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Return of Experience How to contract Agile development ? (French ROX) [email protected] @ldelvaux

Agile Wake Up #3 : la contractualisation Agile

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Page 1: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Return of Experience

How to contract Agile development ?

(French ROX)

[email protected] @ldelvaux

Page 2: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Laurent DELVAUXLiving in Paris2 children + a wife37 years old

Co-founder of Zenika (10yo-200p)

Still love Coding and Agile tooTry to spread Agile Contracts in France for 5 yearsAnd those days, working in Innovation

Page 3: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

1- State of the art of contracts and Agile compatibility (10 minutes)

2- What are the basic terms for a good Agile contract ? (30 minutes)

3- Q&A (10 minutes)

Page 4: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Quick Recap

What is Agile development ?

Page 5: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

CancelGift wrap

Return

Sprint2-4 weeks

Return

Sprint goal

Sprint backlog

Potentially shippableproduct increment

Productbacklog

CouponsGift wrapCoupons

Cancel

24 hours

Page 6: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Page 7: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

State of the Art

Types of contracts

Page 8: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

« Standard phrase in a contract for (…) product development in which the employer agrees to pay the contractor based on the time spent by the contractor's employees to do the work.

Generally used in projects in which it is not possible to accurately estimate the size of the project, or when it is expected that the project requirements would most likely change.Generally with a maximum amount fixed. »

https://en.wikipedia.org/wiki/Time_and_materials

Page 9: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Scope

TimeCost

Page 10: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

“Contracts where the payment amount does not depend on resources used or time expended. Used by military/government contractors to put the risk on the side of the vendor, and control costs. However, historically when used for innovative projects, it often fails.Continue to be popular despite a history of failed projects. Some laws prefer fixed-price contracts, but, many maintain that such contracts are actually the most expensive, especially when the risks or costs are unknown.”

https://en.wikipedia.org/wiki/Fixed-price_contract

Page 11: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Scope

TimeCost

Page 12: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Page 13: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

T&MContracts

Fixed-Price Contacts

AgileContracts

Able to stop and save money YES, perhaps NO YES

Able to change the scope/priority YES, perhaps NO YES

Penalty for … Client Provider Client & Provider

Able to have an intermediate

working productYES, perhaps NO YES

Select Providerbest Resources YES NO YES

Guaranty a way of working together NO YES YES

Risks are on … Client Provider Client & Provider

Page 14: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

How to create a such Agile Contract ?

« Si vis pacem, para bellum »(If you want peace, prepare for war)

Page 15: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

- Idea : Fair contract => risks sharing- Approach

- Strong commitment on each iteration. Well balanced penalty model

- Mirror clauses to split risks

- Impossible to describe everything- but compulsory to be much more detailed on

process than a T&M or Fixed Price contracts- Classic issues consequences know by all. Ex :

US not delivered, PO not enough available, project termination, …

In collaboration with

Page 16: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Scope

TimeCost

Clause 1

In the contract : Customer described the global vision/scope. Provider estimate Cost/Time based on today know Scope, that is certainly wrong/incomplete. We estimate it will take 10 iterations. And both sides already know that Scope will change.

Declaration of Intent

Page 17: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Scope

TimeCost

ProviderProvision a Strike

Force with a guaranteed way

of proceed

CustomerProvision a PO

who know Agile and respect

practises

Clause 2

In the contract : we will co-create your product together step by step, by Iterations with quick feedback cycle.

Page 18: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Scope

TimeCosts

Clause 3In the contract : for each Iteration, the client will do his best to provide INVEST US. Provider commit to a Scope/Cost and Time.

Change

Cost for a 3 weeks Iteration with 5 dev team = 45k€

Page 19: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

0 €

1 000 €

2 000 €

3 000 €

4 000 €

5 000 €

6 000 €

1 2 3 4 5 6 7 8

Cost variation

Régie

Forfait

zFactory

Daily Cost 600 €

Gradient / Slope(by contract) 0,6

Fixed cost 360 €Variable cost 240 €

Initial estimation 4 days

Real time spent T&M Fixed Bob Martin1 day 600 € 2 400 € 1 320 €2 days 1 200 € 2 400 € 1 680 €3 days 1 800 € 2 400 € 2 040 €4 days 2 400 € 2 400 € 2 400 €5 days 3 000 € 2 400 € 2 760 €6 days 3 600 € 2 400 € 3 120 €7 days 4 200 € 2 400 € 3 480 €8 days 4 800 € 2 400 € 3 840 €

Clause 3

Rule applied US by US

Page 20: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

- Usual clause in Client Contracts- “At any time, the Client can immediately

terminate the contract without any compensation for the Provider”

- Reciprocal attention version ? Unbelievable !- Simple and effective to find a better balanced

clause. Try to find the solution ?

Also called “mirror clauses”, this type of clauses help to align Client and Providercommon vision and mutual interest

Page 21: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

•Product owner•ScrumMaster•Team

Roles

•Sprint planning•Sprint review•Sprint retrospective•Daily scrum meeting

Ceremonies

•Product backlog•Sprint backlog•Burndown charts

Artifacts

Clauses

Page 22: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Teams are located in a unique place Ceremonies were held, decisions are

made and communicated PO not present during Sprint Planning, no

prioritization, no iterative acceptance tests Common issue : Retrospective removal to

« save time » No action plan or following of Retrospective No respect of the Sprint timebox to deliver

more US …

Clauses

Page 23: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Roles and responsibilities are known and respected Sprint Backlog modification during the Sprint Sprint Backlog fixed without dev team

commitment (ex : by planning poker) No anticipation no prioritization of next Sprints No management by the PO of the global cost and

scope (ex : no MVP) TIPS : if the PO brakes a rule, dev team switch to T&M until the next Sprint Planning ceremony

Clauses

Page 24: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

For each principle :+1 pts : if the contract helps to respect it0 pts : if it doesn’t help but doesn’t break it

-20 pts : if it breaks/prevent the principle

http://www.agilemanifesto.org/iso/he/principles.html

Hope you will get 12 pts

Page 25: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

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Ambition 2015 - 2017

The only acceptable dissatisfaction from the Client should be « the product is not moving fast enough » No surprise about Developed Feature No surprise about Remaining Time No surprise about Money spent No surprise about Quality provided

Page 27: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Conclusion

Page 28: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

• Not yet very frequent but trendy• Highly promoted by steering committees,

business and IT teams (>>> Innovation)• Slow down by buyers and jurists

• Change mind-set from « what i’m buying ? to reduce the cost » « why i’m buying ? to maximize the ROI of spent money »

• Difficult to make Buyers, Lawyers, Jurist, Business and Dev teams work together on building a contract that promote ROI

• It can take 6 months to 1 year… or fail

Page 29: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

• Each Agile Contract is Unique (per client)• Can’t be a simple copy/paste• An asset for Customer, enabling innovation• It must be a co-creation• Today, we even provide this co-creation as a

set of Services (trainings + consulting + lawyers), for Clients and even Providers (potentially our competitors)

Page 30: Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017

Q & A ?