Fixed Price Agile Projects

Jesse Fewell, PMP, CST

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010 Permission is granted to PMI for PMI® Marketplace use only

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2009 Permission is granted to PMI for PMI® Marketplace use only

PMI  Agile  Community  of  Practice  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Quick Facts Founded in 2009

“Equipping PMI members with agile skills and knowledge”

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“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2009 Permission is granted to PMI for PMI® Marketplace use only

Fixed  Price  Agile  Projects  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Jesse Fewell

Founder of PMI Agile Community of Practice

Senior Advisor, PMI-ACP℠ Agile Certification

Steering Committee, Software Extension to PMBOK® Guide

PMP with expert Agile Product & Project Certifications

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Setting Expectations

•  Will not cover agile frameworks •  Will not talk contracts [a different webinar]

Intermediate Level Talk

•  Simple suggestions. Difficult actions. •  There will be a MATH POP QUIZ

9 Techniques across 4 Scenarios

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Intro to Agile Values from agilemanifesto.org

over

over

over

over

Individuals & Interactions

Working Software

Customer Collaboration

Responding to Change

Processes & Tools

Comprehensive Documentation

Contract Negotiation

Following a Plan

That is, while there is value in the items on the right, we value the items on the left more.

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Intro to Agile Values from agilemanifesto.org

over Customer

Collaboration Contract

Negotiation

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Intro to Agile Values from agilemanifesto.org

over Responding to Change

Performing to Plan

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Agenda

Proposal Execution

Contract

• High  Level  • Value  Proposition  

• Enforces  Key  Risk  Areas  

• Achieves  Value  • Within  Risk  Constraints  

Time  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Proposal Execution

Contract

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

“An ounce of prevention is worth a pound of cure”

Proposal Execution

Contract

α

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

1. Have a “Definition of Done” before estimating

Scope Item For Each Feature

✔ Documentation

✔ Training

Security

High Availability

✔ Dynamic look and feel

✔ High Performance

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

2. Use the actual team to estimate

8  man  months  only  

40  man  months  at  least  !!  

Project Team Sales

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

3. Respect the estimate

IF you need to lower the bid to be competitive THEN • …maybe lower profit margins • …maybe take the project as loss-leader • …maybe offer in-kind exchange

DO  NOT  apply  pressure  and  overtime  to  recover  

profits  !!  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

4. Separate success from number of features

ID Feature 1 Login 2 Export to Excel 3 Forgot Password … ….

213 User Preferences 214 Facebook integration 215 Synchronize music

ý

Measurable  Success  Criteria  

-­‐  New  payroll  system  -­‐  Automates  90%  of  

submitted  workflows  -­‐  80%  of  users  satisfied  

with  interface  -­‐  Single  Sign  On  -­‐  No  increase  in  

operational  cost  

þ

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“Run a health check”

Proposal Execution

Contract

β

19

5. Diagnose The Problem

V=20/iteration  

20

5. Diagnose The Problem

V=20/iteration  

21

5. Diagnose The Problem

V=20/iteration  

V=15/iteration  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

POP QUIZ

Proposal

•  210 Ideal Days •  Two teams expected to

finish project in 6 monthly iterations

Re-Planning @ Kickoff

•  Team re-estimates 250 Ideal Days for the same backlog

•  Each team forecasts only 13 Ideal Days for the first iteration

1.  How  many  more  iterations  have  been  added  to  the  schedule?  2.  If  teams  stay  the  same  for  the  whole  project,  what  is  the  

%increase  in  labor  cost?  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

6. Use iterations to localize risk

Rqmts   Arch   Dev   Test  More risk

R  Less risk

A   T  D   R   A   T  D   R   A   T  D  

1   2   3  

RLeast risk

1   2   3  

ADT

RADT

RADT

RADT

RADT

RADT

RADT

RADT

RADT

Project  Schedule  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

Requirements Emergency !!

