.com
agileproductdesign.com
scrum.jeffsutherland.com
www.wickie-film.de
nasaimages.org
flickr.com
library of congress
erikjohanssonphoto.com
google.com

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Goto night - Agile fix price contracts