Post on 29-Jul-2015
Today’s Presenter… Steve Nunziata
20+ Years Project Management Experience (PMP)
15+ Years of Agile Experience (CSM, PMI-ACP, SAFe SPC)
5+ Years of Agile Training Experience
Electronic Data Systems (EDS), Nike, adidas America, USAA
Co-Founder of the Alamo PMI Agile LIG & Alamo Agilistas
Speaker, Agile Development Conference East (Nov 2014)
Native of New Jersey; have also lived in Portland, Oregon
Bass Player extraordinaire…
Why Outsource Software Development?
Increase Speed to Market Improve Quality / ‘Best of Breed’ Reduce Costs “Just in Time” Resource Appropriation Foster Innovation …Can you think of others?
Identify Assess
RespondReview
Procurement The Decision is made to
move forward with procuring resources for part of the software development for the new product.
What contract options do are we offered?
Time & Materials Contracts Payment is based on actual time billed/ worked, plus cost of any associated materials necessary to complete the work.
Fixed Price / Fixed Price & Scope Contracts
Payment is not a factor of resources, or time expended. Fixed Price, or Fixed Price / Fixed Scope contracts work best when the scope of the work is well known and understood.
Question:
In your experience, what prevents Customers and Vendors from being able to work effectively?
Top ‘Concerns’ in Outsourcing Vendors insist on a traditional execution model; unconcerned about ‘Your Agile’ Procurement processes tend to be very formal and Waterfall-ish Lack of trust between Customers and Vendors Customers want risks shifted to the Vendors; Vendors don’t want to take on risks Vendors may hide critical information from Customers, whether good or bad Customers seek monetary penalties for non-conformance from Vendors Customers and Vendors don’t see work as being ‘done’ in the same way(s) Customers and Vendors just don’t speak the same language!
Agile: Iterating Solutions via Feedback
Nebulous Scope – on purpose Frequent reviews to maximize profitability/ROI, while minimizing costs Product markets move at ‘internet speed’
Agile with Vendors: Opportunities
1) Agile Contract Models to facilitate Agile outcomes
2) Team Practices to build relationships, trust, and sustainability
How Can I Succeed with Contracts in Agile?
“A good Agile contract establishes the framework for collaboration to occur during the project while providing appropriate levels of protection and risk mitigation for both the customer and the supplier [vendor], without having to resort to negotiation too frequently.”
Kent McDonald, “Create a Vendor Contract While Keeping Agile”
Money for Nothing / Change for Free
Hybrid FPFS model whereby:◦ The Customer may terminate the contract early; and
◦ The Customer may change Scope with no penalties.
One Statement of Work; Two Contracts
Hybridized T&M, FPFS Model
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Time & Materials contract for ‘Iteration 0’ type activities – developing Stories for the next Release Increment
Fixed Price contracts for execution Iterations to deliver the Release Increment
Fixed Price Contracts via Story Points
Define and Point a Backlog of work Vendor payment then based on ‘X’ Dollars per Story Point delivered (Working Software) Allows for flexibility in the work delivered
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What about People? Minimize vendor resource isolation as much as reasonable Embed outsourced resources on existing Agile teams; preferably, no more than 2 per team Ensure outsourced resources feel part of the team, and are responsible for achieving the same goal
Leverage Agile Ceremonies Opportunities to facilitate collaboration and team building in Agile: Daily Standups Pair Programming Iteration Planning Demonstrations Retrospective Others….?
Facilitation Tools Don’t forget to leverage technology! Webcams for participation in ceremonies ‘Open Line’ (speakerphone always on) Collaborative tools/software Instant Messenger Common Toolsets & Plans Bring them onsite if all else fails… What else?
Enabling Success with Vendors: 3 Steps
Contract for a process that leads to results
Focus on Vendor productivity and collaboration
Contract for short durations (release increment)
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Sources…o Gareth Richardson and Ian Spence, ‘Agile Outsourcing – Making it Work for Customers and Suppliers’. o Jens Coldewey, Senior Consultant, Cutter Consortium – ‘Contracting Agile Projects’o Kent McDonald, “Create a Vendor Contract While Keeping Agile” (May 2013)o Alex Adamopoulos, “Must Haves for Agile Contracts”o Nick Malik, “The Tyranny of Waterfall in RFP’s”