2. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
MEET YOUR NEIGHBOR
While we wait for the session to start:
• Chat with your neighbor
• Share your experience working on a
Firm Fixed Price project
• How long was the contract for?
• How much was it for?
• Did it finish on time? On Budget?
• What was the outcome/end result?
3. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
• Software Development
Practice Lead at Excella
Consulting
• Certified Scrum Trainer and
Agile Coach
• Founder of the DC Software
Craftsmanship User Group
• Co-organizer of the DC
Scrum User Group
Fadi Stephan
4. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Agile Manifesto
Individuals and interactions over Process and tools
Working software over Comprehensive documentation
Customer collaboration over Contract negotiation
Responding to change over Following a plan
5. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Does a well written
contract guarantee
success?
6. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Does a poorly
written contract
guarantee project
failure?
7. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Agile Manifesto
Individuals and interactions over Process and tools
Working software over Comprehensive documentation
Customer collaboration over Contract negotiation
Responding to change over Following a plan
8. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
I am not a lawyer
But I did stay at a Holiday
Inn Express
9. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Contracts
10. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
1. Set playing rules
2. Apportion risk
3. Help establish trust
11. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
If you are regularly
referencing the contact,
the project is already in
deep deep #$%*
12. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Iron Triangle
Plan
Driven
Scope
Cost Schedule
13. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Agile Triangle
Value
Driven
Value
Quality Constraints (Scope, Cost, Schedule)
http://jimhighsmith.com/beyond-scope-schedule-and-cost-the-agile-triangle/
14. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Agile Value Proposition
Risk
Visibility Adaptability
Business Value
Agile Development Traditional Development
https://www.versionone.com/agile-101/agile-software-development-benefits/
15. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Not Just About Development
Reqs
Design
Dev
QA
Release
Years!
Waterfall
16. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Not Just About Development
Reqs
Design
Dev
QA
Release
Years!
Agile Masquerade
Design
Dev
Design
Dev
17. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
- First and third of the Twelve Principles behind the Agile Manifesto
“Our highest priority is to satisfy the
customer through early and continuous
delivery of valuable software.”
“Deliver working software
frequently, from a couple of weeks to
a couple of months, with a preference
to the shorter timescale.”
18. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Days
Not
Months or years
REQUIREMENTS
DESIGN
DEVELOPMENTTEST
DEPLOY
19. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Contract Parts
20. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Purpose
21. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Delivery Cycle
22. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Price and Payment
Per story point
Per Hour
Per Iteration
Per Release
Per Month
23. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Acceptance
24. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Change Control
25. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Warranty and Liability
26. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Contact Types
27. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Firm Fixed Price
• Fixed scope
• Fixed price
• Fixed date
• Changes for an extra fee
• Risk to the supplier
• Relationship is competitive
28. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Time and Material
• Undetermined initial scope
• Price based on rate
• End date as determined by the client
• Changes to scope at anytime
• Risk to the client
• Relationship is indifferent or suspicious
29. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Capped T&M
• Same as Time and Material
• Cost ceiling limits client financial risk
• Relationship is cooperative
30. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Target Price
• Fixed scope
• Fixed date
• Target price
• Bonus (profit) paid to supplier if finished early
• Relationship is cooperative
31. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Money for Nothing
Change for Free
• Initial scope determined but reprioritized frequently
• Money for nothing refers to profit paid to supplier if enough
value is achieved before anticipated end date
• Changes for free as long as equal sized items are removed
• Relationship is cooperative
32. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Rolling Contracts
• Short term phased development
• Shippable product at the end of each phase
• Decision to continue or not at the end of each phase
• Changes incorporated into next phase
• Relationship is cooperative
33. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Paired Discussion
34. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Discuss
• What are the intentions
behind the clauses?
• What are some possible
unintended
consequences that may
have resulted from the
clauses?
35. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Scope Clause
Supplier will deliver
500 story point per
release for a total of
4000 story points
36. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Delivery Clause
Project consists of
6 releases of 8
sprints each
37. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Change Control
New or updates to completed
stories may be introduced as
long as existing stories of the
same size are removed or other
stories are reduced in size
38. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Impact of the
story sizing
clause?
39. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Pricing Clause
Invoiced monthly at
$500/story point for stories
delivered by supplier and
accepted by client product
owner
40. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Acceptance
Product owner will provide feedback
or acceptance on completed user
stories within 72 hours of the sprint
review at the end of each Sprint
based on story/acceptance criteria as
agreed upon in Sprint Planning
41. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Retrospective
Product Owner will
attend the team
retrospective at the
end of every Sprint
42. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Definition of Done
Code checked-in to version control
80% unit test code coverage
Deployed to dev environment
Other detailed DoD here….
43. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
A Different Contract
44. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Rolling Contracts
• 3 month contract with options for 6 3 months extensions
• Ceiling cap per release
• Short duration, capped price, variable scope
• Vision and high level goals
• No detailed requirements
45. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Results?
46. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
FAILURE!
47. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
On Time
Within Budget
Met Scope
48. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Did Not Meet
User Needs
49. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Fast and Early
Feedback
50. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
TRUST
51. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Updated
roadmap
52. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
First Example
53. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Recommendation
1. Don’t get fancy with the pricing unless you are dealing with a mature
organizations and an experienced vendor.
2. Vet the supplier. Try a day long coding challenge.
3. Vet the client. Do they truly have an Agile mindset.
4. Avoid long term firm fixed price contracts.
5. Transition to rolling contracts with early test periods.
6. Ensure that each phase ends with working software in production or
production like environment.
7. Include the ability to continue/end at the completion of each rolling phase.
8. Start small. Build transparency and trust and grow from there.
9. Specify vision instead of detailed scope.
10. Keep day to day management activities out of the contract.
54. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
Questions?
55. Agile Contracts – Doomed from the Start @fadistephan | @excellaco | excella.com
References
http://www.agilecontracts.com/
https://www.infoq.com/articles/agile-contracts
http://www.scruminc.com/wp-content/uploads/2014/06/Agile-Contracts.pdf
https://www.scrumalliance.org/resources/1119
https://github.com/usds/playbook/blob/gh-pages/_includes/techfar-online.md