The document discusses the adoption of agile methodologies in organizations, highlighting the historical context of project success and failure rates. It emphasizes the importance of user involvement, executive support, and clear business objectives for successful agile implementation and stresses the need for cultural shifts within organizations to foster an effective agile environment. Additionally, it identifies common pitfalls of 'faux-agile' practices and outlines best practices for genuine agile-lean hybrid approaches that integrate business and IT effectively.

1. Adopting Agile in the Organization
Al Goerner
Agile Edge - UK
30 April 2009

2. Our Track Record as a Industry (circa 1978-2000)
IT Project Success & Failure
100%
90%
9%
16% These statistics have been very stable
28% for 30 years. And, they aren’t good.
80%
70% Only in the last 7-8 years have they
60% 62% 47% started to move in a more positive
50%
50% direction. This movement is directly
40%
attributable to incremental, iterative,
30%
collaborative, feedback-driven,
20% 37%
30% business-value-focused methods.
10% 22%
0%
Large Companies Medium Companies Small Companies
Cancelled Challenged Successful Overrun & Underdeliver
300%
250% 230% 239%
214%
Out of every 100 projects, 202%
200% 178% 182%
there will be 94 restarts!
Some projects are restarted 150%
several times. 100%
65% 74%
42%
50%
0%
Source: “The CHAOS Report”, Standish Group, 1994. Large Companies Medium Companies Small Companies
Schedule Overruns Budget Overruns Features Delivered
2

3. The Impact of Agile-Lean Techniques
2004 Chaos Report 1994 2004 Top 10 Reasons for Success
(2004 Chaos Report, Standish Group)
Successful Projects 16% 29% • User Involvement
Challenged Projects 53% 53% • Executive Mgmt Support
• Clear Business Objectives
Failed Projects 31% 15% • Optimizing Scope
Avg. Schedule Overrun +180% +56% • Agile Process
• Project Manager Expertise
Avg. Budget Overrun +164% +84% • Financial Management
• Skilled Resources
Source: “The CHAOS Report”, Standish Group, 2004.
• Formal Methodology
• Standard Tools & Infrastructure
Agile Traditional
Low Median High Studies Low Median High Points
1. Cost 10% 26% 70% 9 3% 20% 87% 21
2. Schedule 11% 71% 700% 19 2% 37% 90% 19
3. Productivity 14% 122% 712% 27 9% 62% 255% 17
4. Quality 10% 70% 1,00% 53 7% 50% 132% 20
5. Satisfaction 70% 70% 70% 1 4% 14% 55% 6
6. ROI 240% 2633% 8852% 29 200% 470% 2770% 16
Source: “What is the ROI of Agile vs Traditional Methods?”,
Dr. David F. Rico, based on 69 studies.
3

4. Quantifying the Return
A Local Case Study: Valtech-India
Agile / Lean Adoption
Background Period: 2005-2008
Team Size - 15-20 (Average)
Geography – Globally Distributed (typically 2 regions)
Coaching / Training Duration –
• 6-10 Iterations
• Iteration Length of 3-4 Weeks
• Total Duration 4.5-10 months
• Productivity measured by Function Points
Projects analyzed, 2006-2008:
Productivity increased by 75- 90%, measured in FP/day/person
Defects reduced by 45%, measured in defects per FP
Estimation variance was reduced to less than 5%
Noteworthy:
Transformed teams sustained improvements after (both) coaching
and re-assignment (1 year later).
4

5. Beware: Faux-Agile!
Faux-Agile
Adopting a few practices, but not understanding the principles.
Adopt too few practices that do not synergize with each other.
Naïve Agile
Agile that works! … for small teams.
Agile that works! … in an isolated, insulated environment.
Agile-by-the-book, still emphasizing practices more than principles.
Mature Agile
Agile that works! … for small-medium and distributed teams.
Agile that works! … producing sustainable, verifiable results.
2nd-Generation Agile-Lean
Agile-Lean hybrid! … applies Agile-Lean to the entire solution value stream.
Agile-Lean hybrid! … embraces metrics and emphasizes business impact.
Agile-Lean hybrid! … integrates the Business with IT.

