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Dr. David F. Rico, PMP, CSEP, FCP, FCT, ACP, CSM, SAFE, DEVOPS
Twitter: @dr_david_f_rico
Website: http://www.davidfrico.com
LinkedIn: http://www.linkedin.com/in/davidfrico
Agile Capabilities: http://davidfrico.com/rico-capability-agile.pdf
Agile Cost of Quality: http://www.davidfrico.com/agile-vs-trad-coq.pdf
DevOps Return on Investment (ROI): http://davidfrico.com/rico-devops-roi.pdf
Dave’s NEW Leadership Video: http://www.youtube.com/watch?v=70LRzOk9VGY
Dave’s NEW Business Agility Video: http://www.youtube.com/watch?v=hTvtsAkL8xU
Dave’s NEWER Scaled Agile Framework SAFe 4.5 Video: http://youtu.be/1TAuCRq5a34
Dave’s NEWEST Development Operations Security Video: http://youtu.be/X22kJAvx44A
DoD Fighter Jets versus Amazon Web Services: http://davidfrico.com/dod-agile-principles.pdf
Business Value of
Lean & Agile Methods
Using Return on Investment (ROI)
and Real Options Analysis
Author Background
 Gov’t contractor with 35+ years of IT experience
 B.S. Comp. Sci., M.S. Soft. Eng., & D.M. Info. Sys.
 Large gov’t projects in U.S., Far/Mid-East, & Europe
2

 Career systems & software engineering methodologist
 Lean-Agile, Six Sigma, CMMI, ISO 9001, DoD 5000
 NASA, USAF, Navy, Army, DISA, & DARPA projects
 Published seven books & numerous journal articles
 Intn’l keynote speaker, 200+ talks to 14,500 people
 Specializes in metrics, models, & cost engineering
 Cloud Computing, SOA, Web Services, FOSS, etc.
 Professor at 7 Washington, DC-area universities
3
Internet of Things—Dinosaur Killer
IoT is an Extinction Level Event
• 25-50B Devices on IOT
• 5-10B Internet Hosts
• 4-8B Mobile Phones
• 2-3B End User Sys
• Mass Business Failure
4
Overruns
Attrition
Escalation
Runaways
Cancellation
Global
Competition
Demanding
Customers
Organization
Downsizing
System
Complexity
Technology
Change
Vague
Requirements
Work Life
Imbalance
Inefficiency
High O&M
Lower DoQ
Vulnerable
N-M Breach
Reduced
IT Budgets
81 Month
Cycle Times
Redundant
Data Centers
Lack of
Interoperability
Poor
IT Security
Overburdening
Legacy Systems
Obsolete
Technology & Skills
Pine, B. J. (1993). Mass customization: The new frontier in business competition. Boston, MA: Harvard Business School Press.
Pontius, R. W. (2012). Acquisition of IT: Improving efficiency and effectiveness in IT acquisition in the DoD. Second Annual
AFEI/NDIA Conference on Agile in DoD, Springfield, VA, USA.
Today’s WHIRLWIND ENVIRONMENT
Size vs. Quality
DEFECTS
0.00
3.20
6.40
9.60
12.80
16.00
0 2 6 25 100 400
SIZE
Size vs. Productivity
PRODUCTIVITY
0.00
1.00
2.00
3.00
4.00
5.00
0 2 6 25 100 400
SIZE
Size vs. Change
CHANGE
0%
8%
16%
24%
32%
40%
0 2 6 25 100 400
SIZE
Size vs. Success
SUCCESS
0%
12%
24%
36%
48%
60%
0 2 6 25 100 400
SIZE
5Jones, C. (1991). Applied software measurement: Assuring productivity and quality. New York, NY: McGraw-Hill.
Large TRADITIONAL Projects
Always 7%
Often 13%
Sometimes
16%
Rarely
19%
Never
45%
WASTE
6
Other 7%
Requirements
47%
Design
28%
Implementation
18%
DEFECTS
$0.0
$0.4
$0.7
$1.1
$1.4
$1.8
2002 2003 2004 2005 2006 2007 2008 2009 2010
GLOBAL IT PROJECT FAILURES
16% 53% 31%
27% 33% 40%
26% 46% 28%
28% 49% 23%
34% 51% 15%
29% 53% 18%
35% 46% 19%
32% 44% 24%
33% 41% 26%
0% 20% 40% 60% 80% 100%
1994
1996
1998
2000
2002
2004
2006
2008
2010
IT PROJECT FAILURES
Large TRADITIONAL Projects—Cont’d
What is Agility?
 A-gil-i-ty (ә-'ji-lә-tē) Property consisting of quickness,
lightness, and ease of movement; To be very nimble
 The ability to create and respond to change in order to
profit in a turbulent global business environment
 The ability to quickly reprioritize use of resources when
requirements, technology, and knowledge shift
 A very fast response to sudden market changes and
emerging threats by intensive customer interaction
 Use of evolutionary, incremental, and iterative delivery
to converge on an optimal customer solution
 Maximizing BUSINESS VALUE with right sized, just-
enough, and just-in-time processes and documentation
Highsmith, J. A. (2002). Agile software development ecosystems. Boston, MA: Addison-Wesley.
7
 
WORKING
PRODUCTS
VS COMPREHENSIVE
DOCUMENTATION
RESPONDING
TO CHANGE
VS FOLLOWING
A PLAN
CUSTOMER
COLLABORATION
VS CONTRACT
NEGOTIATION
INDIVIDUALS &
INTERACTIONS
VS PROCESSES
AND TOOLS
8
 People-centric way to create innovative solutions
 Product-centric alternative to documents/process
 Market-centric model to maximize business value
Agile Manifesto. (2001). Manifesto for agile software development. Retrieved September 3, 2008, from http://www.agilemanifesto.org

What are Agile Values?
What is Lean?
9
 
 Lean (lēn): Property consisting of being thinness,
slimness, and skinniness; To be extremely slender
 A customer-driven product development process that
delivers the maximum amount of business value
 An economical way of planning and managing the
development of complex new products and services
 A product development process that is free of excess
waste, capacity, and non-value adding activities
 Just-enough, just-in-time, and right-sized product
development processes, documentation, and tools
 A product development approach that is ADAPTABLE
TO CHANGE in customer needs and market conditions
Womack, J. P., & Jones, D. T. (1996). Lean thinking: Banish waste and create wealth in your corporation. New York, NY: Free Press.
10
 Time-centric way to compete on speed & time
 Customer-centric model to optimize cost & quality
 Pull-centric alternative to wasteful mass production
Leffingwell, D. (2017). The SAFe house of lean. Retrieved February 19, 2018, from http://www.scaledagileframework.com

What are Lean Values?
Respectfor
People&Culture
Flow
Innovation
Relentless
Improvement
Value
Leadership
Lean & Agile GOLDILOCKS Zone
11
 Traditional project management is scope-based
 Agile project management is primarily time-based
 Batchsize, capacity, & time key to market response
Rico, D. F. (2017). Lean triangle: Triple constraints. Retrieved December 17, 2017, from http://davidfrico.com/lean-triangle.pdf
Sylvester, T. (2013). Waterfall, agile, and the triple constraint. Retrieved December 16, 2017, from http://tom-sylvester.com/lean-agile/waterfall-agile-the-triple-constraint
Pound, E. S., Bell, J. H., Spearman, M. L. (2014). Factory physics: How leaders improve performance in a post-lean six sigma world. New York, NY: McGraw-Hill Education.
WATERFALL LEANAGILE
Scope
Cost Time
CostTime
Scope
Batchsize
Capacity Time
Scope Drives
Resources
Batchsize Drives
Lead/Cycle Time
Time Drives
Scope
RESOURCE
PERFORMANCE
BUSINESS
VALUE
MARKET
RESPONSE
CONSTRAINTS
ESTIMATES
Agile World View
 “Agility” has many dimensions other than IT
 It ranges from leadership to technological agility
 Today’s focus is on organizational & enterprise agility
 
Agile Leaders
Agile Organization Change
Agile Acquisition & Contracting
Agile Strategic Planning
Agile Capability Analysis
Agile Program Management
Agile Tech.
Agile Information Systems
Agile Tools
Agile Processes & Practices
Agile Systems Development
Agile Project Management
12

Network
Computer
Operating System
Middleware
Applications
APIs
GUI
 Agile requirements implemented in slices vs. layers
 User needs with higher business value are done first
 Reduces cost & risk while increasing business success
13Shore, J. (2011). Evolutionary design illustrated. Norwegian Developers Conference, Oslo, Norway.
Agile Traditional
1 2 3 Faster
 Early ROI
 Lower Costs
 Fewer Defects
 Manageable Risk
 Better Performance
 Smaller Attack Surface
Late 
No Value 
Cost Overruns 
Very Poor Quality 
Uncontrollable Risk 
Slowest Performance 
More Security Incidents 
Seven Wastes
1. Rework
2. Motion
3. Waiting
4. Inventory
5. Transportation
6. Overprocessing
7. Overproduction
MINIMIZES MAXIMIZES
 JIT, Just-enough architecture
 Early, in-process system V&V
 Fast continuous improvement
 Scalable to systems of systems
 Maximizes successful outcomes
 Myth of perfect architecture
 Late big-bang integration tests
 Year long improvement cycles
 Breaks down on large projects
 Undermines business success

Agile Methods—How they work?


