Agile fixed-price projects still seem to be a contradiction. However, they also offer an opportunity for a hybrid project that combines the advantages of the two worlds "Agile" and "Classic". The lecture is based on the experience of two long-standing projects, which were successfully carried out with the help of the hybrid approach. What are the prerequisites to be observed in order to achieve this? What is part of the project setting and, above all, how do you manage an agile fixed price?

1. How to manage agile fixed-price projects?
Tassilo Kubitz
10.04.2017

2. Tassilo Kubitz
• 1969 / Berlin
• Meteorologist
• 20 years – IT / Software development / Team lead / Project lead
• Head of Competence Center Project Management akquinet tech@spree GmbH

3. akquinet tech@spree GmbH
• Part of the akquinet AG (IT consultancy)
• Individual software development projects
• Across the industry
• Industry 4.0 / Enterprise Mobility, e.g.
• Production planning (knitting machines)
• Remote maintenance (glove boxes)
• Fleet management (forklift)
• Flexible project management (from traditional to agile)

4. Who has experiences with…
• …the classical / traditional approach?
• …agile methods?
• …both „worlds“?

5. Agenda
• Agile meets classic – Can one combine that?
• Why is only the product owner to be strangled?
• How to manage agile fixed-price projects?
• Pitfalls
• Conclusion

6. Agenda
• Agile meets classic – Can one combine that?
• Why is only the product owner to be strangled?
• How to manage agile fixed-price projects?
• Pitfalls
• Conclusion

7. The agile fixed-price…
Is that a contradiction?
Why?

8. Agile meets classic – Can one combine that?
Yegor Bugayenko
12 Mistakes in agile manifesto
The Manifesto doesn't say anything
about the cost of development
and that's probably because it was
written by those who make money
(programmers),
not those who spend it (customers).

9. Agile meets classic – Can one combine that?
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
So why not combine?Over does not mean instead!

10. Agile meets classic – Can one combine that?
• There is no generally correct procedure - there is always only appropriate procedure
• The border from traditional to
agile is fluent…
• So why not combine?
by Baf Kurtulaj

11. Agile meets classic – Can one combine that?
• The Requirements of our customers
• Compliance with a budget limit
• Plannability of deadline and costs
• Flexibility throughout the project
• Lightweight change management
• So why not combine?
– agile
– agile
– traditional
– traditional

12. Agile meets classic – can one combine that?
The agile fixed-price project
is possible!

13. The agile fixed-price project…
• Where is the agility?
• User Story
• Iterations
• New feature requests
• Where is the streering?
• Preliminary planning
• Choosing the next story
• Adaption of the roadmap
• Where is the fixed price?
• Budget frame
• Implementation in fixed-price

14. Agenda
• Agile meets classic – Can one combine that?
• Why is only the product owner to be strangled?
• How to manage agile fixed-price projects?
• Pitfalls
• Conclusion

15. Why is only the product owner to be strangled?
• The „traditional“ PM says about controlling/steering…
=> To keep time and cost, you have to change scope/quality…
Quality
Time Cost
Scope

16. Why is only the product owner to be strangled?
• The product owner…
• represents the client and thus all stakeholders
• attends the daily scrums to get informed (passively)
• is ready to answer the questions of the team
• maintains the product backlog
• prioritizes the product backlog items so that the business value of the product is maximized
and the possibility of early releases of core functionality to achieve a rapid return on
investment

17. Why is only the product owner to be strangled?
• The product owner is responsible for
• ensuring that the correct requirements are in the product backlog
=> Very high business domain knowledge
• for the fact that they are processed in a meaningful order
=> Technology decisions require architectural knowledge
• And now he has to be responsible for dates and budget…

18. Agenda
• Agile meets classic – Can one combine that?
• Why is only the product owner to be strangled?
• How to manage agile fixed-price projects?
• Pitfalls
• Conclusion

19. How to manage agile fixed-price projects?
• Effective control means…
• …always know where you are and where you want to go
• …make changes to the plan possible at any time to get where you want to go

20. Where you want to go to?
• If the project is cut right from the beginning, then it
will be easier to control…
• Setup with the benefit of a requirement with
an impact map
• Structuring the roadmap with
the story map
• Adjust the roadmap with
the Kano model
By Craigwbrown - Own work, CC BY-SA 3.0
www.impactmapping.org
Winnipeg Agilist

21. Make changes to the plan possible
„parallelize the waterfall“ - time2market
Analysis/Design Implementation Acceptance
Feature 1
Feature 2
Feature 3
Earlier releases

22. Make changes to the plan possible
Prioritize with Lean Management – design2cost
Analysis/Design Implementation
Feature 1
Feature 2
Feature 3
Reduced costs and earlier releases
Acceptance

23. How to manage agile fixed-price projects?
• Premilinary Planning
• Big Picture
• Impact Map
• Story Map
• First roadmap
• Rough estimate
• Pick a story
• User Stories
• Estimation
• Use the roadmap
• Implementation
• Priorization
• Omitting
• Adding
• Estimation
Continuous recording and
evaluation of budget and deadlines!!

24. Agenda
• Agile meets classic – Can one combine that?
• Why is only the product owner to be strangled?
• How to manage agile fixed-price projects?
• Pitfalls
• Conclusion

25. Pitfalls…
• The project must fit!
 This method is not suitable for any project
• Communication expenditure (for changing the plan)
 Flexibility costs and needs a separate cost center!
• Understanding and trust for the process (the agile mindset) does not come about the
paper called "contract"
 Simulation of the procedure in a workshop (don‘t forget the role purchase)
 Start with smaller budgets or define exit points after each release

26. Agenda
• Agile meets classic – Can one combine that?
• Why is only the product owner to be strangled?
• How to manage agile fixed-price projects?
• Pitfalls
• Conclusion

27. Conclusion
• Agility is controllable when the project is set up accordingly
• benefit and value (Impact Mapping…)
• Method is suitable for traditional thinking customers
• time2market
• design2cost
• Applicable when trust is present
• internal projects
• further development projects

28. This is the end…
Thank you!
The final discussion is open 

29. Sources
• http://agilemanifesto.org
• https://dzone.com/articles/twelve-mistakes-in-agile-manifesto
• https://www.linkedin.com/pulse/why-stacey-matrix-model-can-help-understand-agile-baf-kurtulaj-mba
• https://www.impactmapping.org/
• http://winnipegagilist.blogspot.de/2012/03/how-to-create-user-story-map.html
• https://commons.wikimedia.org/w/index.php?curid=23262780
• https://de.slideshare.net/iku165/d42-ma2015-tassilokubitzagilefestpreisprojekte