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Agile Contracts
Andris BarissVladimir Tarasow
customersupplier
negotiations
contract
risks
Risk is the potential that a chosen action or activity, including the choice of inaction, will lead to a loss.
Wikipedia
Risk is the effect of uncertainty on objectives.
ISO 31000 (2009) / ISO Guide 73:2002
Risks should be:● identified — severity and impact● classified — people, process or
technology● analyzed — prioritization● planned, tracked and etc.
risks are uncertain
When we estimate a project we base it on our idea of scope.
But actually,it's the customer
who is in control of scope.
requirementsare uncertain
agile contracts
Capped Time & Material
Traits:● Fixed time● Fixed budget● Scope can be altered● Requirements are stable
Capped Time & Material
Capped Time & Material
Pros:● Supplier gets full coverage of its
expenses.● Customer benefits from the limit to the
total exposure.● Both parties interested in delivering high
value functionality as early as possible.
Capped Time & Material
Cons:● Requirements should remain stable.● Both parties must work closely together
to identify needs, wishes and priorities from the very beginning.
Incremental Delivery
Traits:● Regular inspection points.● Can be stopped after some point.● Requirements can be changed wildly.● Good for building prototypes.
Incremental Delivery
Incremental Delivery
Pros:● Natural for the Agile Teams.● Supplier gets full coverage of its
expenses.● Customer can stop the project after the
inspection point to save the budget.
Incremental Delivery
Cons:● Customer should be familiar with
incremental development.● Requires a certain level of trust between
supplier and customer.● Uncertain future for the supplier.
Cost Targeted
Traits:● Fixed scope.● Better for long-term relationships.● Share risk fairly between Customer and
Supplier.● Align goals by giving both parties an
incentive to minimise scope.
Cost Targeted
More gain, more pain.
Cost Targeted
Pros:● Both sides benefit of savings.● Both sides share the penalties.● Gives certainty about the maximum
price.
Cost Targeted
Cons:● It's very hard to agree on a realistic final
price of the product.● Both organizations must truly understand
the model.
time to practice
Every FridayI like to enjoy
tasty cocktails.
Rules
● 5 mins to discuss what you will do● 10 mins to ask me questions● 10 mins to build a proposal
???
Vladimir Tarasow
About: http://about.me/netratE-mail: [email protected]
Andris Bariss
About: lv.linkedin.com/in/andrisbarissE-mail: [email protected]
Thank You!
Please, leave feedback!
http://spkr8.com/t/21031
Materials used in the presentation:● Wikipedia: www.wikipedia.org● Agile Contracts collection by Alistair Cockburn: alistair.cockburn.
us/Agile+contracts● 'Minimal Marketable Features - MMFs Explained' (www.netobjectives.com)● 'Target Cost Contracts' by John Rusk (www.agilekiwi.
com/estimationandpricing/target-cost-contracts)● Photo from Wikimedia by Properpilot● Photo from Wikimedia by Nik Frey● The reproduction 'Saint Wolfgang and the devil' by Michael Pacher via
GNU Free Documentation License● Illustrations by Arina Noviani (arinanoviani.deviantart.com)● Illustrations by Vladimir Tarasow
Credits
This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. To view a copy of this
license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/.