Agile Wake Up #3 : la contractualisation Agile

Ambition 2015 - 2017
Return of Experience
How to contract Agile
development ?
(French ROX)
laurent.delvaux@zenika.com @ldelvaux

Laurent DELVAUX
Living in Paris
2 children + a wife
37 years old
Co-founder of Zenika (10yo-200p)
Still love Coding and Agile too
Try to spread Agile Contracts in France
for 5 years
And those days, working in Innovation

1- State of the art of contracts and Agile
compatibility (10 minutes)
2- What are the basic terms for a good
Agile contract ? (30 minutes)
3- Q&A (10 minutes)

Quick Recap
What is Agile
development ?

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Sprint
2-4 weeks
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Sprint goal
Sprint
backlog
Potentially shippable
product increment
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backlog
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24 hours

State of the Art
Types of contracts

« Standard phrase in a contract for (…) product
development in which the employer agrees to pay
the contractor based on the time spent by the
contractor's employees to do the work.
Generally used in projects in which it is not
possible to accurately estimate the size of the
project, or when it is expected that the project
requirements would most likely change.
Generally with a maximum amount fixed. »
https://en.wikipedia.org/wiki/Time_and_materials

Scope
TimeCost

“Contracts where the payment amount does not
depend on resources used or time expended.
Used by military/government contractors to put the
risk on the side of the vendor, and control costs.
However, historically when used for innovative
projects, it often fails.
Continue to be popular despite a history of failed
projects. Some laws prefer fixed-price contracts,
but, many maintain that such contracts are actually
the most expensive, especially when the risks or
costs are unknown.”
https://en.wikipedia.org/wiki/Fixed-price_contract

T&M
Contracts
Fixed-Price
Contacts
Agile
Contracts
Able to stop and
save money
YES, perhaps NO YES
Able to change
the scope/priority
YES, perhaps NO YES
Penalty for … Client Provider Client & Provider
Able to have an
intermediate
working product
YES, perhaps NO YES
Select Provider
best Resources
YES NO YES
Guaranty a way of
working together
NO YES YES
Risks are on … Client Provider Client & Provider

How to create a such
Agile Contract ?
« Si vis pacem, para bellum »
(If you want peace, prepare for war)

- Idea : Fair contract => risks sharing
- Approach
- Strong commitment on each iteration. Well
balanced penalty model
- Mirror clauses to split risks
- Impossible to describe everything
- but compulsory to be much more detailed on
process than a T&M or Fixed Price contracts
- Classic issues consequences know by all. Ex :
US not delivered, PO not enough available,
project termination, …
In collaboration with

Scope
TimeCost
Clause 1
In the contract : Customer
described the global
vision/scope. Provider estimate
Cost/Time based on today
know Scope, that is certainly
wrong/incomplete. We
estimate it will take 10
iterations. And both sides
already know that Scope will
change.
Declaration of Intent

Scope
TimeCost
Provider
Provision a Strike
Force with a
guaranteed way
of proceed
Customer
Provision a PO
who know Agile
and respect
practises
Clause 2
In the contract : we will co-create your product together step by
step, by Iterations with quick feedback cycle.

Scope
TimeCosts
Clause 3
In the contract : for each
Iteration, the client will do his
best to provide INVEST US.
Provider commit to a
Scope/Cost and Time.
Change
Cost for a 3 weeks Iteration with 5 dev team = 45k€

0 €
1 000 €
2 000 €
3 000 €
4 000 €
5 000 €
6 000 €
1 2 3 4 5 6 7 8
Cost variation
Régie
Forfait
zFactory
Daily Cost 600 €
Gradient / Slope
(by contract) 0,6
Fixed cost 360 €
Variable cost 240 €
Initial estimation 4 days
Real time spent T&M Fixed Bob Martin
1 day 600 € 2 400 € 1 320 €
2 days 1 200 € 2 400 € 1 680 €
3 days 1 800 € 2 400 € 2 040 €
4 days 2 400 € 2 400 € 2 400 €
5 days 3 000 € 2 400 € 2 760 €
6 days 3 600 € 2 400 € 3 120 €
7 days 4 200 € 2 400 € 3 480 €
8 days 4 800 € 2 400 € 3 840 €
Clause 3
Rule applied US by US

- Usual clause in Client Contracts
- “At any time, the Client can immediately
terminate the contract without any
compensation for the Provider”
- Reciprocal attention version ? Unbelievable !
- Simple and effective to find a better balanced
clause. Try to find the solution ?
 Also called “mirror clauses”, this type of
clauses help to align Client and Provider
common vision and mutual interest

•Product owner
•ScrumMaster
•Team
Roles
•Sprint planning
•Sprint review
•Sprint retrospective
•Daily scrum meeting
Ceremonies
•Product backlog
•Sprint backlog
•Burndown charts
Artifacts
Clauses

 Teams are located in a unique place
 Ceremonies were held, decisions are
made and communicated
 PO not present during Sprint Planning, no
prioritization, no iterative acceptance tests
 Common issue : Retrospective removal to
« save time »
 No action plan or following of Retrospective
 No respect of the Sprint timebox to deliver
more US
 …
Clauses

 Roles and responsibilities are known and
respected
 Sprint Backlog modification during the Sprint
 Sprint Backlog fixed without dev team
commitment (ex : by planning poker)
 No anticipation no prioritization of next Sprints
 No management by the PO of the global cost and
scope (ex : no MVP)
 TIPS : if the PO brakes a rule, dev team switch to
T&M until the next Sprint Planning ceremony
Clauses

For each principle :
+1 pts : if the contract helps to respect it
0 pts : if it doesn’t help but doesn’t break it
-20 pts : if it breaks/prevent the principle
http://www.agilemanifesto.org/iso/he/principles.html
Hope you will get 12 pts 

 The only acceptable dissatisfaction from
the Client should be « the product is not
moving fast enough »
 No surprise about Developed Feature
 No surprise about Remaining Time
 No surprise about Money spent
 No surprise about Quality provided

Conclusion

• Not yet very frequent but trendy
• Highly promoted by steering committees,
business and IT teams (>>> Innovation)
• Slow down by buyers and jurists
• Change mind-set from « what i’m buying ? to
reduce the cost »  « why i’m buying ? to
maximize the ROI of spent money »
• Difficult to make Buyers, Lawyers, Jurist,
Business and Dev teams work together
on building a contract that promote ROI
• It can take 6 months to 1 year… or fail

• Each Agile Contract is Unique (per client)
• Can’t be a simple copy/paste
• An asset for Customer, enabling innovation
• It must be a co-creation
• Today, we even provide this co-creation as a
set of Services (trainings + consulting + lawyers),
for Clients and even Providers (potentially our
competitors)

Agile Wake Up #3 : la contractualisation Agile

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