HOW MUCH WILL THIS COST?Evan Leybourn
Evan Leybournlean / agile business leader and authorSingapore@eleybournhttp://theagiledirector.com
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“There are so many men who can figure costs, and so few who can measure value.” - Anonymous
“how much is this going to cost?”
“how long is this going to take?”
“what am I going to get?”
predictabilitythe fundamental flaw in software contracts
customer collaborationover contract negotiationwhile there is value in the items on the right ...
understand your workflow
A
Z
option 1: increase capacity
option 3: drop requirement
option 3: increase duration
customer trust
partnership
identification
contract
reference
time and materialsmost “agile” contract model, but linear growth
outcome-based contracts“power by the hour”
scope
fixed costa fixed price quote prior to any work commencing
scope
an exampleprovide operational support and maintenance services
scopequotingidentify, and estimate, the approximate user stories in iteration 0
scopedeliveringreduce effort on technical debt and use short (1-2 week) iterations
scope
measuringvelocity and burn rate are your key indicators of cost
scope
fixed timedelivery is expected by a specific date
scope
an exampledesign and print new marketing material for a product launch
scope
estimatinguse historical velocity data to estimate the expected duration
scope
deliveringstrictly enforce timeboxes
scope
measuringtracking team and project velocity and/or cycle time
fixed scopefixed scope
a fixed set of requirements – sometimes know and heavy agile
fixed scopean example
deliver financial reports prior to the end of the financial year
fixed scopeplanning
focus on backlog definition and estimation during iteration 0
fixed scopedelivering
work in predefined, and agreed, backlog order
fixed scopemeasuring
acceptance of user stories
fixedscopefixed cost
& scopea fixed price quote for a pre-defined set of requirements
fixedscopean example
build and deliver a product to architectural specifications
fixedscopequoting &
planningduring planning, increase contingency (% or $) for the
unexpected
fixedscopedelivering
adjust delivery date in addition to fixed cost and fixed scope
fixedscopemeasuring
as per fixed cost and fixed scope
fixedscopefixed time
& scopea fixed set of requirements with final delivery due by an agreed date
fixedscopean example
recruitment of staff prior to a new project commencing
fixedscopeplanning &
estimatingpre-assign stories into iterations and allocate time to technical debt
fixedscopedelivering
if required, increase the team size prior to completion
fixedscopemeasuring
as per fixed time and fixed scope
scopefixed time & costa fixed price quote with an agreed delivery date – known as capped t&m
scope
an examplework on an agreed product until the end of the financial year
scopequoting &estimatingcalculate total cost as cost per cost per iteration
scopedeliveringupdate backlog as required in addition to fixed time and fixed cost
scope
measuringas per fixed time and fixed cost
fixedscopefixed time,
cost & scopeno flexibility in the project budget, schedule, or requirements
fixedscope
cancel the project
fixedscope
but...If you start with t&m...
release the lawyersmanaging exposure and risk
“What am I going to get?”
“Whatever you tell us you want.”
“How long is this going to take?”
“As long as is necessary.”
“How much is this going to cost?”
“As much as you’re willing to spend”
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To learn more, check out
Directing the Agile Organisationby Evan Leybourn
available at Amazon and all good book stores
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PS: #noprojectsconsistent and continuous, outcomes focused, change
customer trust
partnership
identification
contract
reference
Do Defer
Limit Avoid
Low Effort (5 minutes)High Effort (Ongoing)
Hig
h V
alu
eLow
Valu
eStatus Quo
To learn more, check out
Directing the Agile Organisationby Evan Leybourn
available at Amazon and all good book stores
CLICK TO DISCOVER MORE