 


14
Traditional vs. Agile Cumulative Flow
Work(Story,Point,Task)orEffort(Week,Day,Hour)
Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.)
Work(Story,Point,Task)orEffort(Week,Day,Hour)
Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.)
TRADITIONAL Cumulative Flow
 Late big bang integration increases WIP backlog
 Agile testing early and often reduces WIP backlog
 Improves workflow and reduces WIP & lead times
Anderson, D. J. (2004). Agile management for software engineering. Upper Saddle River, NJ: Pearson Education.
Anderson, D. J. (2010). Kanban: Successful evolutionary change for your technology business. Sequim, WA: Blue Hole Press.

Agile Methods—Workflow Results
 
AGILE Cumulative Flow
Models of AGILE DEVELOPMENT
15
 Agile methods spunoff flexible manufacturing 1990s
 Extreme Programming (XP) swept the globe by 2002
 Today, over 90% of IT projects use Scrum/XP hybrid
Use Cases
Domain Model
Object Oriented
Iterative Dev.
Risk Planning
Info. Radiators
Planning Poker
Product Backlog
Sprint Backlog
2-4 Week Spring
Daily Standup
Sprint Demo
Feasibility
Business Study
Func. Iteration
Design Iteration
Implementation
Testing
Domain Model
Feature List
Object Oriented
Iterative Dev.
Code Inspection
Testing
Release Plans
User Stories
Pair Programmer
Iterative Dev.
Test First Dev.
Onsite Customer
Cockburn, A. (2002). Agile software development. Boston, MA: Addison-Wesley.
Schwaber, K., & Beedle, M. (2001). Agile software development with scrum. Upper Saddle River, NJ: Prentice-Hall.
Stapleton, J. (1997). DSDM: A framework for business centered development. Harlow, England: Addison-Wesley.
Palmer, S. R., & Felsing, J. M. (2002). A practical guide to feature driven development. Upper Saddle River, NJ: Prentice-Hall.
Beck, K. (2000). Extreme programming explained: Embrace change. Reading, MA: Addison-Wesley.
CRYSTAL METHODS
- 1991 -
SCRUM
- 1993 -
DSDM
- 1993 -
FDD
- 1997 -
XP
- 1998 -
Reflection W/S Retrospective Quality Control Quality Control Continuous Del.

16
 Numerous models of lean development emerging
 Based on principles of lean thinking & just-in-time
 Include software, project, & product management
Poppendieck, M., & Poppendieck, T. (2003). Lean software development: An agile toolkit for software development managers. Boston, MA: Addison Wesley.
Reinertsen, D. G. (2009). The principles of product development flow: Second generation lean product development. New York, NY: Celeritas.
Anderson, D. J. (2010). Kanban: Successful evolutionary change for your technology business. Sequim, WA: Blue Hole Press.
Olsen, D. (2015). The lean product playbook: How to innovate with minimum viable products and rapid customer feedback. Hoboken, NJ: John Wiley & Sons.
Humble, J., Molesky, J., & O'Reilly, B. (2015). Lean enterprise: How high performance organizations innovate at scale. Sebastopol, CA: O'Reilly Media.
LEAN SOFTWARE
- 2003 -
LEAN PRINCIPLES
- 2009 -
LEAN KANBAN
- 2010 -
LEAN PRODUCTS
- 2015 -
LEAN ENTERPRISES
- 2015 -
 Create Value
 Eliminate Waste
 Amplify Learning
 Late Decisions
 Deliver Fast
 Empower Team
 Build-in Integrity
 See the Whole
 Economic View
 Manage Queues
 Use Variability
 Small Batches
 WIP Constraints
 Flow Control
 Fast Feedback
 Decentralize
 Visualize
 Limit WIP
 Manage Flow
 Use Policies
 Quality Focus
 Lead Times
 Improvement
 Reduce Variation
 Target Customer
 Market Needs
 Market Value
 Min. Viability
 Prototype
 User Experience
 Market Testing
 Improvement
 Measure Risks
 Uncertainty
 Marketing
 Improvement
 Value & Flow
 Lean Engineering
 Experimentation
 Bus. Alignment

Models of LEAN DEVELOPMENT
17

TDD
- 2003 -
CI
- 2006 -
BDD
- 2008 -
CD
- 2011 -
DEVOPS
- 2012 -
DEVOPSSEC
- 2014 -
 User Story
 Acc Criteria
 Dev Unit Test
 Run Unit Test
 Write SW Unit
 Re-Run Unit Test
 Refactor Unit
 Building
 Database
 Inspections
 Testing
 Feedback
 Documentation
 Deployment
 Analyze Feature
 Acc Criteria
 Dev Feat. Test
 Run Feat. Test
 Develop Feature
 Re-Run Feature
 Refactor Feat.
 Packaging
 Acceptance
 Load Test
 Performance
 Pre-Production
 Certification
 Deployment
 Sys Admin
 Config. Mgt.
 Host Builds
 Virtualization
 Containerization
 Deployment
 Monitor & Supp
 Sec. Engineer.
 Sec. Containers
 Sec. Evaluation
 Sec. Deploy.
 Runtime Prot.
 Sec. Monitoring
 Response Mgt.
Beck, K. (2003). Test-driven development: By example. Boston, MA: Addison-Wesley.
Duvall, P., Matyas, S., & Glover, A. (2006). Continuous integration. Boston, MA: Addison-Wesley.
Barker, K., & Humphries, C. (2008). Foundations of rspec: Behavior driven development with ruby and rails. New York, NY: Apress.
Humble, J., & Farley, D. (2011). Continuous delivery. Boston, MA: Pearson Education.
Huttermann, M. (2012). Devops for developers: Integrate development and operations the agile way. New York, NY: Apress.
Bird, J. (2016). Devopssec: Delivering secure software through continuous delivery. Sebastopol, CA: O'Reilly Media.
 Numerous models of lean-agile testing emerging
 Based on principles of lean & agile one piece flow
 Include software, hardware, system, & port. testing
Models of AGILE DELIVERY
Models of AGILE PROJECT MGT.
18
 Dozens of Agile project management models emerged
 Many stem from principles of Extreme Programming
 Vision, releases, & iterative development common
Prioritization
Feasibility
Planning
Tracking
Reporting
Review
Visionate
Speculate
Innovate
Re-Evaluate
Disseminate
Terminate
Scoping
Planning
Feasibility
Cyclical Dev.
Checkpoint
Review
Envision
Speculate
Explore
Iterate
Launch
Close
Vision
Roadmap
Release Plan
Sprint Plan
Daily Scrum
Retrospective
Thomsett, R. (2002). Radical project management. Upper Saddle River, NJ: Prentice-Hall.
DeCarlo, D. (2004). Extreme project management: Using leadership, principles, and tools to deliver value in the face of volatility. San Francisco, CA: Jossey-Bass.
Wysocki, R.F. (2010). Adaptive project framework: Managing complexity in the face of uncertainty. Boston, MA: Pearson Education.
Highsmith, J. A. (2010). Agile project management: Creating innovative products. Boston, MA: Pearson Education.
Layton, M. C., & Maurer, R. (2011). Agile project management for dummies. Hoboken, NJ: Wiley Publishing.
RADICAL
- 2002 -
EXTREME
- 2004 -
ADAPTIVE
- 2010 -
AGILE
- 2010-
SIMPLIFIED
- 2011 -