6. Bottom Line
An Agile team in a non-agile
environment
will not
long survive.
Development Agility
& Business Agility
go Hand-in-Hand.

7. What Your Partner is
Thinking when you say …
“Everything you think you know is wrong.”
“What arrogance! You’ve got 3-6 months, max,
to impress me.”
“Leave us alone. We’ll get the job done.”
“I don’t have the time to baby-sit you, but I doubt
that I can afford to leave you alone.”
“We need 1 of your top people, full-time.”
“I need him/her more than you do. You’ll get
them in their spare-time.”
“We don’t need no stinking project manager.”
“But, that’s just exactly what you are gonna get!”
“We’re Agile now. We don’t give dates or
do reports.”
“That’s what YOU think!”

8. Legitimate Concerns of …
Executive
Business Customer Management
Usable solutions to real
Line
problems. Management
Responsiveness to
changing needs and Business
understanding. Customer
Predictable, reliable
results. Team
Schedule reliability
amidst dependencies.
Individual

9. Make the Case
with the Business Customer
Agility is for the Business Customer’s benefit!
To deliver business value …
• Solving a real problem …
• Faster …
• With more flexibility … Benefit Burden
• At higher quality …
• Reliably and sustainably …
• At the same or lower cost. Remember the Principle of Benefit & Burden!
If your whole message about Agile development is about
tactical development practices, then the best that you can
expect from the business customer is benign disregard.

10. Requirements – the Culture Shift
Requirements are not a contract!
“Perfect is the enemy of Good Enough.”
• Perfect requirements take too long.
That is not our objective.
• There are some requirements no one
knows at the beginning of a project.
The business needs to change its mind as it clarifies its vision.
Requirements are more
exploration than specification!
Invest the time to visualize, clarify, and iterate.
Requirements analysis is just another kind of risk management.

11. Estimates – the Culture Shift
Understand the accuracy of estimates! Project Cost Project
Know the difference between (effort & size)
4X
Schedule
1.6X
estimates and commitments. 2X 1.25X
Insist on an estimation discipline, 1.5X
No-Fidelity
1.15X
and train to that discipline. 1.05X
1.0X
0.95X
Lo-Fidelity
Hi-Fidelity
1.05X
1.0X
0.95X
Improve estimation accuracy 0.67X
0.5X
0.85X
0.8X
through feedback about actuals.
0.25X 0.6X
Project Inception Elaboration Construction
Expect re-forecasts!
Proposal Phase Phase Phase
Assessment Assessment Assessment
When well done, commitments are
pulled in more often than they are
pushed out.
Insist on knowing when the reforecast
is due and its stability.

12. Legitimate Concerns of …
Executive
Line Management Management
What resources to commit
Line
to which project, when. Management
Balancing too many
priorities with too few Business
resources. Customer
How to get more with
less, without breaking Team
your people.
How to serve without
being enslaved.
Individual

13. Accountability – the Culture Shift
Concerns of Management:
Progress: 100.0
90
90.0
• Is this project on-time? 80.0
81
Is it healthy? 70.0
66
69
61 63
Quality: 60.0 52
50 51
47 46 47 48 48
• Is this release likely to be 50.0 43
38 40
43
40.0
fit-for-release when it is 40 38 40
42
33
29
30.0 37 36 37 36 37 36 38 24
ready-for-release? 33 34
30 31 28
20
15
20.0 26 27
11
Diagnostic: 10.0 3
6
2.5
5.25 5.75 4.75 5.25 4.75 3.75 6
1
0 0 0 0 0 0 0 0 0
• What can we do to get this 0.0 1 3 1.5 3 3.5 3.5 4
0.5 0
project back on track? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Measure performance and manage by it!
Only metrics – the right metrics – allow you to know
the answers to these questions.
• When? Who? How much? Why? What if?

14. Responsibilities – the Culture Shift
Only cross-functional teams get projects done!
Handoffs are a productivity and quality killer.
A matrix is the natural structure
of an effective organization.
Share your people so that others will share theirs.
All stars shine in the night sky.
… They don’t have to dim others.
Beware of staff fractionalization!
The Rule of 10%: for every project assigned, you lose 10% of
that person’s productivity to overhead and context switching.
Consider the Stable Team pattern: it is more effective to
assign projects to teams than teams to projects.

