Agile Software Development Agreements: Navigating the Complex Contracting Issues

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Agile Software Development Agreements: Navigating the Complex Contracting Issues Evaluating Agile vs. Waterfall Development; Structuring Provisions on Pricing, Project Plan, Warranties and More WEDNESDAY, APRIL 5, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Paul H. Arne, Partner, Morris Manning & Martin, Atlanta Anne M. Friedman, Of Counsel, DLA Piper, Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Strafford Webinars Drafting Agile Software Development Agreements: Guidance for Corporate and Technology Counsel Wednesday, April 5, 2017

6 PRESENTERS Paul H. Arne, Partner, Morris, Manning & Martin LLP, Atlanta: Anne Friedman, Counsel, DLA Piper, Los Angeles: Contracting for Agile - Update 5 April

7 Agenda What is Agile? Agile vs Waterfall Agile Methodologies Practical Customer Insights on Agile Agile Contract Forms and Features Challenges on Drafting Agile Contracts Best Balance for Agile and Managing Risk Contracting for Agile - Update 5 April

8 Traditional: Waterfall Development Gather requirements Design Build Test Implement Contracting for Agile - Update 5 April

9 Success? 59% 60% 50% 40% 30% 20% 26% 15% 10% 0% Successful Challenged Failed Contracting for Agile - Update 5 April

10 Why So Bad? 52% of the time: Lack of user input Incomplete requirements and specifications Unrealistic expectations Unclear objectives Changing requirements New technology Contracting for Agile - Update 5 April

11 What is Agile? Agile software development is a group of software development methodologies based on iterative and incremental development where requirements and solutions evolve through self- organizing, cross-functional teams Examples of agile software development methodologies Scrum extreme Programming (XP) DSDM Usability/Feature Driven Development (UDD/FDD) Contracting for Agile - Update 5 April

12 The Agile Manifesto Manifesto for Agile Software Development We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value: Individuals and interactions over processes and tools Working software over comprehensive documentation Customer collaboration over contract negotiation Responding to change over following a plan That is, while there is value in the items on the right, we value the items on the left more. Kent Beck, Mike Beedle, Arie van Bennekum, Alistair Cockburn, Ward Cunningham, Martin Fowler, James Grenning, Jim Highsmith, Andrew Hunt, Ron Jeffries, Jon Kern, Brian Marick, Robert C. Martin, Steve Mellor, Ken Schwaber, Jeff Sutherland, Dave Thomas 2001, the above authors. This declaration may be freely copied in any form, but only in its entirety through this notice. Contracting for Agile - Update 5 April

13 Enter Agile Embrace Change Requirements can change at any time Scope not finalized at front end Timing? Cost? Contracting for Agile - Update 5 April

14 Agile and SaaS Reduce risk of code change Quicker response to user and market needs Testing is easier (one infrastructure) Makes training an ongoing process, in small increments Error corrections are easier Contracting for Agile - Update 5 April

15 Success Rates 60% 59% 50% 43% 45% 40% 30% 26% Agile Waterfall 20% 15% 12% 10% 0% Successful Challenged Failed Contracting for Agile - Update 5 April

16 Development Agreement for Agile Normal Software Development Agreement (risky) Plus: Scope: uncertain Timing: uncertain Cost: uncertain Attitude We prefer: Customer collaboration over contract negotiation Contracting for Agile - Update 23 November

17 Characteristics and Drivers Core Characteristics High level statement of product vision Summary of software functionality in non-static User Stories Iterative development process Short cycles for analysis of requirements, design, implementation and testing Ongoing involvement of customer in development process Rapid code reviews Limited project documentation by services provider Drivers Commercial Technical Contracting for Agile - Update 5 April

18 Waterfall & Agile Compared Design Build Test Deploy Features Features Features Features Deploy QA1 QA2 QA3 QA4 Contracting for Agile - Update 5 April

19 Scrum Methodology User Stories As a [role] I want that [feature] so that [benefit] As a brand manager, I want the ability to be able to view our company's twitter stream directly within Microsoft Outlook so that I can readily identify any bad publicity Contracting for Agile - Update 23 November

20 Scrum Methodology key characters Product Owner Controls the Product Backlog Identifies which User Stories are retained and which are discarded Prioritizes User Stories Scrum Master Manages the development team Monitors progress using a Burn Down Chart Project Manager in disguise! Contracting for Agile - Update 23 November

21 Scrum Methodology Release Backlog Release Backlog 1 Day 4 hours 5 Days 2 hours 8 Days 3 Days 4 hours 3 Days 4 hours Estimated Work Effort = 22 days Contracting for Agile - Update 23 November

22 Scrum Methodology - Sprints SPRINT 1 SPRINT 2 SPRINT 3 Contracting for Agile - Update 23 November

23 Scrum Methodology Monitoring End of each Sprint Ship-ready functionality tested time estimate exceeded = project likely to overrun On Time LATE! Contracting for Agile - Update 23 November

24 Scrum Methodology Daily Scrum Every morning and chaired by Scrum Master 15 minutes only Don't get comfortable! What's been done since last meeting Obstacles encountered Solutions to overcome each obstacle Sprint Retrospective at the end of each Sprint to identify how to improve process Contracting for Agile - Update 23 November

25 Development Agreement for Agile Normal Software Development Agreement (risky) Plus: Scope: uncertain Timing: uncertain Cost: uncertain Attitude We prefer: Customer collaboration over contract negotiation Contracting for Agile - Update 5 April

26 Agile Features for Risk Reduction Personnel Initial Replacement New Governance Reporting Contracting for Agile - Update 23 November

27 Agile Features for Risk Reduction Delivery of Working/Useable Code Our highest priority is to satisfy the customer through early and continuous delivery of valuable software. Change Control Welcome changing requirements, even late in development. Participation Business people and developers must work together daily throughout the project. Scope? Time? Cost? Contracting for Agile - Update 23 November

28 Agile Contract Forms and Features Danish KO3 Norwegian PS2000 Swedish IT and Telecoms Industry template Practical Law Company Flexible Contracts DLA Piper template Contracting for Agile - Update 23 November

29 Agile Contracts One Size Does Not Fit All No single Agile form will meet all needs Project Requirements vary greatly and the contract needs to match the business needs and appropriately mitigate risk Example: Short term four sprint project vs. three year large scale development project what are the differences? Specificity of Scope Knowledge of needs and hurdles Cost management Need for project success and associated allocation of risk Contract rights to exit the relationship Contracting for Agile - Update 28 May

30 Challenges on Contract Drafting Preserving balance between flexibility and certainty Agreement on scope Description of process within project cycles Allocation of duties and responsibilities service provider's responsibility for project success Governance and level of customer resource commitment Risk and liability Agreement on quality and related responsibilities Pricing arrangement fixed price vs. T&M vs. other Consequences of interim acceptance Walk away scenarios consequences on project investment Contracting for Agile - Update 23 November

31 Best Balance? Informed Risk/Benefit Analysis at outset Flexible RFP and Business Case documentation Early supplier engagement and embedding of teams Objectives clearly stated in preamble Closer attention to governance, process schedules Consider limited controls Contracted Minimum Viable Product Capped Costs for stages or overall MVP Project Longstop Date Technical design should ensure working product at each stage Contracting for Agile - Update 23 November