Enlightened Agile Teams and Heathen VendorsMAKING AGILE WORK WITH OUTSOURCED DEVELOPMENT

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 Are We Here? MYTH: Agile cannot be adapted to manage or control vendors.

Let’s Frame the Problem

Start this project immediately! … The Boss

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!

A Quick Review - The Agile Manifesto

Agile: Iterating Solutions via Feedback

Nebulous Scope – on purpose Frequent reviews to maximize profitability/ROI, while minimizing costs Product markets move at ‘internet speed’

So…. Is There Anything We Do?

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”

Graduated Fixed Price Contracts

Incentivize early delivery and benefits realization

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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T&M

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

One Contract; Two Statements of Work

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

CardConversationConfirmation

Contracts are only Half the Battle…

Contracts

Teams

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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A Quick Summary - The Agile Manifesto

Questions?

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”