Agile Software Development Agreements: Navigating the...

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Presenting a live 90-minute webinar with interactive Q&A

Agile Software Development Agreements:

Navigating the Complex Contracting Issues Evaluating Agile vs. Waterfall Development; Structuring Provisions

on Pricing, Project Plan, Warranties and More

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

WEDNESDAY, APRIL 5, 2017

Paul H. Arne, Partner, Morris Manning & Martin, Atlanta

Anne M. Friedman, Of Counsel, DLA Piper, Los Angeles

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Strafford Webinars

Drafting Agile Software

Development Agreements:

Guidance for Corporate and

Technology Counsel

Wednesday, April 5, 2017

PRESENTERS

Paul H. Arne, Partner, Morris, Manning & Martin LLP, Atlanta:

http://www.mmmlaw.com/our-people/employee-

directory/attorneys/paul-h.-arne

[email protected]

Anne Friedman, Counsel, DLA Piper, Los Angeles:

https://www.dlapiper.com/en/us/people/f/friedman-anne-m/

[email protected]

5 April 2017 Contracting for Agile - Update 6

http://www.mmmlaw.com/our-people/employee-directory/attorneys/paul-h.-arne














Agenda

What is Agile?

Agile vs Waterfall

Agile Methodologies

Practical Customer Insights on Agile

Agile Contract Forms and Features

Challenges on Drafting Agile Contracts

Best Balance for Agile and Managing Risk


Traditional: Waterfall Development

Gather requirements

Design

Build

Test

Implement


Success?

0%

10%

20%

30%

40%

50%

60%

Successful Challenged Failed

26%

59%

15%


Why So Bad?

52% of the time:

Lack of user input

Incomplete requirements and specifications

Unrealistic expectations

Unclear objectives

Changing requirements

New technology


What is Agile?

Agile software development is

a group of software development methodologies

based on iterative and incremental development

where requirements and solutions evolve through

self- organizing, cross-functional teams

Examples of agile software development methodologies

Scrum

eXtreme Programming (XP)

DSDM

Usability/Feature Driven Development (UDD/FDD)

Contracting for Agile - Update 11 5 April 2017

The Agile Manifesto

Manifesto for Agile Software Development

We are uncovering better ways of developing software by doing it and

helping others do it. Through this work we have come to value:

Individuals and interactions over processes and tools

Working software over comprehensive documentation

Customer collaboration over contract negotiation

Responding to change over following a plan

That is, while there is value in the items on the right, we value the items

on the left more.

Kent Beck, Mike Beedle, Arie van Bennekum, Alistair Cockburn, Ward Cunningham, Martin Fowler, James Grenning,

Jim Highsmith, Andrew Hunt, Ron Jeffries, Jon Kern, Brian Marick, Robert C. Martin, Steve Mellor, Ken Schwaber, Jeff

Sutherland, Dave Thomas

© 2001, the above authors. This declaration may be freely copied in any form, but only in its entirety through this notice.

Contracting for Agile - Update 12 5 April 2017

Enter Agile

Embrace Change

Requirements can change at any time

Scope not finalized at front end

Timing?

Cost?


Agile and SaaS

Reduce risk of code change

Quicker response to user and market needs

Testing is easier (one infrastructure)

Makes training an ongoing process, in small increments

Error corrections are easier


Success Rates

0%

10%

20%

30%

40%

50%

60%

Successful Challenged Failed

43% 45%

12%

26%

59%

15%

Agile

Waterfall


Development Agreement for Agile

Normal Software Development Agreement (risky)

Plus:

Scope: uncertain

Timing: uncertain

Cost: uncertain

Attitude — We prefer:

“Customer collaboration over contract negotiation”

23 November 2015 Contracting for Agile - Update 16

Characteristics and Drivers

Core Characteristics

High level statement of product vision

Summary of software functionality in non-static User Stories

Iterative development process

Short cycles for analysis of requirements, design, implementation

and testing

Ongoing involvement of customer in development process

Rapid code reviews

Limited project documentation by services provider

Drivers

Commercial

Technical


Waterfall & Agile Compared

QA1 QA2 QA3 QA4

5 April 2017 Contracting for Agile - Update

Design

Build

Test

Deploy

Features

Features

Features

Features

Deploy

18

Scrum Methodology – User Stories

As a [role]

I want that [feature]

so that [benefit]

23 November 2015 Contracting for Agile - Update

As a brand manager, I want the

ability to be able to view our

company's twitter stream

directly within Microsoft

Outlook so that I can readily

identify any bad publicity

19

Scrum Methodology – key characters

Product Owner

Controls the Product Backlog

Identifies which User Stories

are retained and which are

discarded

Prioritizes User Stories

Scrum Master

Manages the development

team

Monitors progress using a

Burn Down Chart

Project Manager in disguise!


Scrum Methodology – Release

Backlog


Release Backlog

1 Day 4 hours

3 Days 2 hours

3 Days

8 Days

4 hours 4 hours

5 Days

Estimated Work Effort = 22 days

21

Scrum Methodology - Sprints


SPRINT 1 SPRINT 2 SPRINT 3

22

Scrum Methodology – Monitoring

End of each Sprint

Ship-ready

functionality tested

time estimate exceeded = project likely to overrun


LATE!

On Time

23

Scrum Methodology – Daily Scrum

Every morning and chaired by Scrum

Master

15 minutes only

Don't get comfortable!

What's been done since last meeting

Obstacles encountered

Solutions to overcome each obstacle

Sprint Retrospective at the end of

each Sprint to identify how to

improve process


Development Agreement for Agile

Normal Software Development Agreement (risky)

Plus:

Scope: uncertain

Timing: uncertain

Cost: uncertain

Attitude — We prefer:

“Customer collaboration over contract negotiation”


Agile Features for Risk Reduction

Personnel

Initial

Replacement

New

Governance

Reporting


Agile Features for Risk Reduction

Delivery of Working/Useable Code

“Our highest priority is to satisfy the customer through early and

continuous delivery of valuable software.”

Change Control

“Welcome changing requirements, even late in development.”

Participation

“Business people and developers must work together daily

throughout the project.”

Scope?

Time?

Cost?


Agile Contract Forms and Features

Danish KO3

Norwegian PS2000

Swedish IT and Telecoms Industry template

Practical Law Company

Flexible Contracts

DLA Piper template


Agile Contracts – One Size Does Not

Fit All

No single Agile “form” will meet all needs

Project Requirements vary greatly and the contract needs to

match the business needs and appropriately mitigate risk

Example: Short term four sprint project vs. three year large

scale development project – what are the differences?

Specificity of Scope

Knowledge of needs and hurdles

Cost management

Need for project success – and associated allocation of risk

Contract rights to exit the relationship

28 May 2014 Contracting for Agile - Update 29

Challenges on Contract Drafting

Preserving balance between flexibility and certainty

Agreement on scope

Description of process within project cycles

Allocation of duties and responsibilities – service provider's

responsibility for project success

Governance and level of customer resource commitment

Risk and liability

Agreement on quality and related responsibilities

Pricing arrangement – fixed price vs. T&M vs. other

Consequences of interim acceptance

Walk away scenarios – consequences on project investment


Best Balance?

Informed Risk/Benefit Analysis at outset

Flexible RFP and Business Case documentation

Early supplier engagement and embedding of teams

Objectives clearly stated in preamble

Closer attention to governance, process schedules

Consider limited controls

Contracted Minimum Viable Product

Capped Costs for stages or overall MVP

Project Longstop Date

Technical design should ensure working product at each stage


Agile Software Development Agreements: Navigating the...

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