Susan Atkinson gallenalliance Solicitors
CIPS Financial Services Purchasing Forum
London Wednesday 20th April 2011
CONTRACT MODELS FOR AGILE AND LEAN
THE BACKGROUND
A TREND TOWARDS AGILE AND LEAN
• US National Defense Authorization Act 2009
• UK Government has changed its IT strategy:
‘System Error: Fixing the Flaws in Government IT’ published by the Institute for Government (IfG), February 2011
‘Government ICT Strategy’ published by the Cabinet Office, March 2011
• The Project Management Institute (PMI) is currently developing an Agile certification
WHY AGILE AND LEAN?
• Traditional waterfall projects:
CHAOS Report, 2009: 44% projects were challenged and 24% projects failed
Standish Group Study, 2002: 64% of software features are typically never or rarely used
Schedule over-runs, cost over-runs, inflexibility
• Agile and lean projects:
VersionOne State of Agile Survey, 2010: An improvement or significant improvement in the ability to manage changing priorities (87% of respondents) and in the time to market (70% of respondents)
Shine Survey, 2003: Improved productivity (88% of organisations), improved quality (84% of organisations), and higher business satisfaction (83% of organisations)
THE ISSUE
THE NATURE OF SOFTWARE DEVELOPMENT
• Analogies with the construction industry and the manufacturing industry are flawed
• A problem-solving exercise, or the codification of knowledge, requiring information flow:
Information flow between the customer and the supplier leads to perceived integrity of design
Information flow between the various skill sets of the supplier leads to conceptual integrity of design
• A vision gradually refined by a process of decision-making
THE CONE OF UNCERTAINTY
Entry into contract
SCRUM ACKNOWLEDGES THAT ...
Regulatory environment
Competitive environment
Technology
Customer expectations
Corporate strategy
IKIWISI
‘Yes but’
Integration with legacy systems
Codifying knowledge & intelligence
The customer
DISCOVERS
what it wants
The vendor
DISCOVERS
how to build it
Many things
CHANGE
along the way
Multiple
stakeholders
• Visibility – those aspects of the process that affect the outcome must be visible to those controlling the process
• Inspection – frequent inspection to detect unacceptable variances in the process
• Adaptation - if the process moves outside acceptable limits, the process must be adapted to bring it back within acceptable limits
SCRUM - EMPIRICAL PROCESS CONTROL
• Split the work
• Split the time
• Split the organisation
HOW TO ACHIEVE EMPIRICAL PROCESS CONTROL
ITERATIVE AND INCREMENTAL DEVELOPMENT
ITERATION 1
REV I EW
R T’ IVE
DESIGN BUILD
TEST
ITERATION 2
P
L
A
N
REV I EW
RT’ IVE
DESIGN BUILD
TEST
ITERATION 3
P
L
A
N
REV I EW
RT’ IVE
DESIGN BUILD
TEST
PLAN
INCREMENTAL
DEVELOPMENT OF
SOFTWARE
Solution Backlog
• 7 +/- 2 members
• Self-organising and cross-functional
• Comprises members of the customer and vendor
• The product owner – from the customer - responsible for:
the solution backlog
communicating the wishes of all the stakeholders to the team
THE TEAM
BENEFITS OF AGILE AND LEAN
ITERATIVE DEVELOPMENT
SELF-ORGANISING TEAM
INCREMENTAL DEVELOPMENT
Increased feedback
Adaptive planning
Earlier delivery
Small packages of work
Fully working product
Continuous integration
Less work in progress
Knowledge creation
Flexibility
Less bottlenecks
Knowledge creation
Increases flow
Meets customer’s needs
Bugs identified at outset
Less waste
Faster delivery
Better design
Better ROI
Fewer features Less waste
Concurrent software development
More robust design
Early testing & validation
Points of synchronisation
Improves quality, productivity and morale
Fewer hand-offs
More value
More value
Less risk
More value
More value
Less risk
Less risk
Greater integration across teams
Faster delivery
Less risk
Better design
Less waste
More value
More value
More value
Less risk
THE SOLUTION THE EVOLUTIONARY CONTRACT MODEL
(ECM)
Debunking
the myths!
