Agile ITModernizing IT in Maryland

Transforming processes, procurement, and contracts to reap rewards of Next-Gen IT with Agile, DevOps, SaaS, and Cloud

Lou Estrada, Deputy CIOState of Maryland

Tom Fusting, CTODepartment of Human Resources

6/2/2016

Agenda

1. IT Methodology Legacy - Why Change

2. Agile SDLC - Scaled Agile Framework (SAFe)

3. Agile Budgeting - Value Stream Budgeting

4. Agile Procurement / Contracting - Adaptive Sourcing

26/2/2016

A Timeline of Project Management

1910’s•Gantt Chart

1950’s•“Project Management”

•Critical Path

•PERT

1960’s•DoD WBS

mandate•PMI established

1970’s•Brooks’ Law

•Waterfall

1980’s•TOC•Scrum

•CMM

•EVM

•PMBOK

1990’s•CHAOS report

•Critical Chain

2000’s - 2010’s•Agile•Enterprise Agile

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CHAOS Report

16% 11%

39%

53% 60%

52%

31% 29%

9%

0%

20%

40%

60%

80%

100%

1994 2015: Waterfall 2015: Agile

CHAOS Report Summary

Failed

Challenged

Successful

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Conclusion: Agile is delivering better results, but plenty of room for improvement.

Forrester Research of adopting Agile DevOps :

• Improved time to benefit by 69%• Reduced cost by 57%• Reduced effort by 62%• Reduced critical defects by

nearly 80%• Reduced overall defects

by more than 60%• Better schedules by 91% • Better productivity by 97% • Better satisfaction by 400% • Better ROI 470%

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The Problem is the Project!

• Narrow frame, fails to consider needs across the enterprise

• Projects end, but business does not

• O&M “phase” guarantees technical debt

• Large batch size increases risk, is slow to deliver value, delays learning, and stifles agility

• Heavy reliance on estimation and baseline plans, with re-baselining disconnected from actual change

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Business Misalignment

• Large, complex organization

• Delivers:

– Public safety, law, and order

– Education

– Human Services

– Transportation / Infrastructure

– Environmental Services

– Business Services

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Business Misalignment

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• One program in one department justifies an investment in a project

• Justification looks good, fund source looks good… approved

• Years later, the solution is outdated before it is even deployed

• The project is hailed as a success because it came in under exaggerated estimates

Business Misalignment

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• Other similar programs with the same needs are still using legacy systems

• Data remains silo’ed

• While it is easier to perform one interaction, users must wait for other programs anyway, and are no better off

• Non-IT leaders of complex IT projects

• Elevate all decisions up the chain

• Lock in requirements, pay for change

• Pass all risk to the vendor, demand perfection

• Develop to spec rather than outcomes

• Avoid “scope creep” actually needed by the business

• Delays throughout, crunch at the end

• Place too much value on sunk cost and fail to see opportunities in front of you

“There is nothing so useless as doing efficiently that which should not be done at all” – Peter Drucker

Project Failure Recipes

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People are already

doing their best;

the problems are with

the system.

—W. Edwards Deming

68 Percent of IT Projects Fail!

Let’s break this cycle and transform the systems together.

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PDCA: Plan-Do-Check-Act/Adjust

Time to Think Differently

• We need to adjust our thinking…

– from program-centered to customer-centered

– from single-track projects to enterprise initiatives

– from silos to shared services and deep integration

– from IT as an after-thought to IT as inseparable from the mission

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Federal CIO Initiative to Reform IT

• 25 Point Plan, Vivek Kundra– Cloud First– Agile– Open Source– Adaptive Contracts

• playbook.cio.gov• TechFAR

136/2/2016

Agenda

1. IT Methodology Legacy - Why Change

2. Agile SDLC - Scaled Agile Framework (SAFe)

3. Agile Budgeting - Value Stream Budgeting

4. Agile Procurement / Contracting - Adaptive Sourcing

176/2/2016

History of Software Development Life Cycles

18

1970 - The first formal description of the waterfall model is often cited as a 1970 article by Winston W. Royce

1970 1985

Early 90s - Lightweight software development methods evolve as a reaction against Heavyweight waterfall: Scrum, eXtremeProgramming (XP), Spiral, Crystal

1995

February 11-13, 2001, at Snowbird ski resort in Utah, seventeen people met to talk, ski, relax, and try to find common ground. What emerged was the Agile Software Development Manifesto.

2005

2001 - Maryland Adopts Waterfall SDLC. Result is Enterprise Budgeting system, MVA Drivers License, Chessie, MERP, HBX

2009 - 60% of IT Projects follow Agile

2015

2015 – 85% of IT Projects follow Agile

2015 –Maryland adopts Scaled Agile Framework (SAFe)!

