Adopting Agile in the OrganizationAl GoernerAgile Edge - UK

30 April 2009

Our Track Record as a Industry (circa 1978-2000)

IT Project Success & Failure

30%37%

22%

62% 47%

50%

9%16%

28%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

These statistics have been very stable for 30 years. And, they aren’t good.

Only in the last 7-8 years have they started to move in a more positive

direction. This movement is directly attributable to incremental, iterative,

collaborative, feedback-driven, business-value-focused methods.

2

Overrun & Underdeliver

230%

202%

239%

42%65% 74%

214%

182%178%

0%

50%

100%

150%

200%

250%

300%

Large Companies Medium Companies Small Companies

Schedule Overruns Budget Overruns Features Delivered

0%

Large Companies Medium Companies Small Companies

Cancelled Challenged Successful

Source: “The CHAOS Report”, Standish Group, 1994.

Out of every 100 projects, there will be 94 restarts!

Some projects are restarted several times.

The Impact of Agile-Lean TechniquesTop 10 Reasons for Success(2004 Chaos Report, Standish Group)

• User Involvement• Executive Mgmt Support• Clear Business Objectives• Optimizing Scope• Agile Process• Project Manager Expertise• Financial Management• Skilled Resources• Formal Methodology• Standard Tools & Infrastructure

2004 Chaos Report 1994 2004

Successful Projects 16% 29%

Challenged Projects 53% 53%

Failed Projects 31% 15%

Avg. Schedule Overrun +180% +56%

Avg. Budget Overrun +164% +84%

Source: “The CHAOS Report”, Standish Group, 2004.

3

• Standard Tools & Infrastructure

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

Agile Traditional

Source: “What is the ROI of Agile vs Traditional Methods?”, Dr. David F. Rico, based on 69 studies.

A Local Case Study: Valtech-IndiaAgile / Lean Adoption

Background Period: 2005-2008Team 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

Quantifying the Return

• 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) coachingand re-assignment (1 year later).

4

Beware: Faux-Agile!

Faux-AgileAdopting a few practices, but not understanding the principles.

Adopt too few practices that do not synergize with each other.

Naïve AgileAgile that works! … for small teams.

Agile that works! … in an isolated, insulated environment.

Agile-by-the-book, still emphasizing practices more than principles.Agile-by-the-book, still emphasizing practices more than principles.

Mature AgileAgile that works! … for small-medium and distributed teams.

Agile that works! … producing sustainable, verifiable results.

2nd-Generation Agile-LeanAgile-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.

Bottom Line

An Agile team in a non-agile

environmentenvironment

will not long survive.

Development Agility

& Business Agility

go Hand-in-Hand.

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.”“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!”

Legitimate Concerns of …

Business CustomerUsable solutions to real problems.

Responsiveness to changing needs and understanding.

Executive

Management

Line

Management

Business

Customer

Predictable, reliable results.

Schedule reliability amidst dependencies.

Team

Individual

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 …

• At higher quality …

BenefitBenefit BurdenBurden

• At higher quality …

• Reliably and sustainably …

• At the same or lower cost.

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.

Remember the Principle of Benefit & Burden!

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 oneknows 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.

Estimates – the Culture Shift

Understand the accuracy of estimates!Know the difference between estimates and commitments.

Insist on an estimation discipline, and train to that discipline.

Improve estimation accuracy through feedback about actuals.

4X

2X

1.5X

1.05X1.0X0.95X

0.67X

0.5X 0.8X

0.85X

0.95X1.0X1.05X

1.15X

1.25X

1.6X

Project Cost

(effort & size)Project

Schedule

Hi-Fidelity

Lo-Fidelity

No-Fidelity

through feedback about actuals.

Expect re-forecasts!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.

0.25X 0.6X

InceptionPhase

Assessment

Project

ProposalElaboration

Phase

Assessment

ConstructionPhase

Assessment

Legitimate Concerns of …

Line ManagementWhat resources to commit to which project, when.

Balancing too many priorities with too few resources.

Executive

Management

Line

Management

Business

Customer

How to get more with less, without breaking your people.

How to serve without being enslaved.

Team

Individual

Accountability – the Culture Shift

Concerns of Management:Progress:

• Is this project on-time?Is it healthy?

Quality:

• Is this release likely to be fit-for-release when it is ready-for-release?

4347

52

6163

6669

81

90

3840

4346 47 48 48

50 51

4038

4042

37 363837 36 37 36

3329

2430.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

ready-for-release?

Diagnostic:

• What can we do to get this project back on track?

