Agile vs waterfall contracts how to achieve best of both worlds

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Information about Agile vs waterfall contracts how to achieve best of both worlds

Published on September 14, 2015

Author: PeterRosenberg2


1. Agile vs Waterfall Contracts Upsides/Downsides with respect to contract scopes and types Author: Peter Rosenberg © 2015 Rosenberg-IT

2. A few simplifications to help • A contract is considered to be Agile if a proven Agile method is the contracted process securing the outcomes. • A contract is considered to (in contrast to Agile contract), be Waterfall, if contract is not covering the Process in how to achieve the contracted outcome. • In practice, the latter is a strong assumption, since we see – especially for Ops Contracts – increasing process controlled mechanisms trying to be embedded in contracts (CMMI, ITIL, CoBit, ISO,..) • A contract is considered a DEV contract, if its limited to delivery of an Appl./Service and agreed by the client. • A contract is considered a OPS contract, if its limited to continuous support and maintenance of an Appl./Service.

3. Characteristics of Agile DEV contracts Quicker results (deliverables) by Increments Closer working relationships with Product Owner and stakeholders. No incentives for Ops Improvements. No guarantees for Ops Quality No guarantee for Ops Scaleability Small, usually 1-50 individuals Contract payments as Increments are accepted

4. Characteristics of Waterfall DEV contracts Contract and Exhibits tries - in good faith - to cover all aspects of Life Cycle events, until all deliverables has passed contracted quality controls. Longer time to show results, apart from those deliverables coming out of Milestones. No incentives for Ops Improvements. No guarantees for Ops Quality No guarantee for Ops Scalability Large, usually 25+ individuals Contract payments by pre-determined milestones and deliverables

5. Characteristics of Agile OPS contracts A reasonable well proven process for continuous improvement. No insight to deliverables (from DEV), requires a long analysis phase prior to agile delivery. Decisions by the former Appl. designs may exclude certain wishful scenarios such as Continous Integration. Management Incentive to shorten Release Intervals Contract payments as Releases/Year goes up, and Number of Tickets/Release goes down

6. Characteristics of Waterfall OPS contracts Longer Contract durations and possible later re-wins, can deliver ROI and profit over time. Insight from initial contract establishment, can give the organization knowledge to benefit from. Very labor intensive legal and quality assurance of all contracted items of support (aka Deliverables). Chasing misbehaves by client becomes a way of generating more contract value. Hiding own misbehaves becomes a way of protecting contract value. Shorter contract durations, causes ROI to be very risky. Large scale volumes, usually covering several years Contract payments usually paid by Fixed Price, adjusted by SLA KPI compliance and SLA breakages (penalties)

7. What could be the middle road ? • Assuming current contracts out there, that are split in entirely separated Dev and Ops contracts, could be transformed into this below suggested type (not easy, Legal and Payment wise). • OR starting on a blank sheet, before the invention of the appl./service is becoming institutionalized by legacy traditions. The basic idea here, is to come up with a contract that is a Life Cycle contract that lives as long as the portfolio subject to the Appl./Service in question.The contract is formed within the client organization and is signed in to, by the various DevOps organizations that will service the client on the terms given. Equally important, this is also my proposition: Treating the DevOps Contract itself, as a Product with a BackLog subject to improvements, calls for agile (even legal, perhaps) contract management.

8. DevOps Life Cycle Contracts DevOps, based on continuous integration, gives the proper incentives for doing things right, because the opposite will cause rising deployment costs. Design from start, the appl./services with DevOps in mind, will becomes ideal baseline. Opening up for Agile contract management, yet to be attempted. Has to be bootstrapped from early Appl./Service solutioning OR (somehow) Transformed from separate legacy Dev+Ops contracts to one DevOps contract. Learning by LEAN must allow mistakes to happen, but risks and consequences limited to selected few Customers/EndUsers. Payment would be determined by a combination of Fixed Price elements (to cover initial startup costs) AND Achievements (performance) based on SLA KPIs such as Tickets/Release, Releases/Years etc.

9. Thanks for taking your time ! Ideas & Invention of: Peter Rosenberg, independent advisor © 2015 Rosenberg-IT LinkedIn Profile: Blog: Contact:

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