19
 Numerous models of agile portfolio mgt. emerging
 Based on lean-kanban, release planning, and Scrum
 Include organization, program, & project management
Schwaber, K. (2007). The enterprise and scrum. Redmond, WA: Microsoft Press.
Leffingwell, D. (2007). Scaling software agility: Best practices for large enterprises. Boston, MA: Pearson Education.
Larman, C., & Vodde, B. (2008). Scaling lean and agile development: Thinking and organizational tools for large-scale scrum. Boston, MA: Addison-Wesley.
Ambler, S. W., & Lines, M. (2012). Disciplined agile delivery: A practitioner's guide to agile software delivery in the enterprise. Boston, MA: Pearson Education.
Thompson, K. (2013). cPrime’s R.A.G.E. is unleashed: Agile leaders rejoice! Retrieved March 28, 2014, from http://www.cprime.com/tag/agile-governance
Schwaber, K. (2015). The definitive guide to nexus: The exoskeleton of scaled scrum development. Lexington, MA: Scrum.Org

Models of AGILE PORTFOLIO MGT.
ESCRUM
- 2007 -
SAFe
- 2007 -
LESS
- 2007 -
DAD
- 2012 -
RAGE
- 2013 -
SPS
- 2015 -
Product Mgt
Program Mgt
Project Mgt
Process Mgt
Business Mgt
Market Mgt
Strategic Mgt
Portfolio Mgt
Program Mgt
Team Mgt
Quality Mgt
Delivery Mgt
Business Mgt
Portfolio Mgt
Product Mgt
Area Mgt
Sprint Mgt
Release Mgt
Business Mgt
Portfolio Mgt
Inception
Construction
Iterations
Transition
Business
Governance
Portfolio
Program
Project
Delivery
Product Mgt
Program Mgt
Sprint Mgt
Team Mgt.
Integ Mgt.
Release Mgt
20
 Numerous theories of agile leadership have emerged
 Many have to do with delegation and empowerment
 Leaders have major roles in visioning and enabling
AGILE
- 2005 -
EMPLOYEE
- 2009 -
RADICAL
- 2010 -
LEAN
- 2010 -
LEADERSHIP 3.0
- 2011 -
Organic Teams
Guiding Vision
Transparency
Light Touch
Simple Rules
Improvement
Autonomy
Alignment
Transparency
Purpose
Mastery
Improvement
Self Org. Teams
Communication
Transparency
Iterative Value
Delight Clients
Improvement
Talented Teams
Alignment
Systems View
Reliability
Excellence
Improvement
Empowerment
Alignment
Motivation
Scaling
Competency
Improvement
Augustine, S. (2005). Managing agile projects. Upper Saddle River, NJ: Pearson Education.
Pink, D. H. (2009). Drive: The surprising truth about what motivates us. New York, NY: Penguin Books.
Denning, S. (2010). The leader’s guide to radical management: Reinventing the workplace for the 21st century. San Francisco, CA: John Wiley & Sons.
Poppendieck, M, & Poppendieck, T. (2010). Leading lean software development: Results are not the point. Boston, MA: Pearson Education.
Appelo, J. (2011). Management 3.0: Leading agile developers and developing agile leaders. Boston, MA: Pearson Education.
Models of AGILE LEADERSHIP

21
Work(Story,Point,Task)orEffort(Week,Day,Hour)
Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.)
Burndown
Work(Story,Point,Task)orEffort(Week,Day,Hour)
Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.)
Cumulative Flow
Work(Story,Point,Task)orEffort(Week,Day,Hour)
Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.)
Earned Value Management - EVM CPI
SPI
PPC
APC
Work(Story,Point,Task)orEffort(Week,Day,Hour)
Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.)
Earned Business Value - EBV
Agile Methods—Basic Metrics
22
 Late big bang integration increases WIP backlog
 Agile testing early and often reduces WIP backlog
 CI/CD/DevOps lower WIP, Cycle Time, & Lead Time
Nightingale, C. (2015). Seven lean metrics to improve flow. Franklin, TN: LeanKit.

KANBAN BOARD CUMULATIVE FLOW DIAGRAM
LEAD TIME & CYCLE TIME PUTTING IT ALL TOGETHER
Lean Methods—Basic Metrics
 Agile methods are based on traditional measures
 Story points, velocity, and burndown basic metrics
 Experts use Agile EVM, test, ROI & portfolio metrics
23Rico, D. F., Sayani, H. H., & Sone, S. (2009). The business value of agile software methods. Ft. Lauderdale, FL: J. Ross Publishing.
AGILE METRICS
1. Agile CODE Metrics
2. Agile PROJECT Metrics
3. Agile TRACKING Metrics
4. Agile TESTING Metrics
5. Agile VALUE Metrics
6. Agile HEALTH Metrics
7. Agile PORTFOLIO Metrics
1. Agile CODE Metrics
 Code Size
 Code Complexity
 Object Oriented
 Code Coverage
 Code Defects
 Relational Design
2. Agile PROJECT Metrics
 Software Size
 Software Productivity
 Software Effort
 Software Quality
 Software Schedule
 Software Success
3. Agile TRACKING Metrics
 Story Points
 Sprint Burndown
 Release Burndown
 Velocity
 Feature Progress
 Agile Earned Value
4. Agile TESTING Metrics
 Test Coverage
 Test Automation
 Integration Builds
 Running Tested Features
 DevOps Automation
 Deployment Frequency
7. Agile PORTFOLIO Metrics
 Portfolio Kanban
 Epic Progress
 Portfolio Radar
 Release Train Radar
 Lean Portfolio Metrics
 Enterprise Scorecard
6. Agile HEALTH Metrics
 Teamwork Quality
 Collaboration Quality
 Agile Process Maturity
 Agile Adoption Rate
 Degree of Agility
 Product Flexibility
5. Agile VALUE Metrics
 Total Lifecycle Costs
 Total Lifecycle Benefits
 Benefit to Cost Ratio
 Return on Investment
 Net Present Value
 Real Options Analysis
Agile Methods—Metrics Taxonomy
 Analysis of 23 agile vs. 7,500 traditional projects
 Agile projects are 54% better than traditional ones
 Agile has lower costs (61%) and fewer defects (93%)
Mah, M. (2008). Measuring agile in the enterprise: Proceedings of the Agile 2008 Conference, Toronto, Canada.
Project Cost in Millions $
0.75
1.50
2.25
3.00
2.8
1.1
Before Agile
After Agile
61%
Lower
Cost
Total Staffing
18
11
Before Agile
After Agile
39%
Less
Staff
5
10
15
20
Delivery Time in Months
5
10
15
20
18
13.5
Before Agile
After Agile
24%
Faster
Cumulative Defects
625
1250
1875
2500
2270
381
Before Agile
After Agile
93%
Less
Defects
24





Agile Methods—Costs & Benefits
 Costs based on avg. productivity and quality
 Productivity ranged from 4.7 to 5.9 LOC an hour
 Costs were $588,202 and benefits were $3,930,631
25
Rico, D. F., Sayani, H. H., & Sone, S. (2009). The business value of agile software methods: Maximizing ROI with just-in-time processes and documentation.
Ft. Lauderdale, FL: J. Ross Publishing.
d1 = [ln(Benefits  Costs) + (Rate + 0.5  Risk2)  Years]  Risk   Years, d2 = d1  Risk   Years
 
5
1i

Agile Methods—Return on Invest.
Activity Def CoQ DevOps Economics Hours ROI
Development Operations 100 0.001 100 Defects x 70% Efficiency x 0.001 Hours 0.070 72,900%
Continuous Delivery 30 0.01 30 Defects x 70% Efficiency x 0.01 Hours 0.210 24,300%
Continuous Integration 9 0.1 9 Defects x 70% Efficiency x 0.1 Hours 0.630 8,100%
Software Inspections 3 1 2.7 Defects x 70% Efficiency x 1 Hours 1.890 2,700%
"Traditional" Testing 0.81 10 0.81 Defects x 70% Efficiency x 10 Hours 5.670 900%
Manual Debugging 0.243 100 0.243 Defects x 70% Efficiency x 100 Hours 17.010 300%
Operations & Maintenance 0.073 1,000 0.0729 Defects x 70% Efficiency x 1,000 Hours 51.030 n/a
26
 Agile testing is orders-of-magnitude more efficient
 Based on millions of automated tests run in seconds
 One-touch auto-delivery to billions of global end-users
Rico, D. F. (2016). Devops cost of quality (CoQ): Phase-based defect removal model. Retrieved May 10, 2016, from http://davidfrico.com


Under 4
Minutes
4,500 x Faster
than Code
Inspections
Agile Methods—Cost of Quality
27
 Hewlett-Packard is a major user of CI, CD, & DevOps
 400 engineers developed 10 million LOC in 4 years
 Major gains in testing, deployment, & innovation
Gruver, G., Young, M. & Fulghum, P. (2013). A practical approach to large-scale agile development. Upper Saddle River, NJ: Pearson Education.