Measure performance and manage by it!Only metrics – the right metrics – allow you to knowthe answers to these questions.

• When? Who? How much? Why? What if?

38 3734

31

363837 36 37 36

3330

26 27 28

36

2.55.25 5.75 4.75 5.25 4.75 3.75

13 1.5 3 3.5 3.5 4

0.5 0

0 0 0 0 0 0 0 0 0

2420

1511

61

0.0

10.0

20.0

30.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

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. 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.

Planning – the Culture Shift

The Plan is not the Product!Keep your eye on the prize.

“The plan is worthless. The planning is priceless.” - Eisenhower

Planning is risk management, too!

Planning may proceed forward or backward!

Prefer Checklists to Plans!

Don’t tell me what you plan to do;

tell me what you have done!

Planning may proceed forward or backward!

The 3+2 Dimensions of the “Triple Constraint”

Function Resource Schedule

[Risk]

[Depth]

Acme Project Reality MachineAcme Project Reality Machine

Legitimate Concerns of …

Executive ManagementHow to allocate budget to maximize ROI.

How to advance company strategic goals.

How to stay on the right

Executive

Management

Line

Management

Business

CustomerHow to stay on the right side of the law and the marketplace. Team

Individual

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

ROI “is the most

complex issue.”

- Capers Jones

9 Dimensions of Economic & Organizational ROIYes, These CAN and SHOULD be Measured

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

Governance – the Culture Shift

Governance should be aligned to the development process, not vice versa!

Project Governance

Financial Governance

Security GovernanceSecurity 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.

6 Missions of a Project Mgmt Office

Broaden and balance your PMO!

Enabling Change

Evangelism

Establishing Behaviors

Coaching &

Empowering Planning

Project EvangelismEnergy for Change

TrainingVocabulary for Change

Coaching & Mentoring

Shaping Behaviors

Owning Practices

Certifying Skillsets

Project Monitoring

Measuring Outcomes

Portfolio Management

Setting Goals

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!

As for the rest, …

Security, Legal-Risk-Compliance, & Technology-Architecture governance processes should be facilitative andconsultative, not juridical.

The issues that are important to thesegovernance groups must be articulatedif they are to be constructively complied with!

Finally, for you consideration:

the Zen of Agile AdoptionProblem in EvidenceProblem in Evidence

The symptoms and (eventually) causes are made visible and evident.The symptoms and (eventually) causes are made visible and evident.

Simple EleganceSimple EleganceA few simple elements and the rules of their combination and A few simple elements and the rules of their combination and interrelationship produce a rich behavior or set of possibilities.interrelationship produce a rich behavior or set of possibilities.

Balanced ReciprocityBalanced ReciprocityThe participants in the transformed system must all benefit from the The participants in the transformed system must all benefit from the transformation in proportion to their investment and participation.transformation in proportion to their investment and participation.

Evolved VocabularyEvolved VocabularyLanguage shapes Thought. Language shapes Thought. Thought shapes Values.Thought shapes Values. Values shape Behavior. Values shape Behavior. A new vocabulary must emerge and be differentiated from the old in order A new vocabulary must emerge and be differentiated from the old in order A new vocabulary must emerge and be differentiated from the old in order A new vocabulary must emerge and be differentiated from the old in order to ensure that Thought, Values and Behavior are in alignment.to ensure that Thought, Values and Behavior are in alignment.

Embodied MetaphorEmbodied MetaphorDon’t make the metaphor abstract too soon. Don’t take it Don’t make the metaphor abstract too soon. Don’t take it from our hands too soon, lest we abdicate of the responsibilityfrom our hands too soon, lest we abdicate of the responsibilityto own & master the metaphor to our tools.to own & master the metaphor to our tools.

Transformed ContextTransformed ContextIf only the affective levels of a system are modified, If only the affective levels of a system are modified, change will still not last. change will still not last. At least one contextual level At least one contextual level mustmust be mutated to establish the environment for success.be mutated to establish the environment for success.

Single VoiceSingle VoiceThe voice of the changeThe voice of the change--agent must be unified and consistent.agent must be unified and consistent.Otherwise, the voice of the client will be dissonant.Otherwise, the voice of the client will be dissonant.

Three Things to Do Now…

Thank you for attending!

Questions???

Contacts:

Jonathan CookBusiness Development, United Kingdom

jonathan.cooke@valtech.com+44 7748638031

Al GoernerPrincipal Emterprise Consultant

al.goerner@valtech.com+01 214 724 7240