Presentation about different approaches both common — Capped T & M or Incremental Delivery — and rare, e.g. Cost Targeted, and share our experience about what's is going on in real life.

1. Agile Contracts
Andris Bariss
Vladimir Tarasow

2. supplier customer

3. negotiations

4. contract

5. risks

6. 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

7. Risks should be:
● identified — severity and impact
● classified — people, process or
technology
● analyzed — prioritization
● planned, tracked and etc.

8. risks are uncertain

9. 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.

10. requirements
are uncertain

11. agile contracts

12. Capped Time & Material
Traits:
● Fixed time
● Fixed budget
● Scope can be altered
● Requirements are stable

13. Capped Time & Material

14. 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.

15. Capped Time & Material
Cons:
● Requirements should remain stable.
● Both parties must work closely together
to identify needs, wishes and priorities
from the very beginning.

16. Incremental Delivery
Traits:
● Regular inspection points.
● Can be stopped after some point.
● Requirements can be changed wildly.
● Good for building prototypes.

17. Incremental Delivery

18. 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.

19. 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.

20. 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.

21. Cost Targeted
More gain,
more pain.

22. Cost Targeted
Pros:
● Both sides benefit of savings.
● Both sides share the penalties.
● Gives certainty about the maximum
price.

23. Cost Targeted
Cons:
● It's very hard to agree on a realistic final
price of the product.
● Both organizations must truly understand
the model.

24. time to practice

25. Every Friday
I like to enjoy
tasty cocktails.

26. Rules
● 5 mins to discuss what you will do
● 10 mins to ask me questions
● 10 mins to build a proposal

27. ???

28. Vladimir Tarasow
About: http://about.me/netrat
E-mail: netrat@netrat.eu
Andris Bariss
About: lv.linkedin.com/in/andrisbariss
E-mail: andris.bariss@gmail.com

29. Thank You!
Please, leave feedback!
http://spkr8.com/t/21031

30. Credits
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

31. 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/.