• Agile:
Scrum – Agile framework for project management
Extreme Programming (XP) – Agile software engineering practices
DSDM Atern – Agile project management ‘wrap’
Evolutionary Project Management (Evo) – Agile delivery of defined and measurable value
• Lean – the delivery of value more effectively by reducing cycle times and removing waste in the processes
• Systems thinking – delivery of an integral system
EVOLUTIONARY CONTRACT MODEL - INFLUENCES
• Delivery of the solution
• The solution evolves
No contractual requirements or specifications
No change control mechanism
No contractual acceptance tests
• Empirical process control
• Results-focused
EVOLUTIONARY CONTRACT MODEL – AN OVERVIEW
COMPARISON OF CONTRACT MODELS
The Traditional Contract Model The Evolutionary Contract Model
The requirements are specified upfront. The features of the solution evolve.
Changes 'controlled' by means of the change control mechanism.
Changes accommodated as part of the development process.
Analysis, design, development and testing occur sequentially.
Concurrent design and development.
An all-or-nothing solution.
The solution is broken down into features.
Constituent 'modules' of software are worked on independently until integration takes place.
A continuous working and stable software system.
Testing used as a contractual tool. Testing forms an integral part of the development process.
Success is measured by reference to conformance with the plans.
Success is measured by reference to completed solution increments.
EVOLUTIONARY CONTRACT MODEL - STRUCTURE
Start-Up Phase
Calibration Phase
Release 1 Release 2 Release 3
DELIVERY PHASE Framework
INITIAL PHASE Committed
Iterations
Co
ntractu
al gatep
ost
SOW SOW SOW
Entry in
to co
ntract
Release 4
Solution Backlog
SOW
• Vision Statement – the concept of the solution
• The Value Drivers – quantifiable measures of success
• The Roadmap – an approximate timetable for delivery of the solution having regard to various constraints
ENTRY INTO CONTRACT - KEY SCHEDULES
• The Business Case – expands upon the Vision Statement:
High level objectives of the solution;
outline of the solution backlog items (SBIs);
details of potential solutions;
estimates of costs and timeframes
• The High Level Release Plan – expands upon the Roadmap - segments the solution into smaller solution subsets that create value for the stakeholders
• The Solution Backlog – an evolving prioritised queue of all items of work which may be relevant to the solution
START-UP PHASE – KEY DELIVERABLES
• Includes all items of work relevant to the solution
• May not be a document
• Solution backlog items (SBIs) are prioritised
• Dynamic
• Evolves
• Must be within the scope of the contract
• The solution owner only controls the solution backlog
THE SOLUTION BACKLOG
THE EVOLUTION OF THE PLANS
Entry into Contract
End of Start-Up Phase
End of Calibration
Phase
Release Iteration
Vision Statement
Business Case
Solution Backlog
Iteration Backlog
Road Map High Level Release Plan
Release Plan Iteration Plan
Value Drivers
Charging Model
Calibration SOW Commitment
to Charges
• Framework under which Releases are initiated by SOWs
• The SOWs are contractually enforceable
• Release planning
• Release review – show the solution subset to the stakeholders to validate the solution
• Release retrospective – solution team inspects the process
THE DELIVERY PHASE
• Timeboxed – of fixed duration throughout the project
• Planning – which SBIs; decompose the SBIs into tasks to create the iteration backlog
• The SBIs – must not be changed during the iteration
• The iteration backlog - evolves and must be kept up-to-date at all times
• Review - show the solution increment to the stakeholders to validate the solution
• Retrospective - solution team inspects the process – use of metrics
• The solution increment – builds upon earlier iterations
THE ITERATIONS
• The lawyers!
• The procurement process
• Organisational impact
• Securing budgetary approval
• Involvement of the business function of the customer
• Proper implementation of Agile and Lean
CONTINUING CHALLENGES TO THE ADOPTION OF
THE EVOLUTIONARY CONTRACT MODEL
ANY QUESTIONS?
• Charging models?
• Estimating?
• Measures of delivery?
• Sequential vs. concurrent design & development
• Scaling up?
Susan Atkinson gallenalliance Solicitors
23 Austin Friars
London EC2N 2QP
United Kingdom
Tel: +44 20 7084 6392
Email: [email protected]
THANK YOU