TYPE METRIC MANUAL DEVOPS MAJOR GAINS
CYCLE TIME
IMPROVEMENTS
Build Time 40 Hours 3 Hours 13 x
No. Builds 1-2 per Day 10-15 per Day 8 x
Feedback 1 per Day 100 per Day 100 x
Regression Testing 240 Hours 24 Hours 10 x
DEVELOPMENT
COST EFFORT
DISTRIBUTION
Integration 10% 2% 5 x
Planning 20% 5% 4 x
Porting 25% 15% 2 x
Support 25% 5% 5 x
Testing 15% 5% 3 x
Innovation 5% 40% 8 x


Agile Methods—HP Case Study
 Assembla went from 2 to 45 releases every month
 15K Google developers run 120 million tests per day
 30K+ Amazon developers deliver 136K releases a day
28Singleton, A. (2014). Unblock: A guide to the new continuous agile. Needham, MA: Assembla, Inc.
62 x Faster
U.S. DoD
IT Project
3,645 x Faster
U.S. DoD
IT Project



Agile Methods—Dot Com Cases
29Ashman, D. (2014). Blackboard: Keep your head in the clouds. Proceedings of the 2014 Enterprise DevOps Summit, San Francisco, California, USA.
 Productivity STOPS due to excessive integration
 Implements DevOps & Microservices around 2010
 Waste elimination, productivity & innovation skyrocket
DEVOPS &
MICROSERVICES
IMPLEMENTED
Agile Methods—Blackboard Case
30Denayer, L. (2017). U.S. DHS citizenship and immigration services: USCIS agile development. Washington, DC. iSDLC Seminar.
 1st gen replete with large portfolios & governance
 2nd-3rd gen yield minor incremental improvements
 4th-5th gen enables big order-of-magnitude impacts





    
Automated GovernanceManual Governance
 
Agile Methods—U.S. DHS Case
31
 Detailed DevOps economics starting to emerge
 ROI ranges from $17M to $195M with minor costs
 Benefits from cost savings, revenue, and availability
Forsgren, N., Humble, J., & Kim, G. (2017). Forecasting the value of devops transformations: Measuring roi of devops. Portland, OR: DevOps Research.
Rico, D. F. (2017). Devops return on investment (ROI) calculator. Retrieved August 29, 2017, from http://davidfrico.com/devops-roi.xls

Agile Methods—Enterprise ROI
 Traditional projects succeed at 50% industry avg.
 Traditional projects are challenged 20% more often
 Agile projects succeed 3x more and fail 3x less often
Standish Group. (2012). Chaos manifesto. Boston, MA: Author.
32
Agile Traditional
Success
42%
Failed
9%
Challenged
49%
Success
14%
Failed
29%
Challenged
57%

Agile Methods—Success Rate
Hoque, F., et al. (2007). Business technology convergence. The role of business technology convergence in innovation
and adaptability and its effect on financial performance. Stamford, CT: BTM Institute.
33
 Study of 15 agile vs. non-agile Fortune 500 firms
 Based on models to measure organizational agility
 Agile firms out perform non agile firms by up to 36%
Agile Methods—Business Benefits
Suhy, S. (2014). Has the U.S. government moved to agile without telling anyone? Retrieved April 24, 2015, from http://agileingov.com
Porter, M. E., & Schwab, K. (2008). The global competitiveness report: 2008 to 2009. Geneva, Switzerland: World Economic Forum. 34
 U.S. gov’t agile jobs grew by 13,000% from 2006-2013
 Adoption is higher in U.S. DoD than Civilian Agencies
 GDP of countries with high adoption rates is greater
High
Low
Low HighAGILITY
COMPETITIVENESS
GOVERNMENT AGILE JOB GROWTH
PERCENTAGE
13,000%
0
2006 2013YEARS
GOVERNMENT COMPETITIVENESS
Agile Methods—National Benefits
35Holler, R. (2015). Ninth annual state of agile survey: State of agile development. Atlanta, GA: VersionOne.
 VersionOne found 94% using agile methods today
 Most are using Scrum with several key XP practices
 Lean-Kanban is a rising practice with a 31% adoption


Continuous
Integration
●
●
●
●
●
●
●
●
●
●
●

●

●
Agile Methods—Adoption Statistics


Scrum Alliance. (2013). Scrum certification statistics. Retrieved April 28, 2015, from http://www.scrumalliance.org
Taft, D. K. (2012). Agile developers needed: Demand outpaces supply. Foster City, CA: eWeek. 36
 Number of CSMs have doubled to 400,000 in 4 years
 558,918 agile jobs for only 121,876 qualified people
 4.59 jobs available for every agile candidate (5:1)

Projected
Projected
* PMI-PMPs grew from 552,977 to 625,346 in 2014 (i.e., added 72,369)
Agile Methods—National Adoption
 Agile methods DON’T mean deliver it now & fix it later
 Lightweight, yet disciplined approach to development
 Reduced cost, risk, & waste while improving quality
37
Rico, D. F. (2012). What’s really happening in agile methods: Its principles revisited? Retrieved June 6, 2012, from http://davidfrico.com/agile-principles.pdf
Rico, D. F. (2012). The promises and pitfalls of agile methods. Retrieved February 6, 2013 from, http://davidfrico.com/agile-pros-cons.pdf
Rico, D. F. (2012). How do lean & agile intersect? Retrieved February 6, 2013, from http://davidfrico.com/agile-concept-model-3.pdf
What How Result
Flexibility Use lightweight, yet disciplined processes and artifacts Low work-in-process
Customer Involve customers early and often throughout development Early feedback
Prioritize Identify highest-priority, value-adding business needs Focus resources
Descope Descope complex programs by an order of magnitude Simplify problem
Decompose Divide the remaining scope into smaller batches Manageable pieces
Iterate Implement pieces one at a time over long periods of time Diffuse risk
Leanness Architect and design the system one iteration at a time JIT waste-free design
Swarm Implement each component in small cross-functional teams Knowledge transfer
Collaborate Use frequent informal communications as often as possible Efficient data transfer
Test Early Incrementally test each component as it is developed Early verification
Test Often Perform system-level regression testing every few minutes Early validation
Adapt Frequently identify optimal process and product solutions Improve performance

















Agile Methods—Summary
38
On Measurement—Lord Kelvin
 Guides to software methods for business leaders
 Communicates the business value of IT approaches
 Rosetta stones to unlocking ROI of software methods
 http://davidfrico.com/agile-book.htm (Description)
 http://davidfrico.com/roi-book.htm (Description)
39

Agile Methods—ROI Resources
Dave’s PROFESSIONAL CAPABILITIES
40
Software
Quality
Mgt.
Technical
Project
Mgt.
Software
Development
Methods
Leadership &
Org. Change
Cost Estimates
& Scheduling
Acquisition &
Contracting
Portfolio &
Program Mgt.
Strategy &
Roadmapping
Lean, Kanban,
& Six Sigma
Modeling &
Simulations
Big Data,
Cloud, NoSQL
Workflow
Automation
Metrics,
Models, & SPC
BPR, IDEF0,
& DoDAF
DoD 5000,
TRA, & SRA
PSP, TSP, &
Code Reviews
CMMI &
ISO 9001
Innovation
Management
Statistics, CFA,
EFA, & SEM
Evolutionary
Design
Systems
Engineering
Valuation — Cost-Benefit Analysis, B/CR, ROI, NPV, BEP, Real Options, etc.
Lean-Agile — Scrum, SAFe, Continuous Integration & Delivery, DevOpsSec, etc.
STRENGTHS – Communicating Complex Ideas • Brownbags & Webinars • Datasheets & Whitepapers • Reviews &
Audits • Comparisons & Tradeoffs • Brainstorming & Ideation • Data Mining & Business Cases • Metrics & Models •
Tiger Teams & Shortfuse Tasks • Strategy, Roadmaps, & Plans • Concept Frameworks & Multi-Attribute Models • Etc.
● Data mining. Metrics, benchmarks, & performance.
● Simplification. Refactoring, refinement, & streamlining.
● Assessments. Audits, reviews, appraisals, & risk analysis.
● Coaching. Diagnosing, debugging, & restarting stalled projects.
● Business cases. Cost, benefit, & return-on-investment (ROI) analysis.
● Communications. Executive summaries, white papers, & lightning talks.
● Strategy & tactics. Program, project, task, & activity scoping, charters, & plans.
PMP, CSEP,
FCP, FCT, ACP,
CSM, SAFE, &
DEVOPS
35+ YEARS
IN IT
INDUSTRY

