HOW MUCH WILL THIS COST?Evan Leybourn

Evan Leybournlean / agile business leader and authorSingapore@eleybournhttp://theagiledirector.com

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“There are so many men who can figure costs, and so few who can measure value.” - Anonymous

“how much is this going to cost?”

“how long is this going to take?”

“what am I going to get?”

predictabilitythe fundamental flaw in software contracts

customer collaborationover contract negotiationwhile there is value in the items on the right ...

understand your workflow

A

Z

option 1: increase capacity

option 3: drop requirement

option 3: increase duration

customer trust

partnership

identification

contract

reference

time and materialsmost “agile” contract model, but linear growth

outcome-based contracts“power by the hour”

scope

scope

fixed costa fixed price quote prior to any work commencing

scope

an exampleprovide operational support and maintenance services

scopequotingidentify, and estimate, the approximate user stories in iteration 0

scopedeliveringreduce effort on technical debt and use short (1-2 week) iterations

scope

measuringvelocity and burn rate are your key indicators of cost

scope

fixed timedelivery is expected by a specific date

scope

an exampledesign and print new marketing material for a product launch

scope

estimatinguse historical velocity data to estimate the expected duration

scope

deliveringstrictly enforce timeboxes

scope

measuringtracking team and project velocity and/or cycle time

fixed scopefixed scope

a fixed set of requirements – sometimes know and heavy agile

fixed scopean example

deliver financial reports prior to the end of the financial year

fixed scopeplanning

focus on backlog definition and estimation during iteration 0

fixed scopedelivering

work in predefined, and agreed, backlog order

fixed scopemeasuring

acceptance of user stories

fixedscopefixed cost

& scopea fixed price quote for a pre-defined set of requirements

fixedscopean example

build and deliver a product to architectural specifications

fixedscopequoting &

planningduring planning, increase contingency (% or $) for the

unexpected

fixedscopedelivering

adjust delivery date in addition to fixed cost and fixed scope

fixedscopemeasuring

as per fixed cost and fixed scope

fixedscopefixed time

& scopea fixed set of requirements with final delivery due by an agreed date

fixedscopean example

recruitment of staff prior to a new project commencing

fixedscopeplanning &

estimatingpre-assign stories into iterations and allocate time to technical debt

fixedscopedelivering

if required, increase the team size prior to completion

fixedscopemeasuring

as per fixed time and fixed scope

scopefixed time & costa fixed price quote with an agreed delivery date – known as capped t&m

scope

an examplework on an agreed product until the end of the financial year

scopequoting &estimatingcalculate total cost as cost per cost per iteration

scopedeliveringupdate backlog as required in addition to fixed time and fixed cost

scope

measuringas per fixed time and fixed cost

fixedscopefixed time,

cost & scopeno flexibility in the project budget, schedule, or requirements

fixedscope

cancel the project

fixedscope

but...If you start with t&m...

release the lawyersmanaging exposure and risk

“What am I going to get?”

“Whatever you tell us you want.”

“How long is this going to take?”

“As long as is necessary.”

“How much is this going to cost?”

“As much as you’re willing to spend”

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To learn more, check out

Directing the Agile Organisationby Evan Leybourn

available at Amazon and all good book stores

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PS: #noprojectsconsistent and continuous, outcomes focused, change

customer trust

partnership

identification

contract

reference

Do Defer

Limit Avoid

Low Effort (5 minutes)High Effort (Ongoing)

Hig

h V

alu

eLow

Valu

eStatus Quo

To learn more, check out

Directing the Agile Organisationby Evan Leybourn

available at Amazon and all good book stores

CLICK TO DISCOVER MORE