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Agile contracting a real challenge


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Many people seem to realize that the standard (waterfall way) of software development doesn't deliver the requested results. Agile is the way to go. But how to make sure that you will get what you want? What contract to prepare? Seeing the lack of ready templates, Agile contracting still seem to be a real challenge.

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Agile contracting a real challenge

  1. 1. Picture source:
  2. 2. • Clients believe user, functional and system requirements are fully known and documented in a way that enables efficient development • And that’s why many features developed are never used • Projects finish out of budget • And mostly too late
  3. 3. Which implies “waterfall” development assuming: 1. You have completed a thorough, efficient design phase, and 2. Requirements won’t change during the development process
  4. 4. • and over processes and tools • over comprehensive documentation • over • over following a plan Source:
  5. 5. Scope Budget Quality
  6. 6. • Time & Material – Protects the supplier (no risk) – No protection for the customer (full risk) • Capped Time & Material – Fixed agreed budget – Share savings – Often variable scope projects – Supplier expenses paid upfront – Customer’s risk limited © Goyello - Confidential 10
  7. 7. • Incremental delivery – Customer can stop project at any “delivery moment”, “Money for nothing” – 20% (or more) of remaining budget for provider • Cost targeted – Both parties agree on a realistic final price, although this is rather difficult – Savings will be shared – Over budget both parties pay a penalty © Goyello - Confidential 11
  8. 8. The proof of the pudding
  9. 9. Client Call Center Health facility Sell insurance Contracting Appointment Visit Invoicing
  10. 10. • Workshops with end-users • High level estimation for 10 releases • Agreed fixed budget with cap, cost targeted • Every release new contract • Iterations upfront agreed • Acceptation criteria “known”upfront • Satisfaction evaluation (with payment impact) per iteration/release • Changes as appendix • New work, additional budget
  11. 11. Picture source: stock.xchng
  12. 12. • Framework agreement • Agreement per release • Fixed budget (per release as well) • Fixed date • Flexible approach/scope Planning Realization Evaluation iteration 2 week iterations Agreement about the planning Demo showing the iteration result SKOK provided a mark for the iteration Release definition (contract) Release Acceptation protocol Iteration agreement
  13. 13. • Software Development: How the Traditional Contract Model Increases the Risk of Failure, Susan Atkinson and Gabrielle Benefield, 28 May 2013, InfoQ, • An overview of Agile Contracts, Kane Mar, overview-of-agile-contracts/ • Why Traditional “Fixed Bid” Software Projects Usually Fail, Paul Dittmann, 15 December 2009, • Money for nothing and change for free, • Money for nothing, patterns/value-stream-pattern-language/product-backlog/money-for- nothing • Change for free, patterns/value-stream-pattern-language/product-backlog/change-for- free • Flexible contract template, © Goyello - Confidential 19
  14. 14. Contact details: @    DEDICATED TO YOU Feel free to contact and follow! Goyello Sp. z o.o. Al. Grunwaldzka 472 80-309 Gdansk