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Return on Investment (ROI) of Lean & Agile Methods

  • 1. Dr. David F. Rico, PMP, CSEP, FCP, FCT, ACP, CSM, SAFE, DEVOPS Twitter: @dr_david_f_rico Website: http://www.davidfrico.com LinkedIn: http://www.linkedin.com/in/davidfrico Agile Capabilities: http://davidfrico.com/rico-capability-agile.pdf Agile Cost of Quality: http://www.davidfrico.com/agile-vs-trad-coq.pdf DevOps Return on Investment (ROI): http://davidfrico.com/rico-devops-roi.pdf Dave’s NEW Leadership Video: http://www.youtube.com/watch?v=70LRzOk9VGY Dave’s NEW Business Agility Video: http://www.youtube.com/watch?v=hTvtsAkL8xU Dave’s NEWER Scaled Agile Framework SAFe 4.5 Video: http://youtu.be/1TAuCRq5a34 Dave’s NEWEST Development Operations Security Video: http://youtu.be/X22kJAvx44A DoD Fighter Jets versus Amazon Web Services: http://davidfrico.com/dod-agile-principles.pdf Business Value of Lean & Agile Methods Using Return on Investment (ROI) and Real Options Analysis
  • 2. Author Background  Gov’t contractor with 35+ years of IT experience  B.S. Comp. Sci., M.S. Soft. Eng., & D.M. Info. Sys.  Large gov’t projects in U.S., Far/Mid-East, & Europe 2   Career systems & software engineering methodologist  Lean-Agile, Six Sigma, CMMI, ISO 9001, DoD 5000  NASA, USAF, Navy, Army, DISA, & DARPA projects  Published seven books & numerous journal articles  Intn’l keynote speaker, 200+ talks to 14,500 people  Specializes in metrics, models, & cost engineering  Cloud Computing, SOA, Web Services, FOSS, etc.  Professor at 7 Washington, DC-area universities
  • 3. 3 Internet of Things—Dinosaur Killer IoT is an Extinction Level Event • 25-50B Devices on IOT • 5-10B Internet Hosts • 4-8B Mobile Phones • 2-3B End User Sys • Mass Business Failure
  • 4. 4 Overruns Attrition Escalation Runaways Cancellation Global Competition Demanding Customers Organization Downsizing System Complexity Technology Change Vague Requirements Work Life Imbalance Inefficiency High O&M Lower DoQ Vulnerable N-M Breach Reduced IT Budgets 81 Month Cycle Times Redundant Data Centers Lack of Interoperability Poor IT Security Overburdening Legacy Systems Obsolete Technology & Skills Pine, B. J. (1993). Mass customization: The new frontier in business competition. Boston, MA: Harvard Business School Press. Pontius, R. W. (2012). Acquisition of IT: Improving efficiency and effectiveness in IT acquisition in the DoD. Second Annual AFEI/NDIA Conference on Agile in DoD, Springfield, VA, USA. Today’s WHIRLWIND ENVIRONMENT
  • 5. Size vs. Quality DEFECTS 0.00 3.20 6.40 9.60 12.80 16.00 0 2 6 25 100 400 SIZE Size vs. Productivity PRODUCTIVITY 0.00 1.00 2.00 3.00 4.00 5.00 0 2 6 25 100 400 SIZE Size vs. Change CHANGE 0% 8% 16% 24% 32% 40% 0 2 6 25 100 400 SIZE Size vs. Success SUCCESS 0% 12% 24% 36% 48% 60% 0 2 6 25 100 400 SIZE 5Jones, C. (1991). Applied software measurement: Assuring productivity and quality. New York, NY: McGraw-Hill. Large TRADITIONAL Projects
  • 6. Always 7% Often 13% Sometimes 16% Rarely 19% Never 45% WASTE 6 Other 7% Requirements 47% Design 28% Implementation 18% DEFECTS $0.0 $0.4 $0.7 $1.1 $1.4 $1.8 2002 2003 2004 2005 2006 2007 2008 2009 2010 GLOBAL IT PROJECT FAILURES 16% 53% 31% 27% 33% 40% 26% 46% 28% 28% 49% 23% 34% 51% 15% 29% 53% 18% 35% 46% 19% 32% 44% 24% 33% 41% 26% 0% 20% 40% 60% 80% 100% 1994 1996 1998 2000 2002 2004 2006 2008 2010 IT PROJECT FAILURES Large TRADITIONAL Projects—Cont’d
  • 7. What is Agility?  A-gil-i-ty (ә-'ji-lә-tē) Property consisting of quickness, lightness, and ease of movement; To be very nimble  The ability to create and respond to change in order to profit in a turbulent global business environment  The ability to quickly reprioritize use of resources when requirements, technology, and knowledge shift  A very fast response to sudden market changes and emerging threats by intensive customer interaction  Use of evolutionary, incremental, and iterative delivery to converge on an optimal customer solution  Maximizing BUSINESS VALUE with right sized, just- enough, and just-in-time processes and documentation Highsmith, J. A. (2002). Agile software development ecosystems. Boston, MA: Addison-Wesley. 7  
  • 8. WORKING PRODUCTS VS COMPREHENSIVE DOCUMENTATION RESPONDING TO CHANGE VS FOLLOWING A PLAN CUSTOMER COLLABORATION VS CONTRACT NEGOTIATION INDIVIDUALS & INTERACTIONS VS PROCESSES AND TOOLS 8  People-centric way to create innovative solutions  Product-centric alternative to documents/process  Market-centric model to maximize business value Agile Manifesto. (2001). Manifesto for agile software development. Retrieved September 3, 2008, from http://www.agilemanifesto.org  What are Agile Values?
  • 9. What is Lean? 9    Lean (lēn): Property consisting of being thinness, slimness, and skinniness; To be extremely slender  A customer-driven product development process that delivers the maximum amount of business value  An economical way of planning and managing the development of complex new products and services  A product development process that is free of excess waste, capacity, and non-value adding activities  Just-enough, just-in-time, and right-sized product development processes, documentation, and tools  A product development approach that is ADAPTABLE TO CHANGE in customer needs and market conditions Womack, J. P., & Jones, D. T. (1996). Lean thinking: Banish waste and create wealth in your corporation. New York, NY: Free Press.
  • 10. 10  Time-centric way to compete on speed & time  Customer-centric model to optimize cost & quality  Pull-centric alternative to wasteful mass production Leffingwell, D. (2017). The SAFe house of lean. Retrieved February 19, 2018, from http://www.scaledagileframework.com  What are Lean Values? Respectfor People&Culture Flow Innovation Relentless Improvement Value Leadership
  • 11. Lean & Agile GOLDILOCKS Zone 11  Traditional project management is scope-based  Agile project management is primarily time-based  Batchsize, capacity, & time key to market response Rico, D. F. (2017). Lean triangle: Triple constraints. Retrieved December 17, 2017, from http://davidfrico.com/lean-triangle.pdf Sylvester, T. (2013). Waterfall, agile, and the triple constraint. Retrieved December 16, 2017, from http://tom-sylvester.com/lean-agile/waterfall-agile-the-triple-constraint Pound, E. S., Bell, J. H., Spearman, M. L. (2014). Factory physics: How leaders improve performance in a post-lean six sigma world. New York, NY: McGraw-Hill Education. WATERFALL LEANAGILE Scope Cost Time CostTime Scope Batchsize Capacity Time Scope Drives Resources Batchsize Drives Lead/Cycle Time Time Drives Scope RESOURCE PERFORMANCE BUSINESS VALUE MARKET RESPONSE CONSTRAINTS ESTIMATES
  • 12. Agile World View  “Agility” has many dimensions other than IT  It ranges from leadership to technological agility  Today’s focus is on organizational & enterprise agility   Agile Leaders Agile Organization Change Agile Acquisition & Contracting Agile Strategic Planning Agile Capability Analysis Agile Program Management Agile Tech. Agile Information Systems Agile Tools Agile Processes & Practices Agile Systems Development Agile Project Management 12 
