Sebastian Botis

21 September 2012

AROBS

Agenda:

Traditional Contracts Change Orders

Timing

Ranges and Changes Model ―First Eye-Contact‖ Contract or Discovery

Contract

―Goodies contract‖ or Delivery Contract

Keys to success Customer availability

Duration for acceptance

Prioritization commitment

Termination clauses

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Traditional Contracts – General Workflow

Companies / customers publish or send a request for a

proposal. In most cases, the requests will not be in a

prioritized order — it all needs to be done

There is a short question and answer period where you,

the contractor, can ask detailed questions, flush out

assumptions, and attempt to discover the budget

Your final proposal will come in, as close as possible, to

the lower end of the budget, or if you don’t know the

budget, lower than what you think your competitors would

submit, and you put in everything the customers think

they want

Your proposal might include your change order process

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Traditional Contracts – Change Orders

They are absolutely necessary in the traditional contracts Without them, most company will go out of business

good change order

Small changes can become a staggering cost for the vendor good change order

Detailed change orders are required because: They insure some sort of accuracy

Even if they degrade trust in vendor, customers will change their mind very often

The vendors are taking all the risks

This is not the only reason for struggling with the customers We are also handicapped by time!

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Traditional Contracts - Timing

Vendors ask customers

for exactly what they

want

Customers ask for a

guaranteed set of

functionalities, a certain

cost and by a certain

time-line

Customers ask for dates, costs, and

commitments right from the start

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Range and Changes Model - Overview

Share certain features with ―Money for

Nothing‖ and ―Change for free‖

Traditional software project contracts are

made up of things like milestones, the

description of work, project goals and

objectives, deployment schedules, and

warranties These items may live in

Range and Changes Contract Model

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Range and Changes Model - Content

Covered by two different types of

contracts

―First eye-contact‖ contract or Discovery

Contract

○ Ascertain the ranges

○ Determine cost and timeline

―Goodies contract‖ or Delivery / Project

contract

○ Change clauses

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“First eye-contact”– Ascertain the ranges

Characteristics

Covered by a fixed fee

Fixed length

Only one goal – building the product backlog

Steps to build the PB

Identify user types or subjects of the system

Write user stories

Estimate the stories

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“First eye contact” – Determine Cost & Timeline

Steps to be performed Determine Team Velocity

○ See story points or ideal days

Calculate Cost per Sprint

○ See the cost per story point or time & material

Build a Release Plan

○ See velocity, budget and PB functionalities

Established Payment Options

○ Pay by sprint, story point, group of sprints or even time & material

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“Goodies contract” or Delivery/Project contract

Inputs: Set of user personas;

Estimated Product backlog

Release Plan

Project Contract

○ References the estimated PB;

○ References the preliminary Release Plan

○ Guarantees a range of points each sprint for a certain cost

○ Includes Definition of Done

○ Includes Change Clauses

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“Goodies contract” – Change Clauses

Characteristics Allow reshuffle of the work in

Product Backlog

Add new stories – but maintain

the same amount of work (same

total SP’s)

Termination clause

○ Money for Nothing, Change for

Free

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Keys to success

Customer availability Commitment for being available certain hours

Duration for acceptance The amount of time the customer has to accept the

functionality delivered in sprint

Prioritization Unlike a traditional RFP, a product backlog must be

groomed regularly prioritized and estimated

Contract includes the time needed for estimating new stories, breaking down large stories, helping the customers determine any shifts in priorities

Termination clause Money for Nothing

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Thank you!

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References:

Cohn, Mike. 2004 – "User Stories Applied”

Lacey, Mitch 2012 - ―The Scrum Field Guide”

Sutherland, Jeff - “Agile 2008: Money for Nothing”