15. Planning – the Culture Shift
The Plan is not the Product!
Keep your eye on the prize. Prefer Checklists to Plans!
“The plan is worthless. Don’t tell me what you plan to do;
The planning is priceless.” - Eisenhower tell me what you have done!
Planning is risk management, too!
Planning may proceed forward or backward!
Acme Project Reality Machine
[Depth]
[Risk]
Function Resource Schedule
The 3+2 Dimensions of the “Triple Constraint”

16. Legitimate Concerns of …
Executive
Executive Management Management
How to allocate budget to
Line
maximize ROI. Management
How to advance company
strategic goals. Business
Customer
How to stay on the right
side of the law and the
marketplace. Team
Individual

17. 9 Dimensions of Economic & Organizational ROI
Yes, These CAN and SHOULD be Measured ROI “is the most
complex issue.”
- Capers Jones
Improved Efficiency due to Optimized Process
Higher Productivity due to Improved Morale
Cost Control due to Superior On-time Performance
Cost Reduction due to Improved Maintainability
Higher Quality due to Improved Defect Removal
Benefit Improvement due to Integral Customer Feedback
Benefit Acceleration due to Incremental Delivery
Benefit Recovery due to Superior On-time Performance
Opportunity Recovery due to Superior On-time Performance
17

18. Governance – the Culture Shift
Governance should be aligned
to the development process,
not vice versa!
Project Governance
Financial Governance
Security Governance
Legal, Risk, & Compliance Governance
Technology & Strategic Architecture Governance
The right question,
asked at the right time,
answered and recorded.
Audits, after the fact, add no value.

19. 6 Missions of a Project Mgmt Office
Broaden and balance your PMO!
Enabling Establishing Empowering
Change Behaviors Planning
Coaching & Project
Evangelism
Mentoring Monitoring
Energy for Change
Shaping Behaviors Measuring Outcomes
Owning Portfolio
Training Practices Management
Vocabulary for Change
Certifying Skillsets Setting Goals

20. 6 Wishes for Financial Governance
1. Implement a rolling funding cycle
& rational contingency planning!
2. Institute a deliberate process of project
proposal assessment and prioritization!
3. Release project funding incrementally!
4. Incent for project success, not just
individual contribution!
5. Accept and enculturate that canceling
a failing project is, itself, a success!
6. Require a project benefit evaluation annually
for the 3 years following project completion!

21. As for the rest, …
Security, Legal-Risk-Compliance, &
Technology-Architecture governance
processes should be facilitative and
consultative, not juridical.
The issues that are important to these
governance groups must be articulated
if they are to be constructively complied with!

22. Finally, for you consideration:
the Zen of Agile Adoption
Problem in Evidence
The symptoms and (eventually) causes are made visible and evident.
Simple Elegance
A few simple elements and the rules of their combination and
interrelationship produce a rich behavior or set of possibilities.
Balanced Reciprocity
The participants in the transformed system must all benefit from the
transformation in proportion to their investment and participation.
Evolved Vocabulary
Language shapes Thought. Thought shapes Values. Values shape Behavior.
A new vocabulary must emerge and be differentiated from the old in order
to ensure that Thought, Values and Behavior are in alignment.
Embodied Metaphor
Don’t make the metaphor abstract too soon. Don’t take it
from our hands too soon, lest we abdicate of the responsibility
to own & master the metaphor to our tools.
Transformed Context
If only the affective levels of a system are modified,
change will still not last. At least one contextual level
must be mutated to establish the environment for success.
Single Voice
The voice of the change-agent must be unified and consistent.
change-
Otherwise, the voice of the client will be dissonant.

23. Three Things to Do Now…

24. Thank you for attending!
Questions???
Contacts:
Al Goerner Jonathan Cook
Principal Emterprise Consultant Business Development, United Kingdom
al.goerner@valtech.com jonathan.cooke@valtech.com
+01 214 724 7240 +44 7748638031