  • 13. Network Computer Operating System Middleware Applications APIs GUI  Agile requirements implemented in slices vs. layers  User needs with higher business value are done first  Reduces cost & risk while increasing business success 13Shore, J. (2011). Evolutionary design illustrated. Norwegian Developers Conference, Oslo, Norway. Agile Traditional 1 2 3 Faster  Early ROI  Lower Costs  Fewer Defects  Manageable Risk  Better Performance  Smaller Attack Surface Late  No Value  Cost Overruns  Very Poor Quality  Uncontrollable Risk  Slowest Performance  More Security Incidents  Seven Wastes 1. Rework 2. Motion 3. Waiting 4. Inventory 5. Transportation 6. Overprocessing 7. Overproduction MINIMIZES MAXIMIZES  JIT, Just-enough architecture  Early, in-process system V&V  Fast continuous improvement  Scalable to systems of systems  Maximizes successful outcomes  Myth of perfect architecture  Late big-bang integration tests  Year long improvement cycles  Breaks down on large projects  Undermines business success  Agile Methods—How they work?      
  • 14. 14 Traditional vs. Agile Cumulative Flow Work(Story,Point,Task)orEffort(Week,Day,Hour) Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.) Work(Story,Point,Task)orEffort(Week,Day,Hour) Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.) TRADITIONAL Cumulative Flow  Late big bang integration increases WIP backlog  Agile testing early and often reduces WIP backlog  Improves workflow and reduces WIP & lead times Anderson, D. J. (2004). Agile management for software engineering. Upper Saddle River, NJ: Pearson Education. Anderson, D. J. (2010). Kanban: Successful evolutionary change for your technology business. Sequim, WA: Blue Hole Press.  Agile Methods—Workflow Results   AGILE Cumulative Flow
  • 15. Models of AGILE DEVELOPMENT 15  Agile methods spunoff flexible manufacturing 1990s  Extreme Programming (XP) swept the globe by 2002  Today, over 90% of IT projects use Scrum/XP hybrid Use Cases Domain Model Object Oriented Iterative Dev. Risk Planning Info. Radiators Planning Poker Product Backlog Sprint Backlog 2-4 Week Spring Daily Standup Sprint Demo Feasibility Business Study Func. Iteration Design Iteration Implementation Testing Domain Model Feature List Object Oriented Iterative Dev. Code Inspection Testing Release Plans User Stories Pair Programmer Iterative Dev. Test First Dev. Onsite Customer Cockburn, A. (2002). Agile software development. Boston, MA: Addison-Wesley. Schwaber, K., & Beedle, M. (2001). Agile software development with scrum. Upper Saddle River, NJ: Prentice-Hall. Stapleton, J. (1997). DSDM: A framework for business centered development. Harlow, England: Addison-Wesley. Palmer, S. R., & Felsing, J. M. (2002). A practical guide to feature driven development. Upper Saddle River, NJ: Prentice-Hall. Beck, K. (2000). Extreme programming explained: Embrace change. Reading, MA: Addison-Wesley. CRYSTAL METHODS - 1991 - SCRUM - 1993 - DSDM - 1993 - FDD - 1997 - XP - 1998 - Reflection W/S Retrospective Quality Control Quality Control Continuous Del. 
  • 16. 16  Numerous models of lean development emerging  Based on principles of lean thinking & just-in-time  Include software, project, & product management Poppendieck, M., & Poppendieck, T. (2003). Lean software development: An agile toolkit for software development managers. Boston, MA: Addison Wesley. Reinertsen, D. G. (2009). The principles of product development flow: Second generation lean product development. New York, NY: Celeritas. Anderson, D. J. (2010). Kanban: Successful evolutionary change for your technology business. Sequim, WA: Blue Hole Press. Olsen, D. (2015). The lean product playbook: How to innovate with minimum viable products and rapid customer feedback. Hoboken, NJ: John Wiley & Sons. Humble, J., Molesky, J., & O'Reilly, B. (2015). Lean enterprise: How high performance organizations innovate at scale. Sebastopol, CA: O'Reilly Media. LEAN SOFTWARE - 2003 - LEAN PRINCIPLES - 2009 - LEAN KANBAN - 2010 - LEAN PRODUCTS - 2015 - LEAN ENTERPRISES - 2015 -  Create Value  Eliminate Waste  Amplify Learning  Late Decisions  Deliver Fast  Empower Team  Build-in Integrity  See the Whole  Economic View  Manage Queues  Use Variability  Small Batches  WIP Constraints  Flow Control  Fast Feedback  Decentralize  Visualize  Limit WIP  Manage Flow  Use Policies  Quality Focus  Lead Times  Improvement  Reduce Variation  Target Customer  Market Needs  Market Value  Min. Viability  Prototype  User Experience  Market Testing  Improvement  Measure Risks  Uncertainty  Marketing  Improvement  Value & Flow  Lean Engineering  Experimentation  Bus. Alignment  Models of LEAN DEVELOPMENT
  • 17. 17  TDD - 2003 - CI - 2006 - BDD - 2008 - CD - 2011 - DEVOPS - 2012 - DEVOPSSEC - 2014 -  User Story  Acc Criteria  Dev Unit Test  Run Unit Test  Write SW Unit  Re-Run Unit Test  Refactor Unit  Building  Database  Inspections  Testing  Feedback  Documentation  Deployment  Analyze Feature  Acc Criteria  Dev Feat. Test  Run Feat. Test  Develop Feature  Re-Run Feature  Refactor Feat.  Packaging  Acceptance  Load Test  Performance  Pre-Production  Certification  Deployment  Sys Admin  Config. Mgt.  Host Builds  Virtualization  Containerization  Deployment  Monitor & Supp  Sec. Engineer.  Sec. Containers  Sec. Evaluation  Sec. Deploy.  Runtime Prot.  Sec. Monitoring  Response Mgt. Beck, K. (2003). Test-driven development: By example. Boston, MA: Addison-Wesley. Duvall, P., Matyas, S., & Glover, A. (2006). Continuous integration. Boston, MA: Addison-Wesley. Barker, K., & Humphries, C. (2008). Foundations of rspec: Behavior driven development with ruby and rails. New York, NY: Apress. Humble, J., & Farley, D. (2011). Continuous delivery. Boston, MA: Pearson Education. Huttermann, M. (2012). Devops for developers: Integrate development and operations the agile way. New York, NY: Apress. Bird, J. (2016). Devopssec: Delivering secure software through continuous delivery. Sebastopol, CA: O'Reilly Media.  Numerous models of lean-agile testing emerging  Based on principles of lean & agile one piece flow  Include software, hardware, system, & port. testing Models of AGILE DELIVERY
  • 18. Models of AGILE PROJECT MGT. 18  Dozens of Agile project management models emerged  Many stem from principles of Extreme Programming  Vision, releases, & iterative development common Prioritization Feasibility Planning Tracking Reporting Review Visionate Speculate Innovate Re-Evaluate Disseminate Terminate Scoping Planning Feasibility Cyclical Dev. Checkpoint Review Envision Speculate Explore Iterate Launch Close Vision Roadmap Release Plan Sprint Plan Daily Scrum Retrospective Thomsett, R. (2002). Radical project management. Upper Saddle River, NJ: Prentice-Hall. DeCarlo, D. (2004). Extreme project management: Using leadership, principles, and tools to deliver value in the face of volatility. San Francisco, CA: Jossey-Bass. Wysocki, R.F. (2010). Adaptive project framework: Managing complexity in the face of uncertainty. Boston, MA: Pearson Education. Highsmith, J. A. (2010). Agile project management: Creating innovative products. Boston, MA: Pearson Education. Layton, M. C., & Maurer, R. (2011). Agile project management for dummies. Hoboken, NJ: Wiley Publishing. RADICAL - 2002 - EXTREME - 2004 - ADAPTIVE - 2010 - AGILE - 2010- SIMPLIFIED - 2011 - 