1985, the United States Department of Defense captured this approach in DOD-STD-2167A

6/2/2016

A Stark Choice of Approaches

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4 444 :Documents Documents Unverified Code Software

Define Build Test Deploy

Measure of Progress and Milestones is working code, not documents.

Check-Adjust

MVP

Year 1 Year 2 Year 3 Year 4

2-Week Sprint Cycles

The Agile ManifestoA statement of values

Process and toolsIndividuals and interactions over

Following a planResponding to change over

Source: www.agilemanifesto.org

Comprehensive

documentationWorking software over

Contract negotiationCustomer collaboration over

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Agile Scrum Method Summary

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New Process, New Lexicon

• Project

• Earned Value Management

• Integrated Master Schedule (MS Project)

• Work Breakdown Structure

• Requirements FRD

• Gate reviews

• ITIL Change Management

• Value Stream

• Velocity, Program Predictability Measure,

Cycle Time

• Program Increments, Roadmap

• Agile Release Trains

• Backlog, Epics, Features, User stories

• Sprint Demos, System Demos, Sprint

Planning

• DevOps Automated

22

Legacy Agile

6/2/2016

Challenge CM: Move to DevOps

• Creates Barriers, Takes Weeks• Real time Policy Based

automated Governance236/2/2016

Apply Lean-Agile Principles

24

1. Take an economic view, understand Cost of Delay

2. Apply systems thinking

3. Assume variability; preserve options

4. Build incrementally with fast, integrated learning cycles

5. Base milestones on objective evaluation of working systems

6. Visualize and limit WIP, reduce batch sizes, and manage queue

lengths

7. Apply cadence, synchronize with cross-domain planning

8. Unlock the intrinsic motivation of knowledge workers

9. Decentralize decision-making

Leffingwell et al. © 2015 Scaled Agile, Inc. All Rights Reserved

6/2/2016

Proven

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The Levels

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The People

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The Backlogs

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The Cadence

Fast feedback:Team Demo, System Demo, and PI Demo

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Quality

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Relentless Improvement

“kaizen” - the art of practicing continuous improvement

with a sense of urgency and danger

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Value Delivery

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ECONOMIC PRIORITIZATION

WSJF - ignoring sunk costs,

understanding the cost-of-delay, and

decentralizing decision-making

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360⁰ Human Services

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Agenda

1. IT Methodology Legacy - Why Change

2. Agile SDLC - Scaled Agile Framework (SAFe)

3. Agile Budgeting - Value Stream Budgeting

4. Agile Procurement / Contracting - Adaptive Sourcing

466/2/2016

Fund Value Streams

• Is Education a Project?

• Projects start & end date? When will we finally be finished with funding education?!

• Are IT Systems projects?– the need is constantly evolving with continuous improvements?

• The fallacy of Design/Development/Implementation (DDI) and O&M Sustainment “Phase” budgeting approach creates our legacy of continuous growing Technical Debt.

47

Continuous flow, LOE adjusted based on backlog size6/2/2016

Waterfall Phases FY1 FY2 FY3 FY4 FY5

1M 1M 1M 1M 1M

1M 1M

3M

2M 5M

2M 20M 25M 10M

10M 15M 10M

5M 3M

16MTotal: Irregular spike budgets accumulate Technical Debt

2M 9M 36M 45M 40M

MITDP Waterfall Budgeting Alignment

4 444 :Documents Documents Unverified Code Software

Per system process with 5 years to receive value, tech debt accumulated486/2/2016

Scaled Agile Budgeting Alignment

Define Build Test Deploy

Multi System parallel continuous Value deployed, paying down Tech Debt.

Define Build Test Deploy

Check-Adjust

MVP

49

Agile Release Trains FY1 FY2 FY3 FY4 FY5

1M 2M 2M 2M 2M

1M 1M 1M 1M 1M

2M 4M 4M 4M 4M

2M 2M 2M 2M 2M

2M 2M 2M 2M 2M

2M 2M 2M 2M 2M

1M 4M 6M 6M 6MTotal: Smooth Level of Effort Budgets based on Epic Backlogs

11M 17M 19M 19M 19M

2-Week Sprint Cycles

6/2/2016

Portfolio Backlog, Budget LOE

• These epics have made it through the portfolio Kanban with go approval

• Low-cost holding pattern for upcoming implementation work

• Sizing estimates are in story points

• Avoid excess WIP, await implementation capacity

Bus. Epic3200

Bus. Epic2300

Arch. Epic5000

Bus. Epic3900

Arch. Epic1100

Bus. Epic3100

Po

rtfo

lio

B

ack

log

Backlog / Velocity => Capacity => LOE to Budget

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Portfolio Backlog holds epics approved for implementation

Transforming IT Budgeting

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Fund Delivery Capacities in Agile Release Trains , Not MITDP Projects!

