A Scalable Approach to Agile Contracts by Dean Leffingwell

Transcription

1 A Scalable Approach to Agile Contracts by Dean Leffingwell Business Agility Institute May 30, /7/2018

2 Digital disruption is affecting every industry across the globe.

3 Lean-Agile development is the universally accepted solution to competing in today s adapt-or-die marketplace SAFe is the leading framework

4 But buyers and suppliers are both on the receiving end of problems caused by agile contracting challenges. Specs? No specs? WHAT?! Different ways of working between client and supplier?! Lack of trust Fixed price contracts, T&M WHAT?! Estimate. Don t estimate. WHAT?! Contested awards Fast feedback HOW? No way to measure value

5 Legacy contract models reflect the iron triangle

6 The entire range of contract types doesn t really help Firm fixed price Target price Cost plus Time and materials - Fixed specification - Fixed price and date - Changes with a fee - Risk to Supplier - Fixed specification - Fixed date - Target price - Negotiated profit for the Supplier above target price - Shared risk, shared economic opportunity - Target specification - Target date - Customer pays Supplier s cost plus profit margin - Risk mostly shifted to Customer - No complete specification - Price based on rate - Ends as specified by Customer - Risk shifted to Customer

7 Goals of a new approach Optimize the economic value for all parties in the short- and long-term Provide adaptive responses to new requirements Provide continuous visibility and objective evidence of program performance Provide a measured approach to investment that can vary over time and stop when sufficient value has been achieved Offer the supplier near-term confidence of funding and sufficient notice when funding winds up, down or stops Motivate all parties to build the best solution possible within agreed-to economic boundaries

8 Scaled Agile Managed Investment Contracts

9 0 Change the buying quantum Change the basic purchase quantum to an Agile Team Sprint Each team <10 individuals Cross-functional, self-organizing can define, build, and test value Fixed price for two week sprint Delivers value every two weeks Price: $x per feature team sprint

10 1 Pre-contract: define Agile rules and responsibilities Define expectations for PI1 and following Ramp up/ ramp down commitments Agree to responsibilities (see next page) Establish number of teams for PI1 Define Vision and Roadmap Commit to PI1

11 Agile contract responsibilities graphic if that s what it needs Customer responsibility Training in SAFe Commit to the contract model Define program mission Shared responsibilities Establish initial vision and roadmap Define fixed and variable solution intent Establish economic framework Establish responsibilities and contract boundaries Prioritize P1 planning backlog Determine MVP Commit to contract model Define preliminary scope and feasibility Establish resource availability Supplier responsibility Initial contract basis Contract award To PI 1 prep

12 PI1 Planning PI 2 Execute PI1 feasibility and scope Provision teams and contract roles Perform PI 1 planning Execute first PI Estimate program scope and timeline Update Vision and Backlog Solution Demo Customer decision: Increase, steady, decrease, stop? PI evaluation? Evaluate solution and metrics Provide feedback Participate in Inspect and Adapt Update Vision, Roadmap, Solution Intent, backlog System Demo

13 PI1 Planning PI PI 3 Execute the Program Execute each PI Measure progress biweekly via system demo PI System Demo is the major contract event Measure, evaluate, Inspect and Adapt Solution Demo Customer decision: Increase, steady, decrease, stop? PI evaluation? Evaluate solution and metrics Provide feedback Participate in Inspect and Adapt Update Vision, Roadmap, Solution Intent, backlog Increase, steady, ramp down? System Demo Commitment period

14 4 Wind down and maintenance Continue until diminishing economic returns Wind down per agreements Enter maintenance and support phase using same execution model Where possible, keep knowledge acquisition and value flowing (see scaledagileframework.com/leanbudgets

15 Questions? 1.15