  • 19. 19  Numerous models of agile portfolio mgt. emerging  Based on lean-kanban, release planning, and Scrum  Include organization, program, & project management Schwaber, K. (2007). The enterprise and scrum. Redmond, WA: Microsoft Press. Leffingwell, D. (2007). Scaling software agility: Best practices for large enterprises. Boston, MA: Pearson Education. Larman, C., & Vodde, B. (2008). Scaling lean and agile development: Thinking and organizational tools for large-scale scrum. Boston, MA: Addison-Wesley. Ambler, S. W., & Lines, M. (2012). Disciplined agile delivery: A practitioner's guide to agile software delivery in the enterprise. Boston, MA: Pearson Education. Thompson, K. (2013). cPrime’s R.A.G.E. is unleashed: Agile leaders rejoice! Retrieved March 28, 2014, from http://www.cprime.com/tag/agile-governance Schwaber, K. (2015). The definitive guide to nexus: The exoskeleton of scaled scrum development. Lexington, MA: Scrum.Org  Models of AGILE PORTFOLIO MGT. ESCRUM - 2007 - SAFe - 2007 - LESS - 2007 - DAD - 2012 - RAGE - 2013 - SPS - 2015 - Product Mgt Program Mgt Project Mgt Process Mgt Business Mgt Market Mgt Strategic Mgt Portfolio Mgt Program Mgt Team Mgt Quality Mgt Delivery Mgt Business Mgt Portfolio Mgt Product Mgt Area Mgt Sprint Mgt Release Mgt Business Mgt Portfolio Mgt Inception Construction Iterations Transition Business Governance Portfolio Program Project Delivery Product Mgt Program Mgt Sprint Mgt Team Mgt. Integ Mgt. Release Mgt
  • 20. 20  Numerous theories of agile leadership have emerged  Many have to do with delegation and empowerment  Leaders have major roles in visioning and enabling AGILE - 2005 - EMPLOYEE - 2009 - RADICAL - 2010 - LEAN - 2010 - LEADERSHIP 3.0 - 2011 - Organic Teams Guiding Vision Transparency Light Touch Simple Rules Improvement Autonomy Alignment Transparency Purpose Mastery Improvement Self Org. Teams Communication Transparency Iterative Value Delight Clients Improvement Talented Teams Alignment Systems View Reliability Excellence Improvement Empowerment Alignment Motivation Scaling Competency Improvement Augustine, S. (2005). Managing agile projects. Upper Saddle River, NJ: Pearson Education. Pink, D. H. (2009). Drive: The surprising truth about what motivates us. New York, NY: Penguin Books. Denning, S. (2010). The leader’s guide to radical management: Reinventing the workplace for the 21st century. San Francisco, CA: John Wiley & Sons. Poppendieck, M, & Poppendieck, T. (2010). Leading lean software development: Results are not the point. Boston, MA: Pearson Education. Appelo, J. (2011). Management 3.0: Leading agile developers and developing agile leaders. Boston, MA: Pearson Education. Models of AGILE LEADERSHIP 
  • 21. 21 Work(Story,Point,Task)orEffort(Week,Day,Hour) Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.) Burndown Work(Story,Point,Task)orEffort(Week,Day,Hour) Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.) Cumulative Flow Work(Story,Point,Task)orEffort(Week,Day,Hour) Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.) Earned Value Management - EVM CPI SPI PPC APC Work(Story,Point,Task)orEffort(Week,Day,Hour) Time Unit (Roadmap, Release, Iteration, Month, Week, Day, Hour, etc.) Earned Business Value - EBV Agile Methods—Basic Metrics
  • 22. 22  Late big bang integration increases WIP backlog  Agile testing early and often reduces WIP backlog  CI/CD/DevOps lower WIP, Cycle Time, & Lead Time Nightingale, C. (2015). Seven lean metrics to improve flow. Franklin, TN: LeanKit.  KANBAN BOARD CUMULATIVE FLOW DIAGRAM LEAD TIME & CYCLE TIME PUTTING IT ALL TOGETHER Lean Methods—Basic Metrics
  • 23.  Agile methods are based on traditional measures  Story points, velocity, and burndown basic metrics  Experts use Agile EVM, test, ROI & portfolio metrics 23Rico, D. F., Sayani, H. H., & Sone, S. (2009). The business value of agile software methods. Ft. Lauderdale, FL: J. Ross Publishing. AGILE METRICS 1. Agile CODE Metrics 2. Agile PROJECT Metrics 3. Agile TRACKING Metrics 4. Agile TESTING Metrics 5. Agile VALUE Metrics 6. Agile HEALTH Metrics 7. Agile PORTFOLIO Metrics 1. Agile CODE Metrics  Code Size  Code Complexity  Object Oriented  Code Coverage  Code Defects  Relational Design 2. Agile PROJECT Metrics  Software Size  Software Productivity  Software Effort  Software Quality  Software Schedule  Software Success 3. Agile TRACKING Metrics  Story Points  Sprint Burndown  Release Burndown  Velocity  Feature Progress  Agile Earned Value 4. Agile TESTING Metrics  Test Coverage  Test Automation  Integration Builds  Running Tested Features  DevOps Automation  Deployment Frequency 7. Agile PORTFOLIO Metrics  Portfolio Kanban  Epic Progress  Portfolio Radar  Release Train Radar  Lean Portfolio Metrics  Enterprise Scorecard 6. Agile HEALTH Metrics  Teamwork Quality  Collaboration Quality  Agile Process Maturity  Agile Adoption Rate  Degree of Agility  Product Flexibility 5. Agile VALUE Metrics  Total Lifecycle Costs  Total Lifecycle Benefits  Benefit to Cost Ratio  Return on Investment  Net Present Value  Real Options Analysis Agile Methods—Metrics Taxonomy
  • 24.  Analysis of 23 agile vs. 7,500 traditional projects  Agile projects are 54% better than traditional ones  Agile has lower costs (61%) and fewer defects (93%) Mah, M. (2008). Measuring agile in the enterprise: Proceedings of the Agile 2008 Conference, Toronto, Canada. Project Cost in Millions $ 0.75 1.50 2.25 3.00 2.8 1.1 Before Agile After Agile 61% Lower Cost Total Staffing 18 11 Before Agile After Agile 39% Less Staff 5 10 15 20 Delivery Time in Months 5 10 15 20 18 13.5 Before Agile After Agile 24% Faster Cumulative Defects 625 1250 1875 2500 2270 381 Before Agile After Agile 93% Less Defects 24      Agile Methods—Costs & Benefits
  • 25.  Costs based on avg. productivity and quality  Productivity ranged from 4.7 to 5.9 LOC an hour  Costs were $588,202 and benefits were $3,930,631 25 Rico, D. F., Sayani, H. H., & Sone, S. (2009). The business value of agile software methods: Maximizing ROI with just-in-time processes and documentation. Ft. Lauderdale, FL: J. Ross Publishing. d1 = [ln(Benefits  Costs) + (Rate + 0.5  Risk2)  Years]  Risk   Years, d2 = d1  Risk   Years   5 1i  Agile Methods—Return on Invest.
  • 26. Activity Def CoQ DevOps Economics Hours ROI Development Operations 100 0.001 100 Defects x 70% Efficiency x 0.001 Hours 0.070 72,900% Continuous Delivery 30 0.01 30 Defects x 70% Efficiency x 0.01 Hours 0.210 24,300% Continuous Integration 9 0.1 9 Defects x 70% Efficiency x 0.1 Hours 0.630 8,100% Software Inspections 3 1 2.7 Defects x 70% Efficiency x 1 Hours 1.890 2,700% "Traditional" Testing 0.81 10 0.81 Defects x 70% Efficiency x 10 Hours 5.670 900% Manual Debugging 0.243 100 0.243 Defects x 70% Efficiency x 100 Hours 17.010 300% Operations & Maintenance 0.073 1,000 0.0729 Defects x 70% Efficiency x 1,000 Hours 51.030 n/a 26  Agile testing is orders-of-magnitude more efficient  Based on millions of automated tests run in seconds  One-touch auto-delivery to billions of global end-users Rico, D. F. (2016). Devops cost of quality (CoQ): Phase-based defect removal model. Retrieved May 10, 2016, from http://davidfrico.com   Under 4 Minutes 4,500 x Faster than Code Inspections Agile Methods—Cost of Quality
  • 27. 27  Hewlett-Packard is a major user of CI, CD, & DevOps  400 engineers developed 10 million LOC in 4 years  Major gains in testing, deployment, & innovation Gruver, G., Young, M. & Fulghum, P. (2013). A practical approach to large-scale agile development. Upper Saddle River, NJ: Pearson Education.  TYPE METRIC MANUAL DEVOPS MAJOR GAINS CYCLE TIME IMPROVEMENTS Build Time 40 Hours 3 Hours 13 x No. Builds 1-2 per Day 10-15 per Day 8 x Feedback 1 per Day 100 per Day 100 x Regression Testing 240 Hours 24 Hours 10 x DEVELOPMENT COST EFFORT DISTRIBUTION Integration 10% 2% 5 x Planning 20% 5% 4 x Porting 25% 15% 2 x Support 25% 5% 5 x Testing 15% 5% 3 x Innovation 5% 40% 8 x   Agile Methods—HP Case Study