Proposal Execution

Contract

γ

25

Feature Est.

Login 5

Export to Excel 8

Forgot Password 3

Facebook Integration 20

User Preferences 13

7. Dynamic Scope Option

Feature Est.

Login 5

Export to Excel 8

Forgot Password 3

Facebook Integration 20

User Preferences 13

Original  

Operations Log 13

New Skin 13

New  

“You  may  replace  any  pending  feature  of  equal  

or  lesser  size”  

26

8. Explain it in Money

Cost  of  Estimation  

Units  

Fixed  Iteration  Cost  /  Average  Velocity  =  

27

8. Explain it in Money

Cost  of  Estimation  

Units  

Iteration  Burn-­‐rate/  Average  Velocity  

     $715  day  rate    x  7  people  x  10  day  iteration  /  25  story  points  

=  

28

8. Explain it in Money

Cost  of  Estimation  

Units  

Iteration  Burn-­‐rate/  Average  Velocity  

$50,050    /  25  story  points  

     $715  day  rate    x  7  people  x  10  day  iteration  /  25  story  points  

=  

29

8. Explain it in Money

Cost  of  Estimation  

Units  

Iteration  Burn-­‐rate/  Average  Velocity  

$50,050    /  25  story  points  

     $715  day  rate    x  7  people  x  10  day  iteration  /  25  story  points  

=  

$2,002  per    story  point  

30

Feature Est. $

Login 5 $10K

Export to Excel 8 $16K

Forgot Password 3 $6K

Facebook Integration 20 $40K

User Preferences 13 $26K

8. Dynamic Scope Option (in Dollars)

Feature Est. $

Login 5 $10K

Export to Excel 8 $16K

Forgot Password 3 $6K

Facebook Integration 20 $40K

User Preferences 13 $26K

Original  

Operations Log 13 $26K

New Skin 13 $26K

New  

“You  may  replace  any  pending  feature  of  equal  

or  lesser  size”  

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

9. Use the contract to combat scope creep

Project Scope in Contract: • Uploading of Rights Managed Images:

•  Require users to specify the licensed usage for an image by; Regions, Countries, Media Types

•  Require users to provide additional comments or instructions on appropriate usage at the time of upload.

•  Give users the ability to upload licensing documentation (in PDF or JPG format) at the time of the upload.

• Downloading of Rights Managed Images: •  Limit access to images based on the region of the user. •  Require users to acknowledge that the image

downloaded will be used in accordance with stated license rights.

•  Send an alert email to a user who previously downloaded an image when that image’s rights have expired.

•  Send an alert email to an identified corporate admin when a licensed image has been downloaded.

•  Record the time and date of the user download and provide this data through a reporting mechanism

Backlog Est.

User preferred defaults for upload fields

8

Scan uploaded image files to determine image format

20

Upload metadata with images 5

Region-specific access 13

Auto email user when rights have expired

8

Report results sortable by each column

5

Which  backlog  items  are  not  within  scope?  

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Technical Emergency !!

Proposal Execution

Contract

δ

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

10. Stop over-engineering Less work Vs. More work

Experiment Vs. Implement Manual Vs. Automated

Buy Vs. Build Single User Vs. Multi User Generic UI Vs. Custom UI

Static Vs. Dynamic Unreliable Vs. Reliable

Source: Bill Wake, “Twenty ways to split”

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

The Impossible Becomes The Pitch

“I am the only project manager in the world, who can guarantee 100% on-schedule, on-budget. No problem.

….I am also the only one who will give you Dynamic Scope Option. In exchange for this low-risk flexibility, our contracts require a collaborative partnership over project success.”

“PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2010Permission is granted to PMI for PMI® Marketplace use only

It’s your choice

Bad  Money  Good  Money  

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Questions

Jesse Fewell

Jesse.fewell@vcleader.pmi.org

@jessefewell

www.jessefewell.com

37

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Top 5 Requirements for Programs that Deliver

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