Angela Druckman & Jimi Fosdick

Certified Scrum Trainers and Agile Process Mentors

adruckman@collab.net

Negotiating Agile Contracts

Creating Effective Agreements for Guiding Agile

Projects

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Overview

•Introductions

•The purpose of a contract

•The Agile Manifesto

•Characteristics of a good Agile contract

•Defining a project goal

•Describing roles and responsibilities

•Agile project artifacts

•Change management

•Writing the contract

•Final words of advice

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A Bit About Us

Angela Druckman, CST

Having served as a Product Owner, ScrumMaster and team member, Angela Druckman has

seen first-hand how Agile practices and Scrum in particular can lead organizations to project

success. As one of CollabNet’s Certified Scrum Trainers and a member of its Agile Thought

Leadership team, she helps organizations harness the benefits of Agile practices through

public and private courses, as well as onsite private Agile Transformation coaching.

Jimi Fosdick, PMP, CST

With more than 14 years of experience in product development, Jimi Fosdick has worked in

a wide range of industries, including publishing, software, advertising, and the public sector.

As one of CollabNet’s Certified Scrum Trainers, he conducts dozens of public courses

around the world each year, helping organizations to surface dysfunction and improve

processes through Scrum.

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What is the Purpose of a Contract?

Why do organizations create contracts with

outside entities like consultants, contractors

and partners? Is it to:

• Provide an exhaustive description of the work to

be done?

• Describe all deliverables and expectations in

detail?

• Make sure they have an advantage over the

other party?

When you set out to make any signed

document a weapon you limit its value!

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Consider the Agile Manifesto

This document, created by those many consider to be the

founders of the Agile movement, describes the follow Agile

values:

• Individuals and interactions over processes and tools

• Working software over comprehensive documentation

• Customer collaboration over contract negotiation

• Responding to change over following a plan

Every choice has a cost and being too fixed in a work

plan is no different!

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Characteristics of a Good Agile Contract

Creating an effective Agile contract is about both

understanding agreements and providing options.

A good Agile contract will have some or all

of these characteristics. It will:

•Describe the project goal

•Denote roles and responsibilities

•List key artifacts

•Explain the change management process

•Provide estimates

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What is a Project Goal?

A project goal is not the same as a list of requirements! It

describes the target at which you are aiming. Once you agree

on that target, the path there can vary.

• Hire caterers

• Clean house

• Order cake

• Book DJ

• Purchase decorations

• Choose photographer

vs. Plan a birthday party for 25

guests

A key benefit of Agile is that, once a project goal is

defined, the path to get there can flex.

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Describing Roles and Responsibilities

Agile methods like Scrum rely on clear paths

of responsibilities to be effective. Your Agile

contract should describe:

•Which party will fulfill the Product Owner

role and what that role entails

•Consultants - keep in mind a client Product

Owner is always more work for you

•Clients – fulfilling the Product Owner role is a

great way to control project costs

•The approval process for calling product

backlog items “done”

•Team member rights and responsibilities

•Which party will fulfill the ScrumMaster role

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Agile Project Artifacts

In the beginning, it can be simplest to continue to

use most or all of your standard project

documentation, with the following tweaks:

•Make BRDs, HLDs, DDDs, etc “living

documents” that are updated each sprint and

signed at the end of the project

•Clearly state that the team will be committing to

work from the Product Backlog exclusively

•Use references in user stories/ product backlog

items to refer back to larger documentation

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Change Management – No more CCRs!

• Clients will no longer be required to

create client change requests (CCRs) to

ask for requirement changes. They can

simply revise the product backlog

•Quite possibly the biggest selling point to clients

when offering an Agile approach to a project

•Emphasize clients can and should do this every

sprint

•Re-emphasize that whatever is at the top of the

product backlog is what the team is going to build

•“Money for nothing, change for free”

The change management section of your contract will likely

change dramatically!

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Providing Estimates

It is reasonable for a customer to want to know how much a body of

work is likely to cost. Agile contracts can provide estimates in:

•Releases

•Example: “Based on known requirements we think this work will require a team

of 5 staff 4 releases to complete, with a release occurring on the 10th day of

every other month.”

•Sprints

• Example: “Based on known requirements we think this work will require a team

of 5 staff 8 sprints to complete, plus or minus one sprint.”

•Hours

•Example: “Based on known requirements we think this work will require a team

of 5 staff a total of 675 hours to complete +/- 15%.”

Where do these estimates come from? They come from…

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The Statement of Work Sprint

•Define the project goal

•Build the beginnings of the product backlog

•Assemble the team

•Determine roles and responsibilities

•Create estimates

The deliverable, or sprint goal, of an SOW sprint is the contract itself.

It can be reviewed and signed at the Sprint Review meeting and the

team can begin creating software the next day.

SOW sprints can provide clients huge cost savings

over traditional requirements gathering phases!

An SOW sprint is not the same thing as a requirements sprint – it is

much more valuable! In it you can:

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Some final words of advice…

•Value the ability to define and the ability to

flex

•Try to maximize both to your advantage

•Involve your audit group early in the process

•Let the right path emerge

•Make use of your organization’s “Exception Form”

or similar document in the beginning

•Realize and believe that contracts can be

mutually beneficial

•Get help from a coach that has experience

writing Agile contracts

Questions?