  • 28.  Assembla went from 2 to 45 releases every month  15K Google developers run 120 million tests per day  30K+ Amazon developers deliver 136K releases a day 28Singleton, A. (2014). Unblock: A guide to the new continuous agile. Needham, MA: Assembla, Inc. 62 x Faster U.S. DoD IT Project 3,645 x Faster U.S. DoD IT Project    Agile Methods—Dot Com Cases
  • 29. 29Ashman, D. (2014). Blackboard: Keep your head in the clouds. Proceedings of the 2014 Enterprise DevOps Summit, San Francisco, California, USA.  Productivity STOPS due to excessive integration  Implements DevOps & Microservices around 2010  Waste elimination, productivity & innovation skyrocket DEVOPS & MICROSERVICES IMPLEMENTED Agile Methods—Blackboard Case
  • 30. 30Denayer, L. (2017). U.S. DHS citizenship and immigration services: USCIS agile development. Washington, DC. iSDLC Seminar.  1st gen replete with large portfolios & governance  2nd-3rd gen yield minor incremental improvements  4th-5th gen enables big order-of-magnitude impacts           Automated GovernanceManual Governance   Agile Methods—U.S. DHS Case
  • 31. 31  Detailed DevOps economics starting to emerge  ROI ranges from $17M to $195M with minor costs  Benefits from cost savings, revenue, and availability Forsgren, N., Humble, J., & Kim, G. (2017). Forecasting the value of devops transformations: Measuring roi of devops. Portland, OR: DevOps Research. Rico, D. F. (2017). Devops return on investment (ROI) calculator. Retrieved August 29, 2017, from http://davidfrico.com/devops-roi.xls  Agile Methods—Enterprise ROI
  • 32.  Traditional projects succeed at 50% industry avg.  Traditional projects are challenged 20% more often  Agile projects succeed 3x more and fail 3x less often Standish Group. (2012). Chaos manifesto. Boston, MA: Author. 32 Agile Traditional Success 42% Failed 9% Challenged 49% Success 14% Failed 29% Challenged 57%  Agile Methods—Success Rate
  • 33. Hoque, F., et al. (2007). Business technology convergence. The role of business technology convergence in innovation and adaptability and its effect on financial performance. Stamford, CT: BTM Institute. 33  Study of 15 agile vs. non-agile Fortune 500 firms  Based on models to measure organizational agility  Agile firms out perform non agile firms by up to 36% Agile Methods—Business Benefits
  • 34. Suhy, S. (2014). Has the U.S. government moved to agile without telling anyone? Retrieved April 24, 2015, from http://agileingov.com Porter, M. E., & Schwab, K. (2008). The global competitiveness report: 2008 to 2009. Geneva, Switzerland: World Economic Forum. 34  U.S. gov’t agile jobs grew by 13,000% from 2006-2013  Adoption is higher in U.S. DoD than Civilian Agencies  GDP of countries with high adoption rates is greater High Low Low HighAGILITY COMPETITIVENESS GOVERNMENT AGILE JOB GROWTH PERCENTAGE 13,000% 0 2006 2013YEARS GOVERNMENT COMPETITIVENESS Agile Methods—National Benefits
  • 35. 35Holler, R. (2015). Ninth annual state of agile survey: State of agile development. Atlanta, GA: VersionOne.  VersionOne found 94% using agile methods today  Most are using Scrum with several key XP practices  Lean-Kanban is a rising practice with a 31% adoption   Continuous Integration ● ● ● ● ● ● ● ● ● ● ●  ●  ● Agile Methods—Adoption Statistics
  • 36.   Scrum Alliance. (2013). Scrum certification statistics. Retrieved April 28, 2015, from http://www.scrumalliance.org Taft, D. K. (2012). Agile developers needed: Demand outpaces supply. Foster City, CA: eWeek. 36  Number of CSMs have doubled to 400,000 in 4 years  558,918 agile jobs for only 121,876 qualified people  4.59 jobs available for every agile candidate (5:1)  Projected Projected * PMI-PMPs grew from 552,977 to 625,346 in 2014 (i.e., added 72,369) Agile Methods—National Adoption
  • 37.  Agile methods DON’T mean deliver it now & fix it later  Lightweight, yet disciplined approach to development  Reduced cost, risk, & waste while improving quality 37 Rico, D. F. (2012). What’s really happening in agile methods: Its principles revisited? Retrieved June 6, 2012, from http://davidfrico.com/agile-principles.pdf Rico, D. F. (2012). The promises and pitfalls of agile methods. Retrieved February 6, 2013 from, http://davidfrico.com/agile-pros-cons.pdf Rico, D. F. (2012). How do lean & agile intersect? Retrieved February 6, 2013, from http://davidfrico.com/agile-concept-model-3.pdf What How Result Flexibility Use lightweight, yet disciplined processes and artifacts Low work-in-process Customer Involve customers early and often throughout development Early feedback Prioritize Identify highest-priority, value-adding business needs Focus resources Descope Descope complex programs by an order of magnitude Simplify problem Decompose Divide the remaining scope into smaller batches Manageable pieces Iterate Implement pieces one at a time over long periods of time Diffuse risk Leanness Architect and design the system one iteration at a time JIT waste-free design Swarm Implement each component in small cross-functional teams Knowledge transfer Collaborate Use frequent informal communications as often as possible Efficient data transfer Test Early Incrementally test each component as it is developed Early verification Test Often Perform system-level regression testing every few minutes Early validation Adapt Frequently identify optimal process and product solutions Improve performance                  Agile Methods—Summary
  • 39.  Guides to software methods for business leaders  Communicates the business value of IT approaches  Rosetta stones to unlocking ROI of software methods  http://davidfrico.com/agile-book.htm (Description)  http://davidfrico.com/roi-book.htm (Description) 39  Agile Methods—ROI Resources
  • 40. Dave’s PROFESSIONAL CAPABILITIES 40 Software Quality Mgt. Technical Project Mgt. Software Development Methods Leadership & Org. Change Cost Estimates & Scheduling Acquisition & Contracting Portfolio & Program Mgt. Strategy & Roadmapping Lean, Kanban, & Six Sigma Modeling & Simulations Big Data, Cloud, NoSQL Workflow Automation Metrics, Models, & SPC BPR, IDEF0, & DoDAF DoD 5000, TRA, & SRA PSP, TSP, & Code Reviews CMMI & ISO 9001 Innovation Management Statistics, CFA, EFA, & SEM Evolutionary Design Systems Engineering Valuation — Cost-Benefit Analysis, B/CR, ROI, NPV, BEP, Real Options, etc. Lean-Agile — Scrum, SAFe, Continuous Integration & Delivery, DevOpsSec, etc. STRENGTHS – Communicating Complex Ideas • Brownbags & Webinars • Datasheets & Whitepapers • Reviews & Audits • Comparisons & Tradeoffs • Brainstorming & Ideation • Data Mining & Business Cases • Metrics & Models • Tiger Teams & Shortfuse Tasks • Strategy, Roadmaps, & Plans • Concept Frameworks & Multi-Attribute Models • Etc. ● Data mining. Metrics, benchmarks, & performance. ● Simplification. Refactoring, refinement, & streamlining. ● Assessments. Audits, reviews, appraisals, & risk analysis. ● Coaching. Diagnosing, debugging, & restarting stalled projects. ● Business cases. Cost, benefit, & return-on-investment (ROI) analysis. ● Communications. Executive summaries, white papers, & lightning talks. ● Strategy & tactics. Program, project, task, & activity scoping, charters, & plans. PMP, CSEP, FCP, FCT, ACP, CSM, SAFE, & DEVOPS 35+ YEARS IN IT INDUSTRY