Data Repository

Case Management

Cloud Infrastructure

Forecast from the Portfolio Backlog

Bus. Epic3200

Bus. Epic2300

Arch. Epic5000

Bus. Epic3900

Arch. Epic1000

Bus. Epic3100

PI 1 PI 2 PI 3

Portfolio Backlog

1200 pts/PI

1000

650

What if forecasting scenarios:

Given knowledge of epic sizes and ART velocities,

then applying prospective capacity (velocity)

allocations can help forecast

delivery milestones

ART1

ART2

ART3

Which trains can work on these, and what % of

their target ART capacity can be applied?

1

4

3

2

5

6

Capacity Allocation %

SAFe forecasting provides higher fidelity than prior methods

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Agenda

1. IT Methodology Legacy - Why Change

2. Agile SDLC - Scaled Agile Framework (SAFe)

3. Agile Budgeting - Value Stream Budgeting

4. Agile Procurement / Contracting - Adaptive Sourcing

536/2/2016

Current Contracting Practices Vs. Agile DevOps XaaS Cloud Contracts

Legacy Contracting Practice Thinking

• Change requirements/scope is bad

• Governance by Human approvals– Slow

• Exposure of “failures” discouraged

• Risk management - Highly structured methodology, 100s CDRLs to “control” risk

• Monitor and Manage - Gate reviews – Creates Starts and Stops, interrupts continuous flow

• Production is a static Firm Fixed Price (FFP) environment

Agile, DevOps, XaaS, Cloud Thinking

• Change is Strategic advantage, the CO is obsolete

• Governance by automated policies for entire bucket – Instant: more secure, improved QA & CM

• Fail early and learn/ adapt/ correct

• Risk management - via biweekly demo reviews, 10-week PI, transparency, automation, embedded program feedback loop, Incremental deployments

• Monitor and Manage - Continuous Velocity & value measures. Continuous Deploy & feedback, Greatest measure is Working Software

• Production is a dynamic auto-scaling, variable priced environment

Let the System Scale itself, … Let the Contract Allow it96/2/2016

Agile Contract Vehicle (Adaptive Sourcing)• Contract for Capabilities: Not projects, Not systems, Not Epics

• Procure agile teams staffed and managed by contractors (T&M)

• RFP does NOT predefined System Specs and Requirements.

• IDIQ Limited multi award: 5 – 10 companiesCapabilities of a team:• NoSQL Big Data Expertise• Security• Javascript Python, Angular, NodeJS• .Net, C#• devloperDevOps• AWS engineers• Domain SMEs• SaaS/COTS Vendors• Enterprise Systems Integration

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Agile Contract Vehicle (Adaptive Sourcing)• No Change Orders! Just

• Allocate Backlog to performing Agile teams

–dynamic volume up

• Wean non performing Agile Teams

–dynamic volume down• No Warranty Clauses needed

• Don’t push risk to contactors

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Agile Contract Vehicle (Adaptive Sourcing)

57

•No Intellectual Property Clause, All on Github Open Source

•Evaluate/award via Pilots, not long Proposal text

•Shared SLA, Positive incentives

•Follow SAFe

•Shared State Vehicle amongst several Value Streams, just adjust the volume as needed

Be the Systems Integrator following cross agency architecture patterns

6/2/2016

Transformation Outcome SummaryTraditional Methods

• Budgeting – Siloed program based, project based, SDLC Phases

– Siloed budgets creates siloed systems of differing platforms

• Contracts – Single Large SI, FFP, requirements based, change order wrestling, Dev and Ops separate contracts

• Governance – Program management EVM based progress tracking, waterfall gate reviews

Lean, Agile, Cloud enabling Methods

• Budgeting – “Value Stream” based, does not end

– WIP LOE based on size of collective backlog and velocity goals

• Contracts – multi award, T&M, capabilitiesbased, reward and penalty incentives based on value delivered, allocation from backlog, no stops, no Change orders, DevOps together

• Governance – SAFe based, Working SW as value measure, Weighted Shortest Job First (WSJF) collective prioritization

586/2/2016

Questions?

Recommended Reading

• The Goal– Theory of Constraints– Systems thinking– Throughput

• The Lean Startup– Innovation accounting– Validated learning– Entrepreneurship

• The Phoenix Project– IT business alignment– DevOps– Discipline & organization

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